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 the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") except Note No. 13 of Notes forming part of the accounts of the company, relating to non compliance of Accounting Standard 15 with regard to Gratuity liability.

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

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 ate 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.

Basis for Qualified Opinion

Reference is invited to Nole No.13 of Notes forming part of the accounts of the company,

relating to non compliance of Accounting Standard 15 with regard to Gratuity liability. In absence of information, we are not able to determine what any adjustments which might be necessary in Long Term Provision and Loss for the year and thereby Reserve & Surplus.

Opinion

in our opinion and to the best of our information and according to the explanations given to us, the said financial statements except for the possible effect of the matter described in the Basis for Qualified Opinion paragraph, 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 31,2014; and

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

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

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note No.1 regarding "preparation of accounts on Going Concern Basis". Note No.9 non provision of Interest of Rs.7,76,138 payable to A.P. govt. towards interest free sales tax loan and Note, No. 10 regarding review in respect of Debtors, Creditors, Loans and Advances etc. etc. are subject to confirmation and reconciliation and adjustments which may require Provision for towards outstanding amounts.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2003 ("theOrder") issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. 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 appears from our examination of those books

c) the Balance Sheet and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account.

d) in our opinion, the Balance Sheet and Statement of Profit and Loss comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 except as Note No.1A vii) relating to non compliance of Accounting Standard 15 with regard to leave encashment liability.

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 of the Companies Act, 1956.

Annexure

Referred to in paragraph 1 of our report of even date.

As required by the Revised Companies (Auditor's Report) order 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 and on the basis of such checks we consider appropriate, we further state that:

1. The nature of Company's activities during the year has been such that following clauses of paragraph 4 of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company: Clauses (ii), (iii)(a),(b),(c),(d),(v), (vi), (viii), (xii), (xiii), (xiv), (xv), (xvi),(xvii),(xviii), (xix),(xx) & (xxii.

2. In respect of Fixed Assets.

a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information. But the registers are not yet updated.

b) As explained to us, the fixed Assets have been physically verified by the management at the end of year, which in our opinion is reasonable, having regard to the size of the company and nature of the Assets No material discrepancies were noticed on such verification.

c) In our opinion the company has not disposed substantial part of fixed assets during the year and going concern status of company has not effected.

3. a) The company has taken unsecured loan payable on demand from Bambolli Holdings Pvt. Limited, and Bombay Footwear Pvt. Limited. The year end balance of which are Rb.8,42,63,003 and Rs.16,38,194 respectively.

b) In our opinion and according to the information and explanations given to us, the rate of interest wherever applicable and terms and conditions are not prima facie prejudicial to the interest of the company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with size of the company and its nature of business for the purchase of inventory, fixed assets and also sale of goods.

5. The company has no Internal Audit System and the Company has not appointed any Internal Auditors for the company.

6. a) As informed to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employees' state insurance, income tax, sale tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

b) According to the information and explanations give to us, no undisputed amounts payable in case of income tax, sales tax, wealth tax, service tax, customs duty, exci$e duty and cess were in arrears, as at 31-03-2014 for a period of more than six months from the date.

7. The company has accumulated losses and has incurred cash losses during the financial year and immediately preceding such financial year exceeding 100% of the net worth of the company.

8. The company has no dues payable to financial institution or bank. However the company has defaulted in making payment of Sales Tax loan payable to A.P.State Govt.

9. During the year the Company has not raised any funds for Short Term Loan.

                                              For J. L. BHATT & COMPANY
                                                  Chartered Accountants
                                                  Firm Reg. No: 101332W

                                                        YOGESH J. BHATT
                                                             Partner
                                                   Membership No. 30170
Place: Mumbai
Date: 29th May,2014