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 Company's Act, 2013 ( "the Act") 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 Companies ( Accounts ) Rules, 2014. 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 the fraud 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and the 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 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 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and other operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of 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 standalone 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 31st March, 2015 and it's loss and it's cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to

a) Note 26 to the Financial Statements regarding suspension of manufacturing operations of the Company and preparation and presentation of financial statements on a going concern basis for the reasons stated in ;

b) Note 28 to the Financial Statements regarding impairment of assets for the reasons stated there in ;

c) Note 29 regarding to the Financial Statements accounting for stock loss and

d) Note 30 regarding not obtaining confirmation of balances from company's vendors and customers. Our opinion is not modified in this regard

Report on Other Legal and Regulatory Requirements

1 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account

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) The matter described under the Emphasis of Matter Paragraph above regarding the suspension of manufacturing operations of the Company and not obtaining confirmation of balances from the company's vendors and customers, in our opinion, may have an adverse effect on the functioning of the Company.

f) On the basis of written representations received from the directors as on 31st March, 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 sub-section (2) of Section 164 of the Act.

g) 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, to the best of our information and according to the explanations given to us and in our opinion;

i) the company has disclosed the impact of pending litigations on its financial position in its financial statements - Note 25 to the financial statements.

ii) the company does not have any long-term contracts including derivative contracts for which there are any material foreseeable losses.

iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company

I (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) These fixed assets were physically verified by the management during the year. We have been informed that no material discrepancies were noticed on such physical verification.

II (a) The inventories have been physically verified during the year by the management at reasonable intervals. 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 nature of its business.

(c) In our opinion and according to the information and explanations given to us and on the basis of our examination of the inventory records, the company is maintaining proper records. The discrepancies noticed on physical verification of inventory as compared to book records were not material in relation to the operations of the company and the same have been properly dealt within the books of account.

iii) According to the information and explanations given to us, the Company has not granted any loans secured or unsecured to Companies , firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Therefore clause 3 (iii) of the Order is not applicable.

(iv) in our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business , with regard to the purchase of inventory and fixed assets and for the sale of goods and services. In our opinion according to the information and explanation given to us, there has been no continuing failure to correct major weaknesses in internal control system during the year.

v) According to the information and explanations given to us, the Company has not accepted deposits from the Public under the provisions of Section 73 and Section 74 of the Act and the rules framed there under. Therefore, the provisions of clause 3(v) of the Order are not applicable.

vi) On the basis of records produced to us, we are of the opinion that prima facie the cost records and accounts prescribed by the Central Government under Section 148 (1) of the Companies Act, 2013 have been maintained . However, we are not required to and have not carried out any detailed examination of such accounts and records.

vii) (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, in our opinion, undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales-Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess, Investor Education and Protection Fund and any other statutory dues as applicable, have been regularly deposited during the year with the appropriate authorities in India. There are no arrears of Statutory dues as at 31st March 2015 which are outstanding for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues on account of Providnet Fund, Employees' State Insurance , Income Tax , Sales Tax. Wealth Tax , Serivce Tax, Customs Duty, Excise Duty, Value Added Tax, Cess, Investor Education and Protection Fund as at 31st March, 2015 which have not been deposited on account of any dispute except stated below

Name of         Nature of Dues       Amount         Forum Where dispute
the statute                       (Rs. In Lakhs)    is pending

Sales           Restriction of 
                set off tax on         3.60         Appellate Tribunal,

Tax             prorate basis                       Andhra Pradesh

(viii) The Company has no accumulated losses as at the end of the financial year. The Company has incurred cash losses during the period coverd by the report and immediately preceding the period covered by the report

(ix) According to the information and explanations given to us and in our opinion, as at March 31, 2015, there were no default in repayment of dues to banks. The Company has not issued any debentures.

(x) In our opinion and according to the information and explanation given to us, the company has not given any guarantee for the loans taken by others from bank or financial institutions.

(xi) In our opinion and according to the information and explanation given to us, the loans availed by the Company from banks have been applied for the purposes for which they were obtained.

(xii) During the course of our examinations of the books and records of the Company carried out in accordance with the generally accepted practices in India and according to the information and explanations given to us , no instance of fraud on or by the company was noticed or reported during the year, nor have we been informed of such case by the management.

                                              for M.Bhaskara Rao & Co.,

                                                  Chartered Accountants

                                         Firm Registration No : 000459S

                                                         V K Muralidhar

                                                                Partner

Place: : Hyderabad                                 Membership No 201570