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Auditor Report of A Infrastructure Ltd.

Mar 31, 2016

INDEPENDENT AUDITOR''S REPORT

TO THE MEMBERS OF A Infrastructure Limited Report on the Financial Statements

We have audited the accompanying financial statements of A Infrastructure Limited ("the Company"), which comprise the Balance Sheet as at 31stMarch, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order under section 143(11) of the Act.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10)of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31stMarch, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 it appears from our examination of those books.

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

d. In our opinion, the aforesaid financial statements comply with the accounting standards referred to in section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014.

e. On the basis of written representation received from the directors as on 31stMarch, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016, from being appointed as a director in terms of sub section (2) of section 164 of the Companies Act, 2013.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in ''Annexure A''. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to best of our information and according to the explanation given to us:

i The company has disclosed the impact of pending litigation as at 31st March, 2016 on its financial position in its financial statement-Refer Note 32 of Financial Statements.

ii The company did not have any long term contracts, including derivative contracts for which there were any material foreseeable losses.

iii There has been no delay in transferring amounts, required to be transferred, to the investor''s education and protection fund by the company.

2. As required by the Companies (Auditor''s Report) Order, 2016, issued by the Central Government of India in terms of sub section (11) of section 143 of the Act, (hereinafter referred to as the "Order"), we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

(Referred to in paragraph 1(f) under ''Report on Other Legal and Regulatory Requirements'' of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (''the Act'')

We have audited the internal financial controls over financial reporting of A Infrastructure Limited (the Company) as of 31 March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the ''Guidance Note'') issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section-143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Re: A Infrastructure Limited

(Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(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) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of buildings which are freehold, are held in the name of the Company as at the Balance Sheet date. In respect of immovable properties of land that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement.

(ii) As explained to us, inventories were physically verified during the year by the management at reasonable intervals, except for inventories lying with third parties where confirmations of inventories held by such third parties have been received and no material discrepancies were noticed on physical verification.

(iii) The Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. In our opinion the terms and conditions for the said loan is not prejudicial to the companies interest. Schedule of repayment of principal and payment of interest is stipulated.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of making investments as applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. Therefore, the provision of clause (v) of the Order is not applicable.

vi) According to the information and explanations given to us, in our opinion, the Company has, prima facie, made and maintained the prescribed cost records pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended and prescribed by the Central Government under subsection (1) of Section 148 of the Companies Act, 2013. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues including Provident fund, Employees'' State Insurance, Income-tax, Sales tax, Service Tax, Customs duty, Excise duty, Value Added Tax, cess and any other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident fund, Employees'' State Insurance, Income tax, Sales-tax, Service Tax, Customs duty, Excise duty, Value Added Tax, cess and any other material statutory dues in arrears, as at 31 March 2016 for a period of more than six months from the date they became payable.

(c) Details of dues of Income Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited as on 31 March 2016 on account of disputes. (Refer Annexure C)

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and government. The Company has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company for the purposes for which they were raised. The Company has not raised monies by way of initial public offer or further public offer (including debt instruments).

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii In our opinion and according to the information and explanations given to us the Company is in compliance with Section 188 and 177of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-I of the Reserve Bank of India Act, 1934.

For Agiwal & Associates

Chartered Accountants

Firm Registration No. 000181N

Sd/-P.C. Agiwal

Place : New Delhi Partner

Date : 30th May, 2016 Membership No. 080475


Mar 31, 2013

We have audited the accompanying financial statements of A Infrastructure Ltd. ("the Company"), which comprise the Balance Sheet as at 31st March , 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

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"). 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 the 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 the 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 the 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 the 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 of, the Company as at 31st March, 2013;

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

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. 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 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 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 it appears from our examination of those books.

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

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

(e) On the basis of the written representations received from the directors as on 31st March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

(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) According to the information and explanations given to us, the Fixed Assets have been physically verified by the Management during the year and no material discrepancies have been noted.

(c) In our opinion and according to information and explanations given to us, the Company has not disposed off substantial part of fixed assets during the year.

(ii) In respect of its inventories:

(a) The inventory has been physically verified by the management at the end of the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of Inventories followed by the management are found reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to information and explanations given to us, the Company is maintaining proper records of its inventories. The discrepancies noticed on verification, where physical verification has taken place, between the physical stocks and book records which are not material in relation to the Company, have been properly dealt with in the books of accounts as informed to us.

(iii) In respect of unsecured loans:

(a) During the year, the Company has taken Unsecured Loans from the Companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956 as explained to us. Maximum amount involved during the year was Rs. 169.54 lakhs from 5 parties. Year-end balance from such parties was Rs. 116.16 lakhs. The rate of interest and other terms & conditions are not prejudicial to the interest of the Company.

(b) As explained and informed to us, the Company has given unsecured loans to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Maximum amount involved during the year was Rs. 1191.72 lakhs to 9 parties. Year-end balance from such parties was Rs. 345.04 lakhs. The terms and conditions are not prejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has an adequate internal control procedure commensurate with its size and nature of its business, for the purchase of inventory, fixed assets and for purchase/sale of goods. During the course of our audit, we have not observed any major weakness in the internal control.

(v) In respect of the contracts or arrangement referred to in Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made during the year in pursuance of such contracts and arrangements exceeding value of Rupees five lakhs for each party, have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time except for certain transactions for sale of materials of sub-standard quality.

(vi) The Company has not accepted any deposits from the public during the year, which covered under section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975.

(vii) in our opinion, the Company has an internal audit system, commensurate with the size and nature of its business. The coverage of Internal Audit should be enlarged.

(viii) The Company has maintained cost records relating to products of the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956, as certified by their cost auditors and we have relied upon the same.

(ix) In respect of Statutory dues:

(a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Service Tax, Sales Tax, Wealth Tax, Custom Duty, Excise-Duty, Cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were outstanding, as at 31st March, 2013 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 statutory dues which have not been deposited on account of any dispute. (Please refer Annexure II)

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current and immediately preceding financial year. (xi) On the basis of examination of records and according to the information and explanations given to us, there has not been any delay in repayment of dues to the banks by the Company. At the year end, there were no overdoes in repayments to banks.

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

(xiii) In our opinion the Company is not a Chit/nidhi/mutual benefit funds/society, therefore the provisions of clause 4(xiii) of the CARO, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion and according to information and explanations given to us, the Company has given guarantee for loan taken by a corporate entity from a Bank. According to the information and explanation given to us, we are of the opinion that terms and conditions thereof are not prejudicial to the interest of the Company.

(xvi) On the basis of information and explanations provided to us, the term Loans have been applied for the purposes for which they were raised.

(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis have not been generally used for long-term investment

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

(xix) As the Company has not issued any debentures, paragraph 4(xix) of the Order is not applicable.

(xx) During the year, since the Company has not raised money by way of public issue, paragraph 4(xx) of the Order is not applicable.

(xxi) To the best of our knowledge and according to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

ANNEXURE-II (Rs, in lacs)

Nature of Dues Amount Period TO WHICH The Authority where the amount relates dispute is pending

Works Contract Tax 34.60 2004-05 D.C.(Appeal), Ahmadabad

RST & CST 937.00 Dec.2003 March 2006 CESTAT, New Delhi Entry Tax 3.90 2006-07 D.C.(Appeal), Bhilwara

Entry Tax 2.48 2007-08 D.C.(Appeal), Bhilwara

Entry Tax 3.15 2008-09 D.C.(Appeal), Bhilwara

RST & CST 45.79 2007-08 Appeal against Final Assessment pending in Rajasthan Tax Board, Ajmer and Revision against Provisional Assessment pending in Rajasthan High Court, Jodhpur

RST & CST 9.82 2008-09 Appeal against Provisional Assessment pending in Rajasthan High Court, Jodhpur and Revision against Final Assessment pending in D.C.(Appeal), Bhilwara.

RST & CST 64.44 2009-10 Rajasthan High Court, Jodhpur

Income Tax 12.05 2009-10 CIT (Appeal), Ajmer

RVAT & CST 49.83 2010-10 Rajasthan Tax Board,Ajmer

Total 1163.06

* Net of tax deposted including the paynment which will be made before filling of the return of income



for AGIWAL & ASSOCIATES

Chartered Accountants

(FRN-000181N)

Place : New Delhi Sd/-

Date: 30-05-2013 (D.C.Maheshwari)

Partner

M. No. 009883


Mar 31, 2012

We have audited the attached Balance Sheet of A Infrastructure Ltd. as at 31st March, 2012 and also the Statement of Profit and Loss of the Company for the year ended on that date and Cash Flow Statement of the Company annexed thereto for the year ended on that date. These financial statements are the responsibility of the Company Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Department of Company Affaires in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 & 5 of the said Order, to the extent applicable to the Company.

2. Further to our comments in the annexure referred to in paragraph 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 Accounts 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 the Statement of Profit & Loss dealt with by this report are in agreement with the Books of Accounts;

d) In our opinion, the Balance sheet and the Statement of Profit & Loss dealt with by this report comply with the accounting standards refer to in subsection (3C) of section 211 of the Companies Act, 1956

e) On the basis of written representations received from the directors as on 31s' March, 2012, and taken on record by the board of directors, we report that none of the directors is disqualified as on 31st March, 2012 from being appointed as a director in terms of clause (g) of subsection (1) of section of 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 read with Note no. 42 regarding income accrued from operations of manufacturing unit taken on lease from Gujarat Composite Limited. shown as operating income as explained in the above stated note and other notes thereon, the Accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India; ¦

(i) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2012,

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

(Hi) In the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

(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) According to the information and explanations given to us, the Fixed Assets have been physically verified by the Management during the year and no material discrepancies have been noted.

(c) In our opinion and according to information and explanations given to us, the Company has not disposed off substantial part of fixed assets during the year.

(ii) In respect of its inventories:

(a) The inventory has been physically verified by the management at the end of the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of Inventories followed by the management are found reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to information and explanations given to us, the Company is maintaining proper records of Its inventories. The discrepancies noticed on verification, where physical verification has taken place, between the physical stocks and book records which are not material in relation to the Company, have been properly dealt with in the books of accounts as informed to us.

(iii) In respect of unsecured loans:

(a) During the year, the Company has taken Unsecured Loans from the Companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956 as explained to us. Maximum amount involved during the year was Rs. 236.82 lakhs from 5 parties. Yearend balance from such parties was Rs. 113.15 lakhs. The rate of interest and other terms & conditions are not prejudicial to the interest of the Company.

(b) As explained and informed to us, the Company has given unsecured loans to Companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Maximum amount involved during the year was Rs. 444.80 lakhs to 7 parties. Yearend balance from such parties was Rs. 93.61 lakhs. The terms and conditions are not prejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanations given to us, the Company has an adequate internal control procedure commensurate with its size and nature of its business, for the purchase of inventory, fixed assets and for purchase/sale of goods. During the course of our audit, we have not observed any major weakness in the internal control.

(v) In respect of the contracts or arrangement referred to in Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made during the year in pursuance of such contracts and arrangements exceeding value of Rupees five lakhs for each party, have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time except for certain transactions for sale of materials of sub-standard quality.

(vi) The Company has not accepted any deposits from the public during the year, which covered under section 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975.

(vii) In our opinion, the Company has an internal audit system, commensurate with the size and nature of its business. The coverage of Internal Audit should be enlarged.

(viii) We have broadly reviewed the cost records maintained by the Company relating to products of the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete,

(ix) In respect of Statutory dues:

(a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Service Tax, Sales Tax, Wealth Tax, Custom Duty, Excise-Duty, Cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable" in respect of aforesaid dues were outstanding, as at 31s1 March, 2012 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 statutory dues which have not been deposited on account of any dispute. (Please refer Annexure II)

(x) The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current and immediately preceding financial year.

(xi) On the basis of examination of records and according to the information and explanations given to us, there has not been any delay in repayment of dues to the banks by the Company. At the year end, there were no overdoes in repayments to banks.

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

(xiii) In our opinion the Company is not a Chit/nidhi/mutual benefit funds/society, therefore the provisions of clause 4(xiii) of the CARO, 2003 are not applicable to the Company.

(xiv) In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company

(xv) In our opinion and according to information and explanations given to us, the Company has given guarantee for loan taken by a corporate entity from a Bank. According to the information and explanation given to us, we are of the opinion that terms and conditions thereof are not prejudicial to the interest of the Company.

(xvi) On the basis of information and explanations provided to us, the term Loans have been applied for the purposes for which they were raised.

(xvii) According to the information and explanation given to us and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis have not been generally used for long-term investment.

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

(xix) As the Company has not issued any debentures, paragraph 4(xix) of the Order is not applicable.

(xx) During the year, since the Company has not raised money by way of public issue, paragraph 4(xx) of the Order is not applicable.

(xxi) To the best of our knowledge and according to information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

ANNEXURE-II (Rs, in lacs)

Nature of Dues Amount Period TO WHICH The Authority where the amount relates dispute is pending

Works Contract Tax 34.60 2004-05 D.C.(Appeal), Ahmadabad

RST & CST 43.64 2005-06 D.C.(Appeal), Bhilwara Entry Tax 3.90 2006-07 D.C.(Appeal), Bhilwara

Entry Tax 2.48 2007-08 D.C.(Appeal), Bhilwara

Entry Tax 3.15 2008-09 D.C.(Appeal), Bhilwara

RST & CST 45.79 2007-08 Appeal against Final Assessment pending in Rajasthan Tax Board, Ajmer and Revision against Provisional Assessment pending in Rajasthan High Court, Jodhpur

RST & CST 9.82 2008-09 Appeal against Provisional Assessment pending in Rajasthan High Court, Jodhpur and Revision against Final Assessment pending in D.C.(Appeal), Bhilwara.

RST & CST 64.44 2009-10 Rajasthan High Court, Jodhpur

Income Tax 12.05 2009-10 CIT (Appeal), Ajmer

Total 219.87



For AGIWAL & ASSOCIATES

(FRN-000181N)

Chartered Accountants



(D.C.Maheshwari)

New Delhi, 20th August, 2012 Partner

M. No. 009883

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