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Auditor Report of Agarwal Industrial Corporation Ltd.

Mar 31, 2018

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying Standalone Ind AS financial statements of Agarwal Industrial Corporation Limited (“the Company”), which comprises the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (Including Other Comprehensive Income), the Cash Flow Statement and the Statement of Change in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

2. 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 standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income and cash flows and change in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under section 133 of the Act.

3. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting the 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

4. Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.

5. 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 thereunder.

6. We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

7. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS 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 accounting policies used and the reasonableness of the accounting estimates made by Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

Opinion

9. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs of the Company as at 31st March, 2018, and its profit, its cash flows and the change in equity for the year ended on that date.

Report on other Legal and Regulatory Requirements

10. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, 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” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

11. 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, the Cash Flow Statement and Statement of Change in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on 31st March, 2018, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018, from being appointed as a director in terms of Section 164(2) of the Act.

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 B”.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of 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 note no. 33 of its standalone Ind AS financial statements;

ii) The Company did not have any long-term contracts including derivatives 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.

Annexure A to Independent Auditor''s Report

Referred to as ''Annexure A'' in paragraph 10 of the Independent Auditors'' Report of even date to the members of Agarwal Industrial Corporation Limited on the standalone Ind AS financial statements for the year ended on 31st March, 2018, we report that:

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

(b) The fixed assets have been physically verified by the management during the year under a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No discrepancies were noticed on such verification.

(c) According to the information and the explanation given to us and the records examined by us, we report that the title deeds of immovable properties are held in the name of the Company as at the Balance Sheet date.

(ii) As explained to us, the inventories were physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) The Company has granted interest free unsecured loan to one body corporate being wholly owned subsidiary covered in the register maintained under section 189 of the Companies Act, 2013 (''the Act'').

(a) In respect of aforesaid loan granted, the terms and condition under which such loans are granted are not prejudicial to the interest of the company.

(b) In respect of aforesaid interest free long term loan granted to wholly owned subsidiary by the company, there is no schedule of repayment of principle.

(c) There are no overdue amounts for more than ninety days or more in respect of the loan granted to the body corporate listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

(v) In our opinion and according to the information given to us, the company has not accepted deposits and hence, compliance with the directives issued by Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under with regard to the deposits accepted is not applicable.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act in respect of Company''s products/services 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 or complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company is regular in depositing with appropriate authorities applicable undisputed statutory dues including employee state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax, cess.

(b) According to the information and explanation given to us, no undisputed amounts payable in respect of employee state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax or cess were in arrears as at 31st March, 2018 for a period of more than six months from the date they became payable.

(c) According to the information and explanation given to us, details of employee state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax or cess which have not been deposited as on 31st March, 2018 on account of any dispute are as given below:

Name of Statute

Nature of the dues

Unpaid disputed Amount (in Lacs)

Period for which the amount relates

Forum where dispute is pending

The Karnataka Tax on Entry of Goods Act, 1979

Tax on Entry of Goods

39.75

April 2011 to March 2012

The Tribunal has decided the Appeal partially in favor of Company. Final demand notice is not yet received from assessing officer.

The Karnataka Value Added Tax, 2003

Sales Tax Demand

0.97

April 2011 to March 2012

The Karnataka Tax on Entry of Goods Act, 1979

Tax on Entry of Goods Demand

15.49

April 2012 to March 2016

JCCT Appeal

Custom Act

Penalty under the Custom Act

6.48

April 2013 to March 2014

CESAT Appellate Tribunal

The Income Tax Act, 1961

Income Tax Demand

20.25

A.Y. 2003-04

Rectification pending before Assessing Officer

The Income Tax Act, 1961

Income Tax Demand

17.50

A.Y. 2004-05

Rectification pending before Assessing Officer

The Income Tax Act, 1961

Assessment Dues

4.97

A.Y. 2008-09

Commissioner of Income Tax (Appeal)

The Income Tax Act, 1961

Assessment Dues

23.61

A.Y. 2009-10

--do—

The Income Tax Act, 1961

Assessment Dues

24.89

A.Y. 2010-11

--do—

The Income Tax Act, 1961

Assessment Dues

37.56

A.Y. 2011-12

--do—

The Income Tax Act, 1961

Assessment Dues

35.43

A.Y. 2013-14

--do—

The Income Tax Act, 1961

Assessment Dues

22.39

A.Y. 2014-15

--do—

The Income Tax Act, 1961

Income Tax Demand

147.19

A.Y. 2016-17

Rectification pending before Assessing Officer

Central Excise Act

Excise Duty Demand

6.78

April 2007 to March 2011

CESAT Appellate Tribunal

--do--

--do--

3.02

April 2011 to March 2015

--do—

--do--

Penalty under Central Excise

1.63

April 2011 to March 2015

--do—

Service Tax

Service Tax Demand

12.92

April 2010 to March 2015

Commissioner of Service tax (Appeal)

Local Body Tax

LBT Demand

11.29

Jan to March 2017

In response to Writ Petition filed, the Hon. High Court have stayed the Demand.

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

(ix) The Company has not raise any money by way of initial public offer or further public offer (including debt instruments) or term loans during the year; hence clause 3(ix) of the Companies (Auditors'' Report) Order, 2016 are not applicable to the Company.

(x) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

(xi) According to the information and explanation give to us and based on our examination of the records of the Company, the company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with the Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company; hence clause 3(xii) of the Companies (Auditors'' Report) Order, 2016 is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with the sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the standalone Ind AS financial statements in note no 41 as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosure specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rule, 2014.

(xiv) The Company has, during the year made preferential allotment of equity shares by conversion of warrants issued during the previous year and current year, after complying with the requirements of section 42 of the Companies Act, 2013 and the amount raised have been used for the purpose for which the funds were raised.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with the directors or the persons connected to its directors; hence clause 3(xv) of the Companies (Auditors'' Report) Order, 2016 is not applicable to the Company.

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

Annexure B to Independent Auditor''s Report

Referred to as ''Annexure B'' in paragraph 11(f) of the Independent Auditors'' Report of even date to the members of Agarwal Industrial Corporation Limited on the standalone Ind AS financial statements for the year ended on 31st March, 2018.

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

1. We have audited the internal financial controls over financial reporting of Agarwal Industrial Corporation Limited (“the Company”) as on 31st March, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended and as on that date.

Management''s Responsibility for Internal Financial Controls

2. 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 (“the Guidance Note”). 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 Act.

Auditors'' Responsibility

3. 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 and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls over financial reporting. Those Standards and the Guidance Note require that we comply with the 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.

4. 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 standalone Ind AS financial statements, whether due to fraud or error.

5. 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

6. 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 standalone Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the standalone Ind AS financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

7. 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

8. 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 31st March 2018, 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.

For Ladha Singhal & Associates

Chartered Accountants

(Firm Registration No. 120241W)

Ajay Singhal

(Partner)

M. No. 104451

Place: Mumbai

Dated: 30th May 2018


Mar 31, 2015

We have audited the accompanying standalone financial statements of Agarwal Industrial Corporation Limited ("the company"), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone 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 standalone 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding the assets of the Company and for preventing and detecting the 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 control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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 true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operative effectiveness of such control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") 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 statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. 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 Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the directors as on 31st March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of 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 does not have any pending litigations which would materially impact its financial position;

ii) The Company did not have any long-term contracts including derivatives 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.

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT

Referred to as Annexure in our Independent Auditors' Report of even date to the members of Agarwal Industrial Corporation Limited on the standalone financial statement for the year ended 31st March 2015, we report that:

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

(b) The fixed assets have been physically verified by the management during the year under a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

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

(b) The procedures of physical verification of inventory followed by the management 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The Company has granted interest free unsecured loan to one body corporate being wholly owned subsidiary covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act').

(b) In the case of the loans granted to the body corporate, the terms of arrangements do not stipulate any repayment schedule and the loans are repayable on demand.

(c) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to the body corporate listed in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and Services. Further on the basis of our examination of books and records of the company, and according to information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in internal controls.

(v) In our opinion and according to the information given to us, the company has not accepted deposits and hence, compliance with the directives issued by Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under with regard to the deposits accepted is not applicable.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act in respect of Company's products/ services 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 or complete.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the company is regular in depositing with appropriate authorities applicable undisputed statutory dues including employee state insurance, income tax, sales tax, wealth tax, service tax, duty of custom, duty of excise, value added tax, cess.

According to the information and explanation given to us, no undisputed amounts payable in respect of income tax, sales tax, wealth tax, service tax, duty of custom, duty of excise, value added tax or cess were in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, details of income tax, sales tax, wealth tax, service tax, duty of custom, duty of excise, value added tax or cess which have not been deposited as on 31st March, 2015 on account of any dispute are as given below:

Name of Nature of the Unpaid Statute dues disputed Amount (in Lacs)

The Karnataka Tax Tax on Entry of 39.75 on Entry of Goods Goods Act, 1979

The Karnataka Sales Tax 0.97 Value Added Demand Tax, 2003

Central Sales Sales Tax 0.93 Tax, 1956 Demand

The Karnataka Tax Tax on Entry of 38.35 on Entry of Goods Goods Demand Act, 1979

Custom Act Penalty under the 6.48 Custom Act

Income Tax Act Income Tax Demand 20.25

Income Tax Act Income Tax Demand 17.50

Name of Period for Forum where Statute which the dispute is amount relates pending

The Karnataka Tax April 2011 to JCCT Appeal on Entry of Goods March 2012 Act, 1979

The Karnataka April 2011 to JCCT Appeal Value Added March 2012 Tax, 2003

Central Sales April 2010 to JCCT Appeal Tax, 1956 March 2011

The Karnataka Tax April 2010 to JCCT Appeal on Entry of Goods March 2011 Act, 1979

Custom Act April 2013 to CESAT Appellate March 2014 Tribunal

Income Tax Act A.Y. 2003-04 Rectification

Income Tax Act A.Y. 2004-05 Rectification

(c) According to the information and explanation given to us, there were no any amount which were required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act,1956 (1 of 1956) and rules made thereunder.

(viii) In our opinion, the company does not have accumulated losses at the end of the financial year and have not incurred cash losses during the financial year and during the immediately preceding financial year.

(ix) In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to any financial institution or bank. The Company did not have any outstanding debentures during the year.

(x) As informed to us, the company has not given guarantees for loans taken by others from banks or financial institutions.

(xi) The term loans were applied for the purpose for which the loans were obtained by the company.

(xii) According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of our audit

For Ladha Singhal & Associates Chartered Accountants (Firm Registration No. 120241W)

Ajay Singhal Place : Mumbai (Partner) Dated : 30th May 2015 M. No. 104451


Mar 31, 2014

We have audited the accompanying financial statements of Agarwal Industrial Corporation Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2014;

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

(c) in the case of the Cash Flow Statement, of the cash flows 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 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 and 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 and Loss and Cash Flow Statement comply with the Accounting Standards referred 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 March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE AUDITORS'' REPORT

The Annexure referred to in our report to the members of Agarwal Industrial Corporation Limited ("the Company") for the year ended 31st March, 2014. We report that:

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

(b) The assets have been physically verified by the management during the year under a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the company has not disposed off a major part of the plant and machinery and as such the going concern status of the company is not affected.

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

(b) The procedures of physical verification of inventory followed by the management 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The company has granted interest free unsecured loan to wholly owned subsidiary covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.121 Lacs and the year-end balance of loan granted to such party was Rs. 121 Lacs.

(b) The other terms and conditions of such loan are not prime facie prejudicial to the interest of the company.

(c) The loan granted is repayable on demand and have been repaid as and when demanded back.

(d) There is no overdue amount of loan granted to the subsidiary company listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company has not taken any loans, secured or unsecured, from companies, firms or other parties listed 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 procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and Services. Further on the basis of our examination of books and records of the company, and according to information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in internal controls.

(v) (a) According to the information and explanation 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 explanation given to us, the transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information explanations given to us, the company has not accepted any deposits from public within the meaning of section sections 58A and 58AA of the Companies Act, 1956 and rules framed there under.

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

(viii) We have broadly reviewed the books of accounts 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 Act in respect of Company''s products/services 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 or complete.

(ix) (a) The company is regular in depositing the undisputed statutory dues including Investor Education Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other material statutory dues applicable to it with the appropriate authority.

(b) According to the information and explanation giving to us no undisputed amount payable in respect of above were in arrears, as at 31st March, 2014 for a period of more than six months from the date they become payable.

(c) According to the information and explanation given to us, details of sales tax, income tax, custom duty, wealth tax, service tax, excise duty, cess which have not been deposited as on 31st March, 2014 on account of any dispute are given below:

Excise Duty, Cess, Which have not been deposited an account of disputes and the forum where the dispute is pending are as under :

Name of Nature of the Unpaid Period for Statute dues disputed Amount which the (in Lacs) amount relates

The Karnataka Tax Tax on Entry of 39.75 April 2011 to on Entry of Goods Goods March 2012 Act, 1979

The Karnataka Sales Tax 0.97 April 2011 to Value Added Demand March 2012 Tax, 2003

Central Sales Sales Tax 0.93 April 2010 to Tax, 1956 Demand March 2011

The Karnataka Tax Tax on Entry of 38.35 April 2010 to on Entry of Goods Goods Demand March 2011 Act, 1979

Income Tax Act Income Tax Demand 20.25 A.Y 2003-04

Income Tax Act Income Tax Demand 17.50 A.Y. 2004-05



Name of Statute Forum where dispute is pending

The Karnataka Tax JCCT Appeal on Entry of Goods JCCT Appeal Act, 1979

The Karnataka JCCT Appeal Value Added Tax, 2003

Central Sales JCCT Appeal

The Karnataka Tax JCCT Appeal on Entry of Goods Act, 1979

Income Tax Act Rectification

Income Tax Act Rectification

(x) The company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to a financial institution or bank. The Company has not obtained any borrowing by way of debentures.

(xii) The company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statute applicable to chit fund or nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) The company is not a dealer or trader in shares, securities, debentures and other investments.

(xv) As informed to us the company has not given guarantees for loans taken by others from banks or financial institutions during the year.

(xvi) In our opinion and according to information given to us, the company has applied the term loan for the purpose for which the loans were obtained.

(xvii) On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanation given to us, the Company has not prima-facie used the funds raised on short-term basis for long-term investment.

(xviii) The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act during the year.

(xix) The Company has not issued any debentures during the year.

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

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanation given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

For Ladha Singhal & Associates Chartered Accountants (Firm Registration No. 120241W) Ajay Singhal Place: Mumbai (Partner) Dated: 30th May 2014. M. No. 104451


Mar 31, 2013

1 We have audited the attached Balancesheet of Agarwal Industrial Corporation Limited (the Company) asat 31st March, 2013, and also the Profit and Loss account and the 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 planand perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principle sused and significant estimates made by the management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditors'' Report) Order, 2003 (CARO) issued by the Central Government of India interms of Section 227(4A) of the Companies Act,1956, we enclosed 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 paragraphs 3 above, were port 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 the audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company, so far as it appears from our examination of these books;

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

d) In our opinion, the Balance sheet and Profit & Loss Account and cashflow statement dealt with by this report comply with the Accounting Standards referred in sub-section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors of the Companies as at 31st March 2013, and taken on record by the Board of Directors, were port that no director is disqualified as on 31st March 2013 from being appointed as a Director interms of clause(g) of sub-section(1) of section 274 of the Companies Act,1956; and

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manners so required 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, 2013.

(ii) In the case of the Profit & Loss Account, 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.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph 3 of our Report of even date)

1. Fixed Assets :

a) The Company has maintained proper records showing full particulars, including quantitative details and situations offixed assets.

b) Fixed assets are physically verified by the management at reasonable intervals having regard to size of the company and nature of it sassets. No material discrepancies were noticed during such verification during year.

c) The company has not disposed off any part offixed assets during the year and accordingly going concern is not affected.

2. Inventories :

a) As explained to us, physical verification of inventory was carried out at reasonable intervals by the management.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management, are reasonable and adequate, in relation to size of the company and the nature of its business.

c) In our opinion, and according to the information and explanation given to us, the company has maintained proper records of its inventory, and the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt within the books of account.

3. Loans & Advances :

(a) According to the Information and explanations given to us, the company has granted loans to one subsidiary covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 100 Lacs and the year-end balance of loans granted to such party was Rs. 100 Lac.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prime facie prejudicial to the interest of the company.

(c) The loans granted are either re-payable on demand or after the stipulated period of time.

(d) There is no overdue amount of loans granted to the subsidiary company listed in the register maintained under section 301 of the Companies Act 1956.

(e) According to the Information and explanations given to us, the company has taken interest free, unsecured loan from parties covered in the register maintained under section 301 of the Companies Act 1956 which has repaid during the year. The maximum amount outstanding during the year is Rs. 913.45 Lacs and outstanding balance at year end is Nil.

4. Internal Controls :

In our opinion and according to the information and explanations given to us, the internal control system needs to be strengthened with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services, during the course of Audit, no major weakness has been noticed in the internal controls.

5. Contracts & Arrangements with parties Covered under Section 301 of the Act :

a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions made inpursuance of contracts and arrangements entered in the register maintained under section 301of the Companies Act,1956 and exceeding the value of Rs. 5 Lacs in respec to fany party during the year, have been made at prices which is prima facie reasonable having regard to prevailing market prices at the relevant time.

6. Deposits :

According to the information and explanations given to us the company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA of the Companies Act,1956 and the rules framed therein.

7. Internal Audit System :

In our opinion, the internal audit functions carried out during the year by a firm Chartered Accountants appointed by the management have been commensurate with the size of the Company and nature of its business.

8. Cost Records :

We have broadly reviewed the books of accounts maintained by Company in respect of product, where pursuant to the rule made by the Central Government of India, the maintenance of cost records has been prescribed under section 209(1)(d) of the Companies Act 1956 and are of the opinion that, primafacie, the prescribed records have been maintained. We have not, however made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. Statutory Dues :

a) According to records of the Company and information and explanation given to us the company has been regular depositing undisputed statutory dues including Income-tax, Sales Tax, Custom Duty, Excise Duty, cess and other material statutory dues applicable to it with appropriate authorities during the year. According to the information and explanation giving to us no undisputed amount payable in respect of above were in arrears, as at 31st March, 2013 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 were no dues of sales tax, Income Tax / Customs Duty / Wealth Tax / Exciseduty / Cess which have not been deposited by the Company on account any dispute.

c) According to the records of the company, the dues of sales tax, Income-Tax, Customs, Wealth-Tax, Service Tax,

Excise Duty, Cess, Which have not been deposited an account of disputes and the forum where the dispute is pending are as under :

Sr. No. Nature of the Statute Nature of the Dues Amount Pending Forum Where (Rs. in Lacs)

Dispute is pending

1. Income Tax Act Income Tax Demand 20.25 Rectification

(Ass. Year 2003-04)

2. Income Tax Act Income Tax Demand 17.50 Rectification

(Ass.Year 2004-05)

Other Matters :

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and immediately preceding financial year.

11. On the basis of our examination and according to the information and explanation given to us, the company has not defaulted in repayment of dues to any bank or financial institution. The Company has not obtained any borrowing buy way of debentures.

12. Based on our examination of records & the information and explanation given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the company is not a chitfund or anidhi/mutualbenefitfund/society. Therefore, the Provision of clause 4(xiii) of the order are not applicable.

14. In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provision of clause 4(XIV) of the Order relating to maintenance of proper records, timely entries and holding investment in own name are not applicable.

15. According to the information and explanation given to us and examined by us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanation given to us, the company has applied the term loans for the purpose for which they were obtained.

17. In our opinion, and on the basis of our examination and according to the information and explanation given to us, and on an overall examination of the balance sheet of the Company, were port that the company has not, primafacie used the funds borrowed on short term basis during the year for long term investment and viceversa.

18. In our opinion considering the nature of activities carried on by the company during the year, the provision of any special statute applicable to chit fund! nidhi/mutual benefit fund! societies are not applicable to it.

19. On the basis of san overall examination of the balance sheet of the company, in our opinion and according to the information and explanation given to us, there are no funds on short terms basis which have been used for long term investment.

20. The company has not made any preferential allotment of shares or issued debentures or public issue during the year and according clauses (xviii), (xix) and (xx) of the order are not applicable.

21. To the best of our knowledge and belief and according to information and explanations given to us, there have been no casesof fraud on or by the company noticed or reported during the year.



For RASHMI AGRAWAL

Chartered Accountants





RASHMI AGRAWAL

Place : Mumbai Proprietor

Date : 30/05/2013 M.B. No. 104517


Mar 31, 2012

1 We have audited the attached Balance sheet of Agarwal Industrial Corporation Limited (the Company) as at 31st March, 2012, and also the Profit and Loss account and the 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 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 statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditors' Report) Order, 2003 (CARO) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclosed 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 paragraphs 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 the audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company, so far as it appears from our examination of these books;

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

d) In our opinion, the Balance sheet and Profit & Loss Account and cash flow statement dealt with by this report comply with the Accounting Standards referred in sub-section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors of the Companies as at 31st March 2012, and taken on record by the Board of Directors, we report that no director is disqualified as on 31st March 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; and

f) In our opinion and to the best of our information and according to the explanations given to us, the said 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 the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2012.

(ii) In the case of the Profit & Loss Account, 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.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 3 of our Report of even date)

1. Fixed Assets :

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

b) Fixed assets are physically verified by the management at reasonable intervals having regard to size of the company and nature of its assets. No material discrepancies were noticed during such verification during year.

c) The company has not disposed off any part of fixed assets during the year and accordingly going concern is not affected.

2. Inventories :

a) As explained to us, physical verification of inventory was carried out at reasonable intervals by the management.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management, are reasonable and adequate, in relation to size of the company and the nature of its business.

a) In our opinion, and according to the information and explanation given to us, the company has maintained proper records of its inventory, and the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3. Loans & Advances :

(a) According to the Information and explanations given to us, the company has taken interest free, unsecured loan from Parties covered in the register maintained under section 301 of the Companies Act, 1956 which is repayable on demand. The maximum amount outstanding during the year is ' 1371.05 Lacs & outstanding balance at year end is ' 913.45 Lacs.

(b) The terms and conditions of loan taken by the company are prime facie not prejudicial to the interest of the company.

(c) The payments term of the principles amount has been started.

4. Internal Controls :

In our opinion and according to the information and explanations given to us, the internal control system needs to be strengthened with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services, during the course of Audit, no major weakness has been noticed in the internal controls.

5. Contracts & Arrangements with parties Covered under section 301 of the Act :

a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of ' 5 Lacs in respect of any party during the year, have been made at prices which is prima facie reasonable having regard to prevailing market prices at the relevant time.

6. Deposits :

According to the information and explanations given to us the company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed therein.

7. Internal Audit System :

In our opinion, the internal audit functions carried out during the year by a firm Chartered Accountants appointed by the management have been commensurate with the size of the Company and nature of its business.

8. Cost records :

We have broadly reviewed the books of accounts maintained by Company in respect of product, where pursuant to the rule made by the Central Government of India the maintenance of cost records has been prescribed under section 209(1)(d) of the Companies Act 1956 and are of the opinion that, prima facie, the prescribed records have been maintained. We have not, however made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. Statutory Dues :

a) According to records of the company and information and explanation given to us the company has been regular depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, cess and other material statutory dues applicable to it with appropriate authorities during the year. According to the information and explanation giving to us no undisputed amount payable in respect of above 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 were no dues of sales tax, Income Tax / Customs Duty / Wealth Tax / Excise duty/Cess which have not been deposited by the company on account any dispute.

c) According to the records of the company, the dues of sales tax, Income-Tax, Customs, Wealth-Tax, Service Tax, Excise Duty, Cess, Which have not been deposited an account of disputes and the forum where the dispute is pending are as under:

Sr. No. Nature of the Statute Nature of the Dues Amount Pending Forum Where (Rs. in Lacs) Dispute is pending 1. Income Tax Act Income Tax Demand 20.25 Rectification (Ass. Year 2003-04)

2. Income Tax Act Income Tax Demand 17.50 Rectification (Ass. Year 2004-05)

Other Matters :

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and immediately preceding financial year.

11. On the basis of our examination and according to the information and explanation given to us, the company has not defaulted in repayment of dues to any bank or financial institution .The Company has not obtained any borrowing buy way of debentures.

12. Based on our examination of records & the information and explanation given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the Provision of clause 4(xiii) of the order are not applicable.

14. In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provision of clause 4 (XIV) of the Order relating to maintenance of proper records, timely entries and holding investment in own name are not applicable.

15. According to the information and explanation given to us and examined by us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanation given to us, the company has applied the term loans for the purpose for which they were obtained.

17. In our opinion, and on the basis of our examination and according to the information and explanation given to us, and on an overall examination of the balance sheet of the Company, we report that the company has not, prima facie used the funds borrowed on short term basis during the year for long term investment and vice versa.

18. In our opinion considering the nature of activities carried on by the company during the year, the provision of any special statute applicable to chit fund! nidhi/mutual benefit fund! societies are not applicable to it.

19. On the basis of san overall examination of the balance sheet of the company, in our opinion and according to the information and explanation given to us, there are no funds on short terms basis which have been used for long term investment.

20. The company has not made any preferential allotment of shares or issued debentures or public issue during the year and according clauses (xviii),(xix) and (xx) of the order are not applicable.

21. To the best of our knowledge and belief and according to information and explanations given to us, there have been no cases of fraud on or by the company noticed or reported during the year.

For RASHMI AGRAWAL

Chartered Accountants

RASHMI AGRAWAL

Place: Mumbai Proprietor

Date : 27/08/2012 M.B. No.104517


Mar 31, 2011

1 We have audited the attached Balance sheet of Agarwal Industrial Corporation Limited (the Company) as at 31st March, 2011, and also the Profit and Loss account and the 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 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 statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3 As required by the Companies (Auditors' Report) Order, 2003 (CARO) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we enclosed 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 paragraphs 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 the audit;

b) In our opinion, proper books of accounts as required by law have been kept by the Company, so far as it appears from our examination of these books;

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

d) In our opinion, the Balance sheet and Profit & Loss Account and cash flow statement dealt with by this report comply with the Accounting Standards referred in sub-section (3C) of section 211 of the Companies Act, 1956.

e) On the basis of written representations received from the directors of the Companies as at 31st March 2011, and taken on record by the Board of Directors, we report that no director is 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; and

f) In our opinion and to the best of our information and according to the explanations given to us, the said 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 the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2011.

(ii) In the case of the Profit & Loss Account, 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.

5 On the basis of the written representation received from the Directors as on March 31, 2011 taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 3 of our Report of even date)

1. Fixed Assets :

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

b) Fixed assets are physically verified by the management at reasonable intervals having regard to size of the company and nature of its assets. No material discrepancies were noticed during such verification during year.

c) The Company has not disposed off any part of fixed assets during the year and accordingly going concern is not affected.

2. Inventories :

a) As explained to us, physical verification of inventory was carried out at reasonable intervals by the management.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the management, are reasonable and adequate, in relation to size of the company and the nature of its business.

b) In our opinion, and according to the information and explanation given to us, the company has maintained proper records of its inventory, and the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the books of account.

3. Loans & Advances :

(a) According to the Information and explanations given to us, the company has taken interest free, unsecured loan from Parties covered in the register maintained under section 301 of the Companies Act, 1956 which is repayable on demand. The maximum amount outstanding during the year is Rs.10.16 Crores & outstanding balance at year end is Rs. Rs.10.16 Crores.

(b) The terms and conditions of loan taken by the company are prime facie not prejudicial to the interest of the company.

(c) The payments term of the principles amount has not been started yet.

4. Internal Controls :

In our opinion and according to the information and explanations given to us, the internal control system needs to be strengthened with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services, during the course of Audit, no major weakness has been noticed in the internal controls.

5. Contracts & Arrangements with parties Covered under section 301 of the Act :

a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5 Lacs in respect of any party during the year, have been made at prices which is prima facie reasonable having regard to prevailing market prices at the relevant time.

6. Deposits :

According to the information and explanations given to us the company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA of the Companies Act, 1956 and the rules framed therein.

7. Internal Audit System :

In our opinion, the internal audit functions carried out during the year by a firm Chartered Accountants appointed by the management have been commensurate with the size of the Company and nature of its business.

8. Cost records :

As explained to us the Central Government has not prescribed maintenance of cost records under section 209(1) (d) of the Companies Act,1956, for any of the products of the company.

9. Statutory Dues :

a) According to records of the company and information and explanation given to us the company has been regular depositing undisputed statutory dues including Income-tax, Sales Tax, Excise Duty, cess and other material statutory dues applicable to it with appropriate authorities during the year. According to the information and explanation giving to us no undisputed amount payable in respect of above were in arrears, as at 31st March, 2010 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 were no dues of sales tax, Income Tax/Excise Duty/ Cess which have not been deposited by the company on account any dispute.

c) According to the records of the company, the dues of sales tax, Income-Tax, Service Tax, Excise Duty, Cess, Which have not been deposited an account of disputes and the forum where the dispute is pending are as under:

Sr. No. Nature of the Statute Nature of the Dues Amount Pending Forum Where (Rs in Lacs) Dispute is pending

1. Income Tax Act Income Tax Demand 20.25 Rectification (Ass. Year 2003-04)

2. Income Tax Act Income Tax Demand 17.50 Rectification (Ass. Year 2004-05)

Other Matters :

10. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and immediately preceding financial year.

11. On the basis of our examination and according to the information and explanation given to us, the company has not defaulted in repayment of dues to any bank or financial institution .The Company has not obtained any borrowing buy way of debentures.

12. Based on our examination of records & the information and explanation given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the Provision of clause 4(xiii) of the order are not applicable.

14. In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provision of clause 4 (XIV) of the Order relating to maintenance of proper records, timely entries and holding investment in own name are not applicable.

15. According to the information and explanation given to us and examined by us, the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanation given to us, the company has applied the term loans for the purpose for which they were obtained.

17. In our opinion, and on the basis of our examination and according to the information and explanation given to us, and on an overall examination of the balance sheet of the Company, we report that the company has not, prima facie used the funds borrowed on short term basis during the year for long term investment and vice versa.

18. In our opinion considering the nature of activities carried on by the company during the year, the provision of any special statute applicable to chit fund! nidhi/mutual benefit fund! societies are not applicable to it.

19. On the basis of san overall examination of the balance sheet of the company, in our opinion and according to the information and explanation given to us, there are no funds on short terms basis which have been used for long term investment.

20. The company has not made any preferential allotment of shares or issued debentures or public issue during the year and according clauses (xviii),(xix) and (xx) of the order are not applicable.

21. To the best of our knowledge and belief and according to information and explanations given to us, there have been no cases of fraud on or by the company noticed or reported during the year.

For RASHMI AGARWAL

Chartered Accountants

RASHMI AGARWAL

Place: Mumbai Proprietor

Date : 25/08/2011 M.B. No.104517

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