Auditor Report of KND Engineering Technologies Ltd.

Mar 31, 2014

1. We have audited the accompanying financial statements of KND Engineering Technologies Limited, ("the Company"), which comprise the Balance Sheet as at March 31st 2014, the Statement of Profit and Loss and Cash Flow Statement for the year ended 31st March, 2014 and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

4. An audit involves performing procedures to obtain audit evidence about the amounts and 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for purpose of expressing an opinion on the effectiveness of the Company''s internal control. 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.

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

Opinion

6. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014;

ii) In the case of Statement of Profit and Loss, of the profit for the year ended on that date; and

iii) In the case of the Cash Flow Statement, of the cash flows of the company for the year ended on that date.

Emphasis of Matter

Attention is invited to point no 5 in note 2 on financial statement.

Property at 30 Shakespeare Sarani, Kolkata has been sold in 2009. The same property was released as per Hon''ble Calcutta High Court & Bombay High Court orders dated 16/03/2009 & dated 7/05/2009 respectively. However M/S Fab Leathers Ltd. has gone to Supreme Court claiming transfer of ownership of the said property & case is pending in Supreme Court. Our opinion is not qualified in respect of this matter

7. Report on Other Legal and Regulatory Requirement

1. 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 227 of the Act, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

8. 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 those books.

c. The Balance Sheet, the Statement of Profit & Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit & Loss and the Cash Flow Statement comply with Accounting Standards notified under the Act (which continues to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

e. On the basis of written representations received from the Directors, as on 31st March, 2014 and taken on record by the Board of Directors, none of the Directors are 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 Act.

ANNEXURE TO AUDITORS'' REPORT

(Referred to in Paragraph 5 of our report of even date)

(i) In respect of its Fixed Assets.

a. As informed, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

b. During the year, Fixed Asset has been physically verified by the management.

c. During the year, the Company has not disposed off any substantial part of the assets.

(ii) In respect of its Inventories :

a) During the year, inventory has been physi- cally verified at reasonable intervals by the management.

b) Inventory has been physically verified at reasonable intervals by the Management but we are unable to make our comment on procedures of physical verification.

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of inventory & no material discrepancies were noticed on physical verifications.

(iii) In respect of loans, secured or unsecured, granted or taken by the Company to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956.

a. The Company has not granted any Loans secured or unsecured to Companies, firms or other parties covered in the register main- tained under section 301of the Act. There- fore, clause 3(b) to 3(d) of the Companies (Auditors'' Report) Order 2003 are not appli- cable to the Company.

b. The Company has not taken any loans se- cured or unsecured from Companies, firms or other parties covered in the register main- tained under section 301 of the Act. There- fore, clause 3(e) to 3(g) of the Companies (Auditors'' Report) Order 2003 is not appli- cable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there seems to be an internal control system for the purchase of inven- tory, fixed assets and for the sale of goods and services but the same needs to be further strengthened.

(v) In respect on transactions covered under Section 301 of the Companies Act 1956:

In our opinion and according to the information and explanations given to us, there are no particu- lars of contracts or agreements that need to be entered into in the register in pursuance of Sec- tion 301 of the Companies Act, 1956. Therefore, clause 5(b) of the Companies (Auditors'' Report) Order 2003 is not applicable to the Company.

(vi) The Company has not accepted deposits from the public.

(vii) During the year internal audit has been conducted internally but the internal audit system needs to be strengthened.

(viii) In our opinion the company is not a manufacturing Company. There fore clause 4 (viii) of the compa- nies (Auditors'' Report) Order 2003 is not appli- cable to the Company.

(ix) In respect of statutory dues:

a. According to the records of the Company and information and explanations given to us, in our opinion the Company has gener- ally been regular in depositing undisputed statutory dues including Employees State In- surance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, and any material statutory dues except some ESI & Service Tax applicable to it with appropri- ate authorities.

b. According to the information and explana- tions given to us and the records of the com- pany examined by us, there are disputed dues with respect to sales tax/Vat and ser- vice tax are as follows : Name of the Nature of Amount Period to Forum statute dispute (Rs.) which the where relates the dispute is pending

Assam General Asseement 63816 AY 1999-00 Commissioner Sales Tax Act 93 dues of Taxes

Commissioner of Service Tax 12371352 1.10.04 to CESTAT 8 Service Tax 31.03.07 Calcutta High Cout

Commissioner of Service Tax 24352206 23.08.2007 to CESTAT of Service Tax 31.03.2010

The Income Tax 3552860 AY 2010 Commissioner -2011 Appeal of Income Tax

(x) The Company has no accumulated losses at the end of the financial year and has not incurred cash losses during the financial year as well as in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the Company has delayed in repayment of some dues to finan- cial institutions, banks at the end of the year.(Please refer to note 2.3.a.1 of Financial Statements)

(xii) In our opinion and according to the information and explanation given to us, the Company has not granted any loans against Co''s Fixed De- posits.

(xiii) In our opinion, the Company is not chit fund or a Nidhi /Mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Compa- nies (Auditors'' Report) Order 2003 are not ap- plicable to the Company.

(xiv) The Company has not dealt in the securities, debentures and other investment. Accordingly the provisions of clause 4(xiv) of the Compa- nies (Auditors'' Report) Order 2003 are not ap- plicable to the Company.

(xv) The Company has not given any guarantees for loans taken by others from banks or finan- cial institutions.

(xvi) During the year, the company has raised term loans. It has been applied for the purpose for which loans have been obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company we are of the opinion that no funds raised on short-term basis have been used for long-term invest- ments.

(xviii) During the year the Company has not made any preferential allotment of shares to parties and companies covered in the Register main- tained under Section 301 of the Companies Act 1956.

(xix) The Company has not raised any money by way of debentures issued during the year.

(xx) The company has not raised any money by way of public issue during the year.

(xxi) 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 has been noticed or reported during the year.

For L N Todi & Co. Chartered Accountants Registration No. 304022E Lalit Todi PLACE: Kolkata Partner Dated : May 28th, 2014 Membership No. 054847

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Mar 31, 2011

1. We have audited the attached Balance Sheet of M/S KND ENGINEERING TECHNOLOGIES LIMITED as at 31st March, 2011, the Profit and Loss Account and also cash flow statement for the year ended on that date annexed thereto.

These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to above, we report that:

(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 accounts, as required by law, have been kept by the Company so far as appears from our examination of those books; (iii) The Balance sheet, Profit and Loss account and Cash Flow Statement dealt with by this report are in agreement with the books of account of the Company;

(iv) In our opinion the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the mandatory accounting standards referred to in Section 211(3C) of the Companies Act 1956; (v) In our opinion and based on information and explanation given to us, none of the directors are disqualified as on 31st March 2011 from being appointed as directors in terms of clause (g) of sub-section (1) of section 274 of the Companies Act 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us , the financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In so for as it relates to Balance Sheet, of the state of affair of the Company as at 31st March 2011.

(b) In so for as it relates to the Profit and loss Account, of the loss of the company for the year ended on that date. And

(c) In so far as it relates to Cash Flow Statement, of the cash flows for the year ended on that date.

(i) In respect of its fixed assets.

a. As informed, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The updating of fixed assets register is under process.

b. As explained to us, the management during the year has physically verified the fixed assets in a phased manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. Pursuant to the programme, fixed assets at certain locations were physically verified by the management during the period and no material discrepancies between the book records and physical inventories have been noticed.

c. During the year the Company has not disposed of any substantial part of the assets.

(ii) In respect of its inventories:

a) As explained to us, the management has conducted physical verification of stocks at reasonable intervals.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stock followed by the management are reasonable and adequate in relation of 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, the Company has maintained proper records of stock and as reported and explained to us by the management, no material discrepancies were noticed on physical verification of stocks.

(iii) In respect of loans, Secured or unsecured, granted or taken by the Company to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956.

(a) The Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301of the Act. Therefore, clause 3(b) to 3(d) of the Companies (Auditors' Report) Order 2003 is not applicable to the Company.

(b) The Company has not taken any loans secured or unsecured from companies, firms or other parties covered in the register maintained under section 301of the Act. Therefore, clause 3(b) to 3(d) of the Companies (Auditors' Report) Order 2003 are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there seems to be an internal control system for the purchase of inventory, fixed assets and for the sale of goods and services.

(v) In respect on transactions covered under Section 301of the Companies Act 1956: In our opinion and according to the information and explanations given to us, there are no particulars of contracts or agreements that need to be entered into in the register in pursuance of Section 301 of the Companies Act, 1956. Therefore, clause 5(b) of the Companies (Auditors' Report) Order 2003 is not applicable to the Company.

(vi) The Company has not accepted deposits from the public.

(vii) In our opinion, the internal audit system of the Company needs to be expanded.

(viii) In our opinion the company is not a manufacturing Company. There fore clause 4 (viii) of the companies (Auditors' Report) Order 2003 is not applicable to the Company.

(ix) In respect of statutory dues:

(a) According to the records of the Company, undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-Tax, Wealth Tax, Customs Duty, Excise Duty,Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. With respect to service tax the exact position is not ascertainable.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of custom duty, wealth tax, excise duty and cess which have not been deposited

(x) The Company has accumulated losses at the end of the financial year which is less than fifty per cent of its net worth and has incurred cash losses during the financial year covered by our audit.

(xi) In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of dues to financial institutions, banks at the end of the year..

(xii) In our opinion and according to the information and explanation given to us, the Company has not granted any loans against Co's Fixed Deposits.

(xiii) In our opinion, the Company is not chit fund or a nidhi /mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors' Report) Order 2003 are not applicable to the

Company.

(xiv) The Company has not dealt in the securities, debentures and other investment. Accordingly the provisions of clause 4(xiv) of the Companies (Auditors' Report) Order 2003 are not applicable to the Company.

(xv) The Company has not given any guarantees for loans taken by others from banks or financial institutions.

(xvi) The Company has not raised any terms loans during the year except car and equipment loans from banks/ companies.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company we are of the opinion that no funds raised on short-term basis have been used for long-term investments.

(xviii) During the year the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301of the Companies Act 1956.

(xix) The Company has not raised any money by way of debentures issued during the year.

(xx) The company has not raised any money by way of public issue during the year.

(xxi) 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 has been noticed or reported during the year.

For L N Todi & Co. Chartered Accountants Registration No.304022E

Pankaj Kakarania Partner

Membership No. 053304 PLACE: KOLKATA

DATED THE 16th DAY OF August , 2011.

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Mar 31, 2010

1. We have audited the attached Balance Sheet of M/S KND ENGINEERING TECHNOLOGIES LIMITED as at 31 st March, 2010, the Profit and Loss Account and also Cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred

to above, we report that:

(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 accounts, as required by law, have been kept by the Company so far as appears from our examination of those books;

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

(iv) In our opinion the Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report comply with the mandatory accounting standards referred to in Section 211(3C) of the Companies Act 1956;

(v) In ouropinion and based on information and" explanation given to us, none of the directors are disqualified as on 31" March 2010 from being appointed as directors in terms of clause (g) of sub-section (1) of section 274 of the Companies Act 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in so for as it relates to Balance Sheet, of the state of affair of the Company as at 31" March 2010.

(b) In so for as it relates to the Profit and loss Account, of the profit of the company for the year ended on that date. And

(c) In so far as it relates to Cash Flow Statement, of the cash flows for the year ended on that date.



ANNEXURE TO AUDITORSREPORT

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

(i) In respect of its fixed assets.

a) As informed, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The updating of fixed assets register is under process

b) As explained to us and as certified, the management during the year has physically verified the fixed assets in a phased manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets Pursuant to the programme, fixed assets at certain locations were physically verified by the management during the period and no material discrepancies between the book records and physical assets have been noticed

c) During the year the Company has not disposed of any substantial part of the assets.

(ii) In respect of its inventories:

a) As explained to us and as certified, the management has conducted physical verification of stocks at reasonable intervals.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of stock followed by the management are reasonable and adequate in relation of 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, the Company has maintained records of stock and as reported and explained to us and as certified by the management, no material discrepancies were noticed on physical verification of stocks.

(iii) In respect of loans, Secured or unsecured, granted or taken by the Company to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956.

a) The Company has not granted any loans secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, clause 3(b) to 3(d) of the Companies (Auditors Report) Order 2003 is not applicable to the Company.

b) The Company has not taken any loans secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore, clause 3(f) & 3(g) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there seems to be an internal control system for the purchase of inventory, fixed assets and for the sale of goods and services needs to be strengthened.

(v) In respect on transactions covered under Section 301 of the Companies Act 1956:

In our opinion and according to the information and explanations given to us, there are no particulars of contracts or agreements that need to be entered into in the register in pursuance of Section 301 of the Companies Act, 1956. Therefore, clause 5(b) of the Companies (Auditors Report) Order 2003 is not applicable to the Company.

(vi) The Company has not accepted deposits from the public.

(vij) In our opinion, the internal audit system of the Company needs to be strengthened.

(viii) In our opinion the company is not a manufacturing Company. There fore clause 4 (viii) of the companies (Auditors Report) Order 2003 is not applicable to the Company.

(ix) In respect of statutory dues :

(a) According to the records of the Company, undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31" March, 2010 for a period of more than six months from the date of becoming payable.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no

dues of custom duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute. The particulars of disputed income- tax, sales tax are as follows:



Name of the Nature of Amount Period to Forum where statute dispute which the the dispute relates is pending

Assam General Asseement 63816 A 1999-00 Commissioner Sales Tax Act93 dues of Taxes



(ii) The Company has accumulated losses at the

end of the financial year which is less than fifty per cent of its net worth but it has not incurred cash losses during the financial year covered by our audit.

(iii) In our opinion and according to the information

and explanation given to us at the end of the year ,the Company has not defaulted in repeyment of dues to financial institutions, banks.

(iv) In our opinion and according to the information and explanation given to us, the Company has not granted any loans against Cos Fixed Deposits.

(v) In our opinion, the Company is not chit fund or a nidhi /mutual benefit fund/ society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(vi) The Company has not dealt in the securities, debentures and other investment. Accordingly the provisions of clause 4(xiv) of the Companies (Auditors Report) Order 2003 are not applicable to the Company.

(vii) The Company has not given any guarantees for loans taken by others from banks or financial institutions.

(viii) The Company has raised terms loans during the year from banks/ companies and were applied for the purpose for which the loans were obtained.

(ix) According to the information and explanations

given to us and on an overall examination of the Balance Sheet of the Company we are of the opinion that no funds raised on short-term basis have been used for long-term investments and vice versa.

(x) During the year the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act 1956.

(xi) The Company has not raised any money by way of debentures issued during the year.

(xii) The company has not raised any money by way of public issue during the year.

(xiii) 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 has been noticed or reported during the year.

For L N Todi & Co.

Chartered Accountants

Registration No. 304022E

Pankaj Kakarania

Place : Kolkata Partner

Dated : 25th August, 2010 Membership No. 053304