Management's Responsibility for the Financial Statements 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 Accounting Standards notified under the Companies Act,1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 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.

Auditor's Responsibility

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.

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 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. 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 we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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 ofthe Company as at March 31,2014;

(b) in the case ofthe Statement of Profit and Loss, ofthe profit for the year ended on that date; and

(c) in the case ofthe Cash Flow Statement, ofthe cash flows for the year ended on that date.

Emphasis of Matter

We would like to draw the attention on The Company's policy of providing gratuity and other long term employee's benefits on the payment basis and not on the actuarial valuation as per accounting standard-15. The same has been stated in Note No. 24

Report on Other Legal and Regulatory Requirements

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 ofthe Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 ofthe Order.

2. As required by Section 227(3) ofthe 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 o f 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 and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the attached Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 ofthe Companies Act, 2013; except non provision of gratuity as perNote No. 24.

(e) On the basis of written representations received from the directors as on March 31,2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 ofthe Companies Act, 1956.

ANNEXURE TO THE AUDITOR'S REPORT (Referred to in paragraph 1 of our report of even dale to the members of Santosh Fine-Fab Limited on the accounts for the year ended 1st March, 2014)

i. In respect of the Fixed Assets,

a) The company has maintained proper records showing full particulars, including quantitative details and situations of fixed assets.

b) As per the information and explanations given to us. physical verification of fixed assets has been carried out by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

c) None of part of fixed assets has been disposed off during the year under review, which could affect the going concern status of the company.

ii. In respect of the inventories :

a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us, 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) The company has maintained proper records of inventory. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii. In respect of loans granted, secured or unsecured, to the companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956, as per the information and explanations provided to us, we report that the Company has not granted any such loans and therefore, sub-clauses (b), (c) and (d) of clause (iii) of paragraph 4 of the said Order are not applicable to the Company.

In respect of loans taken, secured or unsecured, from the companies, firms or other parties covered in Register maintained under Section 301 of Companies Act, 1956, as per information and explanations given to us , we report that the company has not taken any unsecured loan during the year under review, hence other sub clause are not applicable.

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 and the nature of its business with regard to purchase of fixed assets. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal control system.

v. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we report that the transactions that need to be entered into a register in pursuance of section 301 of the Act, have been so entered.

b) In our opinion and according to the information and explanations give to us, the transactions made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 and exceeding the value of five lacs rupees in respect of any party during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. According to the information and explanations given to us, the Company has not accepted any deposits during the year from the public, within the meaning of the provisions of Sections 58A and 58AA of the Companies Act, 1956 and rules made there under. Therefore, the provisions of clause (vi) of paragraph 4 of the said Order are not applicable to the Company.

vii. In our opinion, the Company has an internal audit system commensurate with the size of the Company and the nature of its business.

viii. The Central Government has prescribed maintenance of the cost records under section 209(l)(d)of the Companies Act, 1956 in respect of textile manufacturing activity of the company. We have broadly reviewed the books of accounts and records maintained by the Company in this connection and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. a) According to the information and explanations given to us and the records examined by us, the company has been regular in depositing with appropriate authorities undisputed statutory dues including Income Tax, Provident Fund, Sales Tax and any other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31 st March 2014 for a period of more than six months from the date they became payable.

b) According to the records of the Company, and information and explanations given to us there are no dues of Income tax / Sales Tax/ Wealth Tax/ Service Tax/ Custom Duty, Excise Duty/ Cess which has not been deposited on account of disputes.

x. There are no accumulated losses of the Company as on 31 st March 2014. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. As per the information and explanations given to us and based on our audit, the Company has not defaulted in repayment of dues to financial institution or bank.

xii. Based on our examination of the records and the information given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of clause (xii) of paragraph 4 of the said Order are not applicable to the Company.

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

xiv. Based on our examination of the records and the information given to us, the Company has not dealt or traded in shares, securities, debentures and other investments. Therefore, the provisions of clause (xiv) of paragraph 4 of the said Order are not applicable to the Company.

xv. According to the information and explanations given to us. the Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. As per information and explanation, the company has taken term loans of Rs.26.41 Lacs during the year has been utilised for the purpose it was taken.

xvii. In our opinion and according to information and explanations made available to us, no short term funds have been utilized for long term purposes during the year.

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

xix. The Company has not issued any debentures. Therefore, the provisions of clause (xix) of paragraph 4 of the said Order are not applicable to the Company.

xx. The Company has not raised any money by public- issues during the year covered by our report. Therefore. the provisions of clause (xx) of paragraph 4 of the said Order are not applicable to the Company.

xxi. Based on our audit procedures performed for the purpose of reporting the true and fair view of financial statements and as per the information and explanations given to us by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

                                     For Bhuwania & Agrawal Associates

                                ICAI Firm Registration Number: 101483W
                                               (Chartered Accountants)

                                                         ABHISHEK JAIN

                                                               Partner

                                             Membership Number: 509839