ఆడిటర్ నివేదిక Naraingarh Sugar Mills Ltd.

Mar 31, 2024

We have audited the accompanying financial statements of Naraingarh Sugar Mills Limited which comprise the
Balance Sheet as at 31^st March, 2024, the Statement of Profit & Loss (including other
Comprehensive Income), Statement of Changes in Equity and Cash Flow Statement for the year then ended,
and notes to the financial statements, including a summary of significant accounting policies and other
explanatory information.

In our opinion and to the best of our information and according to the explanations given to us, except for the
effects of the matters described in the ''Basis for Qualified Opinion'' Section of our report the aforesaid financial
statements give the information required by the Companies Act 2013, as amended ("the Act") in the manner so
required and give a true and fair view in conformity with the accounting principles generally accepted in India
including the Ind AS, of the state of affairs of the Company as at 31^st March, 2024, its loss including other
comprehensive income, its cash flows and the changes in equity for the year ended on that date.

2. Basis for Qualified Opinion

a. We draw attention to Note 4.2 of the financial statements regarding Contingent Liabilities &

Commitments (including default in repaying Term/Soft Loans and guarantees) can adversely affect the
financial viability of the Company. Adverse decision by various adjudication authorities can further
erode the working capital as well as Share capital too. In spite of such serious nature, the management
of the Company has prepare the financial statements without acknowledging the liability and prepare it
on “Going Concern concept” However we have not been able to corroborate the
Management''s contention of “Going Concern”. Accordingly, we are unable to comment on the
“Going Concern Principle” of the Company.

b. We draw attention to Note 4.4 of the financial statements regarding default by Company in repaying
Loans (Principal and Interest) from Bank/Financial Institution. An FIR dated 28>^h December, 2021
was lodged u/s. 120B, 406, 409, 420, 468 & 471 of IPC against relative of Ex-Directors and other
officers of the Company. The management of the Company is also taken over by the State Government.
Further Land measuring 64 Acre in the name of Company was also attached by Hon’ble Court vide
order dated 25^th February, 2022. These developments can adversely affect to the overall functioning of
the Company and may also affect the “Going Concern Concept” of the Company. In spite of such
serious nature, the management of the Company has prepare the financial statements without
acknowledging the liability and prepare it on “Going Concern concept” However we have not been able
to corroborate the Management’s contention of “Going Concern”. Accordingly, we are unable to
comment on this point.

c. We draw attention to Note 4.5, 4.12 & 4.13 of the financial statements regarding party balances
including balance due from Mr. Rahul Anand who is the prime party of FIR along with other
Companies/Firms related to him. We are unable to comment on this point, since the matter is
subjudiced.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10)
of the Act. Our responsibilities under those (SAs) are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements Section of our report. We are independent of the Company in accordance
with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical
requirements that are relevant to our audit of the financial statements under the provisions of the Act and the
Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements
and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.

3. Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. We have considered the matters described below to be the key audit matters for
incorporation in our report.

Key Audit Matter	How our audit addressed the Key Audit Matter
Impact of Government Policies/Notifications on recognition of subsidy accruals/claims and their recoverability:
During the year, the Company has recognised Subsidy Claims aggregating to '' 253.00 Lakh in terms of Schemes notified by the State Government to offset the cane cost for sugar season 2023-2024. We considered this as a key audit matter because recognition of Subsidy Claims is subject to satisfaction of certain conditions mentioned in the related notification. Assessment of recoverability of the claim is subject to significant judgement of the management including certainty with respect to the satisfaction of conditions specified in the notification/policies, collections thereof	We understood and tested the design and operating effectiveness of controls as established by management in recognition and assessment of the recoverability of the claims. We evaluated the management’s assessment regarding reasonable certainty for complying with the relevant conditions as specified in the notification/policies and collections. We considered the relevant notifications/policies issued by various authorities to ascertain the appropriateness of the recognition of accruals/claims, adjustments to claims already recognised pursuant to changes in the rates and basis for determination of claims.
	Based on the above procedures performed, the management’s estimates related to recognition of subsidy accruals/claim and their recoverability are considered to be reasonable.

4. Information other than the financial statements and Auditor’s Report thereon.

The Company’s Board of Directors is responsible for the preparation of the other information. The other
information comprises the information included in Management Discussion and Analysis Report,
Board’s Report including Annexures to the Board’s Report, Corporate Governance Report, but does not include
the financial statements and our auditor’s report thereon.

Our report on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

5. Management’s Responsibility for Financial Statements

The Company’s Management & Board of Directors are responsible for the matters stated in Section 134(5) of
the Companies Act, 2013 with respect to the preparation of these Ind AS financial statements that give a true
and fair view of the financial position, financial performance including other comprehensive income, changes in
equity and cash flows of the Company in accordance with the accounting principles generally accepted in India,
including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. 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 judgement 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.

In preparing the financial statements, management is responsible for assessing the Company’s ability to

continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless management either intends to liquidate the Company or to cease operations,
or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company’s financial reporting process.

6. Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our

opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional
skepticism throughout the audit. We also:

a) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

b) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3)(i) of the Companies Act, 2013 we are also
responsible for expressing our opinion on whether the Company has adequate internal financial controls
reference to financial statement in place and the operating effectiveness of such controls.

c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.

d) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial statements or, if such disclosures are inadequate to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report.
However, future events or conditions may cause the Company to cease to continue as a going concern.

e) Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate,
makes it probable that the economic decisions of a reasonably knowledgeable user of the financial statements
may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of
our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified
misstatements in the financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that
we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.

7. Attentim is invited to the following points of Note ‘4’ of the financial statements.

i) Note 4.1 - regarding confirmation of attachment of Fixed Assets of the Company under the
Prevention of Money Laundering Act, 2002 by the Adjudicating Authority.

ii) Note 4.2 - Contingent Liabilities & Commitments.

iii) Note 4.3 - regarding calls in arrears and Redeemable Preference Shares.

8. Net-worth of the Company has completely eroded; the management is of the opinion that the Company shall
carry on its business as usual, hence the financial statements of the Company have been prepared on a going
concern basis; the appropriateness of the said basis is inter-alia dependent upon future performance and
profitability and presently we are unable to express an opinion on the same.

9. Report on Other Legal and Regulatory Requirements

A) As required by the Companies (Auditor’s Report) Order, 2020 issued by the Central Government of India
in terms of sub-section (11) of Section 143 of the Act, we give in the “Annexure A” a statement on the

matters specified in the paragraph 3 and 4 of the Order.

B) As required by Section 143(3) of the Act, we report that:

(a) Except for the matters described in the basis of Qualified Opinion Paragraph, we have sought and
obtained all the information and explanations which to the best of our knowledge and belief were
necessary for the purposes of our audit;

(b) Except for the matters described in the basis of Qualified Opinion Paragraph, the 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 (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) Except for the matters described in the basis of Qualified Opinion Paragraph, the aforesaid
Ind AS financial statements, comply with the Indian Accounting Standards, specified under
Section 133 of the Act;

(e) on the basis of the written representations received from the Directors as on 31^st March, 2024 taken on
record by the Board of Directors, none of the Directors is disqualified as on 31^st March, 2024 from being
appointed as a Director in terms of Section 164(2) of the Act;

(f) With respect to the recording of Audit Trail (edit log) facility, the feature was enabled in the accounting
software of the Company throughout the audit period and the audit trail feature has not been tampered
with and the audit trail has been preserved by the company as per the statutory requirements for record
retention.

(g) with respect to the adequacy of internal financial controls over financial reporting of the Company and
the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

(h) 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, in our opinion and to the best of our information and
according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its
financial statements (Refer note 4.1, 4.2, 4.4 & 4.7);

ii. the Company did not have any long-term contracts including derivative contracts for which there were
any material foreseeable losses; and

iii. there were no amounts which were required to be transferred, to the Investor Education and
Protection Fund by the Company.

iv. a) The Management has represented that, to the best of its knowledge and belief, no funds have been

advanced or loaned or invested (either from borrowed funds or any other sources) by the Company
to/in any person or entity (“Intermediary”), with the understanding, whether recorded in writing or
otherwise, that the Intermediary shall, directly or indirectly lend or invest, in any person or entity,
identified in any manner whatsoever (“Ultimate Beneficiaries”), by or on behalf of the Company
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

b) The management has represented that, to the best of its knowledge and belief, no funds have been
received by the Company from any person or entity (“Funding Parties”), with the understanding,
whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or
invest in any person or entity identified in any manner whatsoever (“Ultimate Beneficiaries”) by
or on behalf of the Funding Party or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.

c) Based on the audit procedures adopted by us, nothing has come to our attention that has caused us
to believe that the representations made by the management under sub clause (a) & (b) above,
contain any material misstatement.

v. The Company has not declared or paid any dividend, during the year.

C) With respect to the matter to be included in the Auditors’ Report under Section 197(16):

In our opinion and according to the information and explanations given to us, the remuneration paid by
the Company to its Director during the current year is in accordance with the provisions of Section 197
of the Act. The remuneration paid to any Director is not in excess of the limit laid down under
Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under
Section 197(16) which are required to be commented upon by us.

For P.K. VASUDEVA & CO.
CHARTERED ACCOUNTANTS
Firm Registration No. - 000724N

Dated : 20^th June, 2024 (PRATEEK PURI)

Place : Chandigarh PARTNER

Membership No. - 524431

---

Mar 31, 2014

1. We have audited the accompanying financial statements of Naraingarh Sugar Mills Limited which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit & Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. 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 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. 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.

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 auditor''s judgement, 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 the purpose of expressing an opinion on the effectiveness of the entity''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.

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

5. 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 inconformity 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 the Statement of Profit & 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 for the year ended on that date.

6. As required by the Companies (Auditor''s Report) Order, 2003, as amended, 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.

7. 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, Statement of Profit & Loss and 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 & Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 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, to the extent applicable;

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 is, prima facie, 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 Companies Act, 1956.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 6 of our report of even date on accounts of Naraingarh Sugar Mills Limited for the year ended 31st March, 2014).

i. In respect of its Fixed Assets :

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

b) As explained to us, the Company has a phased programme of physical verification of all of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme the management, during the year, has physically verified its fixed assets and no material discrepancies were noticed on such verification.

c) The Company did not dispose off substantial part of its fixed assets, during the year.

ii. In respect of its Inventories :

a) According to the information and explanations given to us, the physical verification of inventories is conducted by the management at periodic intervals; the frequency of verification is reasonable having regard to the size of the Company and the nature of its inventories.

b) According to the information and explanations given to us, the procedures for physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) According to the information and explanations given to us, the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

iii. a) 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 301 of the Companies Act, 1956. Accordingly, clauses (a) to (d) of paragraph 4(iii) of the Order are not applicable; hence not commented upon.

b) According to the information and explanations given to us, the Company has taken unsecured loans (interest free) from two other parties covered in the register maintained under Section 301 of the Companies Act, 1956. (The maximum amount outstanding during the year and the year end balances were Rs. 1,109.95 lacs & Rs. 1,056.40 lacs respectively).

c) According to the information and explanations given to us, the conditions in respect of unsecured loans taken by the Company from parties covered in the register maintained under Section 301 of the Companies Act, 1956 are prima-facie, not prejudicial to the interest of the Company.

d) According to the information and explanations given to us, unsecured loans taken by the Company from two other parties, covered in the register maintained under Section 301 of the Companies Act, 1956 are repayable, on mutually agreed terms & conditions.

iv. According to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchase of inventories, fixed assets and with regard to the sale of goods. The Company did not have any sale of services during the year. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any major weakness in the aforesaid internal control system during the year.

v. a) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in para v(a) above & exceeding the value of rupees five lacs in respect of any party, during the year, have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

vi. According to the information & explanations given to us, the Company has not accepted any deposits from the public.

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

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) ofsub-section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

However, we have not made a detailed examination of the records with a view to determine whether they are accurate & complete.

ix. In respect of its Statutory dues :

a) According to the information & explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Wealth Tax, Cess and other material statutory dues, to the extent applicable, have generally been regularly deposited, during the year, by the Company with the appropriate authorities.

b) According to the information and explanations given to us, no undisputed amounts payable, in respect of Provident Fund, Employees State Insurance, Investor Education and Protection Fund, Income Tax, Sales Tax, Service Tax, Excise Duty, Custom Duty, Wealth Tax, Cess and other material statutory dues, were in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, there are no statutory dues, except Cane Purchase Tax Rs. 29,733,831/- for the financial years 1996-1997 to 2001-2002, which have not been deposited and remained unpaid, as at 31st March, 2014, on account of any dispute; the decision of the Hon''ble Punjab & Haryana High Court, Chandigarh is awaited.

x. The Company does not have any accumulated losses as at 31st March, 2014 and has not incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

xi. According to the information & explanations given to us and on the basis of verification of records; the Company has not defaulted in repayment of dues to the bank. The Company, during the year, has not taken any loan from financial institution.

xii. According to the information & explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. According to the information & explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

xiv. According to the information & explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments; accordingly clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

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

xvi. According to the information and explanations given to us, the term loan taken by the Company has been applied for advance for capital goods and surplus funds, pending utilisation for the stated purpose, have been temporarily deployed in bank accounts.

xvii. According to the information & explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have, prima-facie, been used for long-term investment by the Company.

xviii. According to the information & explanations given to us, the Company has not made any preferential allotment of shares during the year to parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. The Company did not have any outstanding debentures during the year.

xx. The Company has not raised any money by public issues during the year.

xxi. According to the information & explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For VASUDEVA & ASSOCIATES CHARTERED ACCOUNTANTS Firm Registration No. - 022239N

sd/- Dated : 30th May, 2014 (NITI M. LATAWA) Place : Chandigarh PARTNER Membership No. - 511907

---

Mar 31, 2013

1. We have audited the accompanying financial statements of Naraingarh Sugar Mills Limited which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit & Loss and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. 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. 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.

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 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.

5. 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 inconformity 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, 2013;

(ii) in the case of the Statement of Profit & 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 for the year ended on that date.

6. As required by the Companies (Auditor''s Report) Order, 2003, as amended, 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 A and 5 of the Order.

7. 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, Statement of Profit & Loss and 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 & Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on 31st March, 2013, and taken on record by the Board of Directors, none of the directors is, prima facie, disqualified as on 31st March, 2013, from being appointed as a director in terms of clause (g) of sub-section (I) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITOR''S REPORT

(Referred to in paragraph 6 of our report of even date on accounts of Naraingarh Sugar Mills Limited for the year ended 31st March, 2013).

i. In respect of its Fixed Assets:

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

b) As explained to us, the Company has a phased programme of physical verification all of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme the management, during the year, has physically verified its fixed assets and no material discrepancies were noticed on such verification.

c) The Company, during the year, did not dispose off any of its fixed assets. ii. In respect of its Inventories:

a) According to the information and explanations given to us, the physical verification of inventories is conducted by the management at periodic intervals; the frequency of verification is reasonable having regard to the size of the Company and the nature of its inventories.

b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

0 As explained to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. However, minor discrepancies noticed on physical verification were properly accounted/adjusted.

iii. a) According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to Companies/firms/other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clauses (a) to (d) of paragraph 4(iii) of the Order are not applicable; hence not commented upon.

b) According to the information and explanations given to us, the Company has taken, interest free, unsecured loans from two other parties, covered in the register maintained under Section 301 of the Companies Act, 1956 (The maximum amount outstanding during theyear-'' 1,591.95lacsandtheyearendbalancewas'' 1,109.95lacs).

c) According to the information and explanations given to us, the terms and conditions of

payment of interest and repayment of principal (though not determined) are prima-facie, not prejudicial to the interest of the Company.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. a) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in para v(a) above 8t exceeding the value of rupees five lacs in respect of any party, during the year, have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

vi. According to the information ft explanations given to us, the Company has not accepted deposits from the public within the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

vii. In our opinion and according to the information 8t explanations given to us, the internal audit system is commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the accounts and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

However, we have not made a detailed examination of the records with a view to determine whether they are accurate & complete.

ix. In respect of its Statutory dues:

a) According to the information & explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Wealth Tax, Cess and other material statutory dues, to the extent applicable, have generally been regularly deposited, during the year, by the Company with the appropriate authorities.

However, the Company, as per the mutual understanding with the concerned Department, is regularly depositing the specified amount every year.

b) According to the information and explanations given to us, there are no statutory dues, except Cane Purchase Tax '' 33,910,041 /- for the financial years 1996-1997 to 2002-2003, which have not been deposited and remained unpaid, as at 31st March, 2013, on account of any dispute; the decision of the Hon''ble Punjab ft Haryana High Court, Chandigarh is awaited.

x. The Company does not have any accumulated losses as at 31st March, 2013 and has not incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

xi. According to the information & explanations given to us and on the basis of verification of records; subject to realisation of cheques, the Company has not defaulted in repayment of dues to the banks. The Company has not taken any loan from financial institution.

xii. According to the information fit explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

xiii. According to the information & explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

xiv. According to the information & explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments; accordingly clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

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

xvi. According to the information and explanations given to us, term loans (vehicle loans & business loans) have been applied for the purposes for which the loans were obtained.

xvii. According to the information & explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no significant funds raised on short-term basis have, prima-facie, been used for long-term investment by the Company.

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

xix. According to the information & explanations given to us, the Company, during the year has neither issued any debentures nor raised any money through a public issue; accordingly clauses( xix) &( xx) of paragraph A of the Order are not applicable to the Company.

xx. Based on the information & explanations furnished by the management, which have been relied upon by us, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

For VASUDEVA a ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration No. -022239N

Sd/-

Dated : 17th May, 2013 (PIYUSH SINGLA)

Place : Chandigarh PARTNER Membership No. - 520263

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Naraingarh Sugar Mills Limited as at 31 st March, 2012, the related Statement of Profit & Loss and 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 (Auditor''s Report) Order, 2003, (as amended) 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 of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, 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 in paragraph 3 above, 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 purposes 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 & Loss and 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 & Loss and Cash Flow Statement, dealt with by this report, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable.

e) On the basis of written representations received from the directors as on 31st March, 2012 and taken on record by the Board of Directors, none of the directors is, prima facie, disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of sub-section (1)ofSection 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us the said accounts, read with notes annexed thereto, give in the prescribed manner the information required by the Companies Act, 1956 and give a true and fair view inconformity 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 31 stMarch, 2012.

ii) in the case of the Statement of Profit fit Loss, of the profit for the year ended on that date.

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

ANNEXURE TO THE AUDITOR''S REPORT

(Referred to in paragraph 3 of our report of even date on accounts of Naraingarh Sugar Mills Limited for the year ended 31 st March, 2012).

i. In respect of its Fixed Assets:

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

b) As explained to us, the Company has a phased programme of physical verification all of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme the management, during the year, has physically verified its fixed assets and no material discrepancies were noticed on such verification.

c) The Company, during the year, did not dispose off any of its fixed assets.

ii. In respect of its Inventories:

a) According to the information and explanations given to us, the physical verification of inventories is conducted by the management at periodic intervals; the frequency of verification is reasonable having regard to the size of the Company and the nature of its inventories.

b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) As explained to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification. However, minor discrepancies noticed on physical verification were properly accounted/adjusted.

iii. a) According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to Companies/firms/other parties covered in the register maintained under Section 301 of the Companies Act, 1956; accordingly clause (iii) (b) to (d) of paragraph 4 of the Order are not applicable; hence not commented upon.

b) The Company has taken, interest free, loans from four parties (Balance outstanding Rs. 1,161.11 lacs & Maximum balance outstanding during the year Rs. 1,161.11 lacs); covered in the register maintained under Section 301 of the Companies Act, 1956; terms & conditions of repayment etc; (though not determined) are, prima facie, not prejudicial to the interest of the Company.

c) The Company has not taken any loans, secured or unsecured from Companies/firms covered in the register maintained under Section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. a) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in para v(a) above & exceeding the value of rupees five lacs in respect of any party, during the year, have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at the relevant time.

vi. According to the information & explanations given to us, the Company has not accepted deposits from the public within the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

vii. In our opinion and according to the information & explanations given to us, the internal audit system is commensurate with the size of the Company and nature of its business.

viii. We have broadly reviewed the accounts and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. .

However, we have not made a detailed examination of the records with a view to determine whether they are accurate & complete.

ix. In respect of its Statutory dues:

a) According to the information & explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of accountsn respect of undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Wealth Tax, Cess and other material statutory dues, to the extent applicable, have generally been regularly deposited, during the year, by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable, in respect of Provident Fund, Employees State Insurance, Investor Education and Protection Fund, Income Tax, Sales Tax, Service Tax, Excise Duty, Customs Duty, Wealth Tax, Cess and other material statutory dues, were in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no statutory dues (except Cane Purchase Tax Rs. 33,910,041 / - for the financial years 1996-1997 to 2002-2003) which have not been deposited with the appropriate authorities, as at 31st March, 2012, on account of any dispute.

x. The Company does not have any accumulated losses as at 31st March, 2012 and has not incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

xi. According to the information & explanations given to us and on the basis of verification of records, the Company has not defaulted in repayment of dues to the banks. The Company has not taken any loan from financial institution.

xii. According to the information & explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

xiii. According to the information 6t explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

xiv. According to the information & explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments; accordingly clause (xiv) of paragraph 4 of the Order is not applicable to the Company.

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

xvi. According to the information and explanations given to us, term (vehicle) loans have been applied for the purpose for which the loans were obtained.

xvii.According to the information & explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2012, we report that no significant funds raised on short-term basis have, prima-facie, been used for long-term investment by the Company.

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

xix. According to the information & explanations given to us, the Company, during the year has neither issued any debentures nor raised any money through a public issue; accordingly the provisions of clauses( xix) &( xx) of paragraph 4 of the Order are not applicable to the Company. ''

xx. Based on the information & explanations furnished by the management, which have been relied upon by us, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

For VASUDEVA & ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration No. -022239N

Sd/-

Dated : 25th July, 2012 (PIYUSH SINGLA)

Place : Chandigarh PARTNER

Membership No. - 520263

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Naraingarh Sugar Mills Limited as at 31 st March, 2011, the related Profit ft Loss Account and 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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 (Auditor's Report) Order, 2003, (as amended) 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 of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, 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 in paragraph 3 above, 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, Profit & Loss Account and Cash Flow Statement, dealt with by this report, are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement, dealt with by this report, comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable.

e) On the basis of written representations received from the directors as on 31st March, 2011 and taken on record by the Board of Directors, none of the directors is, prima facie, disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us the said accounts, read with notes thereon and Schedules annexed thereto, give in the prescribed manner the information required by the Companies Act, 1956 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, 2011.

ii) in the case of the Profits Loss Account, of the profit for the year ended on that date.

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

(Referred to in paragraph 3 of our report of even date on accounts of Naraingarh Sugar Mills Limited for the year ended 31st March, 2011).

1. In respect of its Fixed Assets :

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

b) According to the information and explanations given to us, the Company has a phased programme of physical verification all of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified its fixed assets during the year and no material discrepancies were noticed on such verification.

c) In our opinion and according to the explanations given to us, a substantial part of fixed assets, has not been disposed off during the year, thus there is no effect on the going concern status of the Company.

2. In respect of its Inventories:

a) According to the information and explanations given to us, physical verification of inventories is conducted by the management at periodic intervals; these intervals are reasonable having regard to the size of the Company and the nature of its inventories.

b) The procedures followed by the Company for physical verification of inventories are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. As explained to us, the discrepancies noticed on verification between the physical stocks fit the book records were not material 8t have been properly dealt with in the books of account.

3. 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 Companies Act, 1956; accordingly clauses (3-b) to (3-d) are not applicable and have, therefore, not been commented upon.

b) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from Companies/firms covered in the register maintained under Section 301 of the Companies Act, 1956.

c) The Company has taken, interest free, loans from four parties (balance outstanding at the end of the year was Rs 1134.11 lacs) covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has not entered into any contractual agreement(s) with the above referred parties in the regard to repayment/refund or payment of interest etc.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. a) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements & exceeding the value of rupees five lacs in respect of any party, during the year, have been made at prices which are, prima facie, reasonable having regard to the prevailing market prices at relevant time.

6. According to the information 6t explanations given to us, , the Company has not accepted deposits from the public within the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. In our opinion and according to the information & explanations given to us, the internal audit system is commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the accounts and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate & complete.

9. In respect of its Statutory dues:

a) According to the information & explanations given and records produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Cess, and other material statutory dues, as applicable, with the appropriate authorities except Income Tax (MAT - Rs 9,749,840/-), Corporate Dividend Tax (Rs 948,479/-) and Cane Purchase Tax (Rs 45,084,345/-) which are in arrears as at 31st March, 2011 for a period of more than six months from the date they became payable.

b) According to the records of the Company there are no statutory dues that remained unpaid, as at 31st March, 2011, on account of any dispute.

10.The Company does not have any accumulated losses as at 31st March, 2011 and has not incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

11. According to the information & explanations given to us and on the basis of verification of records, the Company has not defaulted in repayment of dues to any banks Get financial institution.

12. According to the information & explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

13. According to the information & explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

14. According to the information & explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments; accordingly the provisions of clause 4(xiv) of the Order are not applicable to the Company.

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

16. According to the information and explanations given to us, term loans taken, during the year, have been applied for the purpose for which the loans were obtained.

17. According to the information & explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31 st March, 2011, we report that no significant funds raised on short-term basis have, prima-facie, been used for long-term investment by the Company.

18. The Company has not made any preferential allotment of shares to parties and Companies covered in the registered maintained under Section 301 of the Companies Act, 1956, during the year.

19. The Company has not issued any debentures.

20. The Company has not raised any money by public issue during the year.

21. Based on the information fit explanations furnished by the management, which have been relied upon by us, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

For VASUDEVA a ASSOCIATES CHARTERED ACCOUNTANTS

Sd/-

Dated: 30th July, 2011 (NITIM. LATAWA)

Place: Chandigarh PARTNER

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Naraingarh Sugar Mills Limited as at 31st March, 2010, the related Profit & Loss Account and 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 misstatement. An audit includes examining, on a tpst basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the 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, (as amended) by the Companies (Auditors Report) (Amendment) 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 of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give 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 in paragraph 3 above, 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, Profit & Loss Account and Cash Flow Statement, dealt with by this report, are in agreement with the books of account.

d) In our opinion, Balance Sheet, Profit & Loss Account and Cash Flow Statement, dealt with by this report, comply with the Accounting Standards referred to in sub-Section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable.

e) On the basis of written representations received from the directors as on 31st March, 2010 and taken on record by the Board of Directors, none of the directors is, prima facie, disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1)of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to trie explanations given to us the said accounts, read with notes thereon and Schedules annexed thereto, give in the prescribed manner the information required by the Companies Act, 1956, 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, 2010.

ii) in the case of the Profit & Loss Account, of the profit of the Company for the year ended on that date.

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of our report of even date on accounts of Naraingarh Sugar Mills Limited for the year ended 31st March, 2010)

1. In respect of its Fixed Assets :

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

b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified its fixed assets during the year and no material discrepancies were noticed on such verification.

c) In our opinion and according to the explanations given to us, a substantial part of fixed assets, has not been disposed off during the year, thus there is no effect on the going concern status of the Company.

2. In respect of its Inventories:

a) According to the information and explanations given to us, physical verification of inventories is conducted by the management at periodic intervals; these intervals are reasonable having regard to the size of the Company and the nature of its inventories.

b) The procedures followed by the Company for physical verification of inventories are reasonable and adequate in relation to the size of the Company and the nature of its business. ...

c) The Company is maintaining proper records of inventory and no material discrepancies, were noticed on physical verification as compared to book records.

3. a) In our opinion and according to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from Companies/firms covered in the register maintained under section 301 of the Companies Act, 1956.

b) The Company has taken, interest free, loans from four parties (the maximum balance outstanding during the year was Rs. 1139.11 lacs and at the end of the year was Rs. 1134.11 lacs) covered in the register maintained under Section 301 of the Companies Act, 1956 pursuant to the stipulation imposed by banks/financial institutions at the time of sanction of loans; the terms and conditions of repayment etc., though not determined are, prima facie, not prejudicial to the interest of the Company.

c) 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 Companies Act, 1956; accordingly clauses 3(b) to 3(d) are not applicable and have, therefore, not been commented upon.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. a) According to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements & exceeding the value of rupees five lacs in respect of any party, during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion & according to the information & explanations given to us, the Company has not accepted any deposits from the public, within the meaning of Sections 58A & 58AA or any other relevant applicable provisions of the Companies Act, 1956 and the rules framed thereunder.

7. In our opinion and according to the information & explanations given to us, the internal audit system is commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the accounts and records maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. In respect of its Statutory dues:

a) According to the information & explanations given and records produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Employees State Insurance, Provident Fund, Investor Education and Protection Fund, Income-Tax, Sales-Tax, Wealth-Tax, Service Tax, Custom Duty, Excise Duty, Cess, and other material statutory dues, as applicable, with the appropriate authorities.

b) According to the information 8t explanations given to us, Income Tax (MAT Rs. 5,223,668/-), Corporate Dividend Tax (Rs. 7,952,763/-) and Cane Purchase Tax (Rs. 48,291,306/-) were in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, there are no undisputed statutory demands which remained unpaid as at 31st March, 2010.

10. The Company does not have any accumulated losses as at 31s March, 2010 and has not incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

11. According to the information 8t explanations given to us and on the basis of verification of records, the Company has not defaulted in repayment of dues to any banks or financial institution.

12. According to the information & explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures or other securities.

13. According to the information & explanations given to us, the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

14. According to the information fit explanations given to us, the Company is not dealing or trading ?rt shares, securities, debentures and other investments; accordingly the provisions of clause 4(xiv) of the Order are not applicable to the Company.

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

16. According to the information and explanations given to us, term loans availed by the Company have been utilised for the purpose for which the loans were raised.

17. According to the information fit explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2010, we report that no significant funds raised on short-term basis have, prima-facie, been used for long- term investment by the Company.

18. Based on the information fit explanations furnished by the management, which have been relied upon by us, we report that no case of fraud on or by the Company has been noticed or reported during the year under audit.

19. The remaining clauses of the order are either not applicable to the Company or are not relevant in the current year and accordingly, we have not reported thereon.

For VASUDEVA a ASSOCIATES

CHARTERED ACCOUNTANTS

sd/-

Dated: 24/07/2010 (NITI M. LATAWA)

Place: Chandigarh PARTNER