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Auditor Report of Archit Organosys Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of ARCHIT ORGANOSYS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31,2015, 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

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 provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making 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 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 operating 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 qualified audit opinion on financial statements.

Basis for Qualified Opinion

(i) The company had entered into derivative contract for sale of foreign currency with HDFC Bank Ltd. in financial year2008-2009 which has resulted into loss to the tune of Rs. 1,97,52,367/- against which the sum of Rs. 55,06,598/ - has already been paid to HDFC Bank Ltd. and charged to Statement of Profit and Loss in the aforesaid financial year. Consequent upon adjustment of fixed deposits amounting to Rs. 23,64,200/- against the balance loss of Rs.1,42,45,769/- the liability on account of aforesaid loss, as per bank statement provided up to 31st January, 2013 stands to Rs. 1,47,07,069/- including interest, which has not been provided for by the company. Such non provision of liability has resulted into non compliance of Accounting Standard 29 issued by Institute of Chartered Accountants of India and also resulted into understatement of current liabilities. Since the interest/charges, if any, for the period from 1St February, 2013 to 31st March, 2015 has not been intimated to company, the impact thereof on profit for the year under review could not be ascertained.

(ii) The company has not yet compiled the requisite information, related to suppliers who have registered themselves under the Micro, Small And Medium Enterprises Development Act, 2006. In the absence of relevant information the requisite disclosures are not made in the financial statements.

Had the observations made by us in Para (i) above been considered, there would have been loss for the year amounting to Rs. 67,51,340/- as against reported profit of Rs. 79,55,729 /-, current liabilities would have been Rs. 18,34,50,103/- as against reported current liabilities of Rs. 16,87,43,034/-.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matter described in the basis for Qualified Opinion paragraph, 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 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 of 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 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) Except for the matter described in the basis for Qualified Opinion paragraph, in our opinion, the aforesaid 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 31 March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 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 the Companies (Audit and Auditors) Rules, 2014 and to our best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer notes 30 to the financial statements.

(ii) The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.



ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in our Report of even date to the members of ARCHIT ORGANOSYS LIMITED)

(i) (a) The Company has not compiled fixed assets records to show full particulars, including quantitative details

and situation of fixed assets.

(b) We were informed that the fixed assets were not physically verified by the Management at reasonable intervals. Therefore we are unable to comment on material discrepancies if any.

(ii) (a) In our opinion, physical verification of inventory (excluding inventory lying with third parties) has been

conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management needs to be strengthened in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

(iii) The Company has not granted any loans, secured or unsecured to any companies, firms or other parties covered in the register maintained u/s. 189 of the Companies Act, 2013. Accordingly clause 3(iii)(a) and 3(iii)(b) of the order are not applicable.

(iv) In our opinion and according to information and explanation given to us; the internal control system needs to be strengthened so as to commensurate with the size of the Company and the nature of its business , with regard to purchase of inventory and fixed assets. However there is adequate internal control system with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

(v) The Company has not accepted any deposits as defined in The Companies (Acceptance of Deposits) Rules 2014. Accordingly, the provisions of Clause 3(v) of the Order are not applicable to the Company.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to rules made by the Central Government. We are of the opinion that prima facie the prescribed accounts and records have been maintained and being made. We have not, however, made a detailed examination of these records with a view to determine whether they are accurate or complete.

(vii) (a) According to the information given to us, the Company is generally regular in depositing with appropriate

authorities undisputed statutory dues and Company had no arrears of such outstanding statutory dues as at 31st March, 2015 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the Company has no disputed outstanding statutory dues as at to 31st March, 2015.

(c) According to the information and explanations given to us, there are no amounts which are required to be transferred to the Investor Education and Protection Fund by the Company.

(viii) The company does not have accumulated losses at year end. The company has not incurred any cash loss during the current financial year even after considering the effect of qualifications reported in Auditor''s Report. However, there would have been cash loss to the tune of Rs. 28,42,763/- in the immediately preceding year.

(ix) According to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks or debenture holders during the year.

(x) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xi) According to the information and explanation given to us the term loan has been applied for the purpose for which it was obtained.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under review.

For G. K. Choksi & Co. Chartered Accountants [Firm Registration No. 101895W]

(SANDIP PARIKH) Place: Ahmedabad Partner Date: 25th May, 2015 Membership No. 40727


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of ARCHIT ORGANOSYS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and 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.

Basis for Qualified Opinion

(i) The company had entered into derivative contract for sale of foreign currency with HDFC Bank Ltd. in financial year 2008-2009 which has resulted into loss to the tune ofRs. 1,97,52,367/- against which the sum of Rs. 55,06,598/- has already been paid to HDFC Bank Ltd. and charged to Statement of Profit and Loss in the aforesaid financial year. Consequent to adjustment of fixed deposits amounting to Rs. 23,64,200/- against the balance loss oft 1,42,45,769/- the liability on account of aforesaid loss stands reduced toRs. 1,47,07,069/- including interest which has not been provided for by the company. Such non provision of liability has resulted into non compliance of Accounting Standard 29 issued by Institute of Chartered Accountants of India and also resulted into understatement of current liabilities.

(ii) The company has not yet compiled the requisite information, related to suppliers who have registered themselves under the Micro, Small And Medium Enterprises Development Act, 2006. In the absence of relevant information the requisite disclosures are not made in the financial statements.

Had the observations made by us in Para (i) above been considered, the loss for the year would have been Rs. 96,05,866/- as against reported profit off. 51,01,203/-, current liabilities would have been Rs. 11,29,29,697/- as against reported current liabilities off 9,82,22,628/-.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the matter described in the basis for Qualified Opinion paragraph, 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, 2013;

(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) Except for the matter described in the basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956

(e) On the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March, 31, 2013, 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

(Referred to in our Report of even date to the members of ARCHIT ORGANOSYS LIMITED)

1 (a) The Company has not compiled fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that the fixed assets were not physically verified by the Management at the end of the year however the company has a regular programme of verification which in our opinion is reasonable having regard to the size of the company and nature of its business. Since the fixed assets records are still under compilation no comparison with the book records have yet been made. In the absence of such comparison opinion as to discrepancies if any can not be given.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory (excluding inventory lying with third parties) has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management needs to be strengthened in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) The Company has not granted any loans, secured or unsecured to any companies, firms or other parties covered in the register maintained u/s.301 of the Companies Act, 1956. Accordingly clause 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the order are not applicable. (b) i)The Company has taken interest free unsecured loans from five parties and interest bearing unsecured loan from one party covered in the register maintained u/s.301 of the Companies Act, 1956. The balance outstanding on account of these loans as at the end of the year was Rs. 2,42,70,000/- and the maximum balance outstanding during the year were Rs. 2,67,20,000/-

(ii) The terms and conditions of the above loans are prima facie not prejudicial to the interest of the Company.

(iii)As per the information and explanations given to us, principal amount and interest thereon has been repaid whenever they fall due for payment.

4 In our opinion and according to information and explanation given to us; the internal control system needs to be strengthened so as to commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets.. However there is adequate internal control system and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5 (a) According to information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act 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 such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the Act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8 "We have broadly reviewed the cost records maintained by 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 facia 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.

9 (a) In our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues and the company had no arrears of such outstanding dues as at 31st March, 2013 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the Company does not have any disputed outstanding statutory dues as at 31st March, 2013 except stated hereunder.

10 The company does not have accumulated losses at year end. However, had the effect of qualification reported in the basis for Qualified Opinion paragraph of Independent Auditor''s report been taken in to consideration, there would have been cash loss to the tune of Rs. 47,35,007/- for the year under review. Similarly, there would have been cash loss to the tune of Rs. 53,53,143/- in the immediately preceding year.

11 According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or bank.

12 As per the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/Societies are not applicable to the company.

14 According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

15 In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks and financial institutions during the year.

16 In our opinion and according to the information and explanations given to us, the term loan has been applied for the purpose for which it was obtained.

17 In our opinion and according to the information and explanations given to us, the Company has not used any funds, raised on short term basis, for long term investment.

18 The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the year under review.

20. The company has not raised any money by public issues during the year under review.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under review.

For G. K. Choksi & Co.

Chartered Accountants

Firm Registration No. 101895W

Place : Ahmadabad

Date: 18th May, 2013 (SANDIP PARIKH)

Partner Membership No.40727


Mar 31, 2012

1. We have audited the attached Balance Sheet of ARCHIT ORGANOSYS LIMITED [Formerly known as Shri Chlochem Limited] as at 31st March, 2012 and the related Statement of Profit and Loss and Cash Flow Statement of the company 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 misstatements. 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.

3. As required by the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Particular attention is drawn to the following.

(i) Note no. 2.26 of Notes forming part of accounts regarding non provision of option loss,though considered as contingent liability by management, amounting to Rs. 142.45 lacs and interest amounting to Rs. 62.31 lacs in respect of concluded derivative contracts resulting into understatement of loss by Rs. 204.76 lacs and understatement of current liabilities by like amount.

(ii) The company has not yet compiled the requisite information, related to suppliers who have registered themselves under the Micro, Small And Medium Enterprises Development Act, 2006. In the absence of relevant information the requisite disclosures are not made in the financial statements.

Had the observations made by us in Para 4(i) above been considered, the loss for the year would have been Rs.137.58 lacs as against reported profit of Rs. 67.18 lacs, current liabilities would have been Rs. 1749.19 lacs as against reported current liabilities of Rs. 1544.43 lacs.

5. Further to our comments in the Annexure referred at para 3 above, we report that:

a. We have obtained all the information and explanations, which, to the best of our knowledge and belief, were necessary for the purposes of our audit.

b. In our opinion, subject to matters stated 1 (a) and 1 (b) of annexure to the auditors' report below, proper books of account have been kept by the Company as required by law 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 sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representation received from the directors of the company as at 31st March, 2012 and taken on record by the board of directors, we report that none of the directors is disqualified from being appointed as director of company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to para 4 and 5(b) above, 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:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012

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 Cash Flow Statement, of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Re: ARCHIT ORGANOSYS LIMITED [Formerly known as Shri Chlochem Limited] Referred to in paragraph 3 of our report of even date,

1 (a) The Company has not compiled fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that the fixed assets were not physically verified by the Management at the end of the year however the company has a regular programme of verification which in our opinion is reasonable having regard to the size of the company and nature of its business. Since the fixed assets records are still under compilation no comparison with the book records have yet been made. In the absence of such comparison opinion as to discrepancies if any can not be given.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory (excluding inventory lying with third parties) has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management needs to be strengthened in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) The Company has not granted any loans, secured or unsecured to any companies, firms or other parties covered in the register maintained u/s.301 of the Companies Act, 1956.

Accordingly clause 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the order are not applicable.

(b) (i) The Company has taken interest free unsecured loans from three parties and interest bearing unsecured loan from one party covered in the register maintained u/s.301 of the Companies Act, 1956. The balance outstanding on account of these loans as at the end of the year was Rs. 241.41 lacs and the maximum balance outstanding during the year were Rs. 410.06 lacs.

(ii) The terms and conditions of the above loans are prima facie not prejudicial to the interest of the Company.

(iii)As per the information and explanations given to us, principal amount and interest thereon has been repaid whenever they fall due for payment.

4 In our opinion and according to information and explanation given to us; the internal control system needs to be strengthened so as to commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5 (a) According to information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the act 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 such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8 According to information and explanation given to us, the central government has not prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of activities carried out by the company

9 (a) In our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues and the company had no arrears of such outstanding dues as at 31st March, 2012 for a period more than six months from the date they became payable. (b) According to the information and explanations given to us, the Company does not have any disputed outstanding statutory dues as at 31st March, 2012 except stated hereunder.

Particular Amount (Rs.) Period to which Forum where dispute the amount relates is pending

Central Sales Tax 10,10,032 2006-2007 Joint Commissioner of Act, 1956 Commercial Tax (Appeal)

Gujarat Value Added 7,46,271 2006-2007 Joint Commissioner of

Tax Commercial Tax (Appeal)

10 The company does not have accumulated losses at year end. However, if had the effect of qualification reported at para 4 of Auditor's report been taken in to consideration, there would have been cash loss to the tune of Rs. 87.57 lacs for the year under review. Similarly, there would have been cash loss to the tune of Rs. 101.79 lacs in the immediately preceding year.

11 According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or bank.

12 As per the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/Societies are not applicable to the company.

14 According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

15 In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks and financial institutions during the year.

16 In our opinion and according to the information and explanations given to us, the term loan has been applied for the purpose for which it was obtained.

17 On the basis of an overall examination of the balance sheet of the company in our opinion and according to the information and explanations given to us, we report that company has utilised funds raised on short term basis for long term investments to the tune of Rs. 92.39 lacs (previous year Rs. NIL Lacs).

18 The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the year under review.

20. The company has not raised any money by public issues during the year under review.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under review.

For G. K. Choksi & Co. Chartered Accountants

Firm Registration No. 101895W Place : Ahmedabad Date: 29th May, 2012.

(SANDIP PARIKH)

Partner Membership No.40727


Mar 31, 2011

1. We have audited the attached Balance Sheet of Shri Chlochem Limited as at 31st March, 2011 and the related Profit and Loss Account and Cash Flow Statement of the company 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 generality accepted in India. These standards require that we pair and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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

3. As required by the Companies Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section 4A) of section 227 of the Companies Act. 4956, and on to basis of such checks as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on to matters specified in paragraph 4 and S of the said order.

4. Particular attention is drawn to the following.

(i) Note no. 2 of Schedule 14 regarding non provision of option loss, though considered as contingent liability by management amounting to Rs, 142.45 lacs and interest amounting to Rs. 45.21 lacs in respect of concluded derivative contracts resulting into understatement of loss by Rs. 187.66 lacs and understatement of current liabilities by like amount

(il) The company has not yet complied the requisite information, related to suppliers who have registered themselves under the Micro, Small And Medium Enterprises Development Act 2006. In the absence of relevant information the requisite disclosures are not made In the financial statements.

Had the observations made by us in Para 4(i) above been considered, the loss for would have been Rs. 156.23 lacs as against reported profit of Rs. 31.43 lacs current liabilities would have been Rs. 897.17 lacs as against reported current liabilities Rs. 709.51 lacs.

5. Further to our comments in the Annexure referred aJ para 3 above, we report that

a. We have obtained at 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, subject to matters stated 1(a) and 1(b) of annexure to the auditor's report below, proper books of account have been kept by the Company as required by law so far as appears from our examination of those books.

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

d. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the accounting standards referred to in sub-section (30) of Section 211 of the Companies Act, 1956.

e. On the basis of Mitten representation received from the directors of the company as at 31st March, 2011 and taken on record by the board of directors, we report that none of the directors is disqualified from being appointed as director of company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1950.

f. in our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to para 4 and 5(b) above, give the information required by the Companies Act, 1950 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, 2011

b. in the case of the Profit and Loss Account, of the profit for the year ended on that date and

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

ANNEXURE TO THE AUDITORS' REPORT

As: Shri Chiochem Limited Referred to in paragraph 3 of our report of even date,

1. (a) The Company has not compiled Fixed assets records to show fuH particulars including quantitative details and situation of fixed assets.

(b) We were Informed that the fixed assets were not physically verified by the Management at the end of the year however the company has a regular programme of verification which in our opinion Is reasonable having regard to the site of the company and nature of its business. Since he fixed assets records are still under compilation no comparison with the bock records have yet been made. In the absence of such comparison opinion as to discrepancies tf any can not be given.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory (excluding inventory lying with third parties) has boon conducted by the management at reasonable Intervals.

(b) In our opinion and according to the information and explanations given to us the procedure of physical verification of inventory followed by the management needs to be strengthened in relation to the size of the Company and the nature of Its business.

(c) On the basis of our, examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) The Company has not granted any loans, secured or unsecured to any companies, firms or other parties covered In the register maintained u/s.301 of the Companies Act. 1956. Accordingly clause 4(iii)(b), 4{iii)(c) and 4(iii)(d) of the order are not applicable. (b) (i) The Company has taken interest free unsecured loans tram three patty covered in the register maintained u/s301 of the Companies Act, lose. The balance outstanding on account of these loans as at the end of the year was Rs. 147.70 lacs and the maximum balance outstanding during the year were As. 25950 lacs. (ii) The terms and conditions of the above loans are prima facie not prejudicial to the Interest of the Company. (iii) As per the information and explanations given to us, principal amount and interest thereon has been repaid whenever they fall due for payment,

4 In cur opinion and according to information and explanation given to us; the internal control system needs to be strengthened so as to commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct weakness in the Internal controls.

5 a) According to information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the act have 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 such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(c) In our opinion and according to the information and explanations given to us The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business: 8. According to information and explanation given to us, the central government has not prescribed maintenance of cost records under section 209{1)(d) of the Companies Act, 1958 in respect of activities carried cut by the company

9 (a) In our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues and the company had no arrears of such outstanding dues as at 31 st March, 2011 or a period more than six months from the date they became payable. {b) According to the information and explanations given to us, the Company does not have any disputed outstanding statutory dues as at 31st March, 2011

10 The company does net have accumulated losses exceeding fifty percent of it's net worth. The company has incurred cash losses to the tune of Rs. 101.79 lacs during the year under review after considering the effect of qualifications referred to at para 4 of the Auditors Report, ft has incurred cash tosses to the tune of Rs. 96.06 in the immediate preceding period.

11 According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to financial in institutions or bank.

12 As per Hire Information and explanations given to us, the Company has not granted any loon or advance on the basis of security by way of pledge of shares, debentures and other securities,

13 The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/ Societies are not applicable to the company.

14 According to the Information explanation given to us, the company does not deal or trade in shares, securities, debentures and other Investments.

15 In our opinion and according to the information and explanation given to us. the company has not given any guarantee for loans taken by others from banks and financial institutions during the year.

16 In our opinion and according to the information and explanations given to us, the term HRA has been applied for the purpose for which it was obtained

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

18 The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the year under review,

20. The company has not raised any money by public Issues during the year under review.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under review.

For G. K. Choksl & Co. Chartered Accountants Firm Registration No. 101895W

(SANDIP PAR1KH)

Place : Ahmedabad Partner

Date : 20th May, 2011 Membership No. 40727


Mar 31, 2010

1. We have audited the attached Balance Sheet of Shri Chlochem Limited as at 31st March, 2010 and the related Profit and Loss Account and Cash Flow Statement of the company for the period ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatments. 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.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Particular attention is drawn to the following.

(i) Note no. 2 of Schedule 14 regarding non provision of option loss, though considered as contingent liability by management, amounting to Rs. 142.45 lacs and interest amounting to Rs. 28.12 lacs in respect of concluded derivative contracts resulting into understatement of loss by Rs. 170.57 lacs and understatement of current liabilities by like amount.

(ii) The company has not yet compiled the requisite information, related to suppliers who have registered themselves under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of relevant information the requisite disclosures are not made in the financial statements.

Had the observations made by us in Para 4 (i) above been considered, the loss for the year would have been Rs. 146.38 lacs as against reported profit of Rs. 24.19 lacs, current liabilities would have been Rs. 597.10 lacs as against reported current liabilities of Rs. 426.53 lacs.

5. Further to our comments in the Annexure referred at para 3 above, we report that:

a. We have obtained all the information and explanations, which, to the best of our knowledge and belief, were necessary for the purposes of our audit.

b. In our opinion, subject to matters stated 1(a) and 1(b) of annexure to the auditors report below, proper books of account have been kept by the Company as required by law so far as appears from our examination of those books.

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

d. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representation received from the directors of the company as at 31st March, 2010 and taken on record by the board of directors, we report that none of the directors is disqualified from being appointed as director of company under clause (g) of sub-section (1) of Section 274 of the Companies Act. 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to para 4 and 5(b) above, 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:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010

b. in the case of the Profit and Loss Account, of the loss for the period ended on that date and

c. in the case of Cash Flow Statement, of the Cash Flow for the period ended on that date.

ANNEXURE TO THE AUDITORS REPORT Re: Shri Chlochem Limited Referred to in paragraph 3 of our report of even date,

1 (a) The Company has not compiled fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that the fixed assets were not physically verified by the Management at the end of the period however the company has a regular programme of verification which in our opinion is reasonable having regard to the size of the company ana nature or its business. Since the fixed assets records are still under compilation no comparison with the book records have yet been made. In the absence of such comparison opinion as to discrepancies if any can not be given.

(c) The Company has not disposed of any substantial part of its fixed assets during the period as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory (excluding inventory lying with third parties) has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management needs to be strengthened in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) (i) As per the information and explanations given to us. the Company has granted interest free unsecured loan to two parties covered in the register maintained under section 301 of the Companies Act, 1956. The balance outstanding on account of this loan as at the end of the period was Rs. NIL lacs and the maximum balance outstanding during the period was Rs. 59.49 lacs.

(ii) In our opinion, the other terms and conditions of the above loan are prima facie, not prejudicial to the interest of the company.

(iii) As per the information and explanations given to us, there is no overdue amount as on the Balance Sheet date.

(b) (i) The Company has taken interest free unsecured loans from one party covered in the register maintained u/s.301 of the Companies Act, 1956. The balance outstanding on account of these loans as at the end of the period was Rs. 50 lacs and the maximum balance outstanding during the period were Rs. 50 lacs.

(ii) The terms and conditions of the above loans are prima facie not prejudicial to the interest of the Company.

(iii) As per the information and explanations given to us, principal amount and interest thereon has been repaid whenever they fall due for payment.

4 In our opinion and according to information and explanation given to us; the internal control system needs to be strengthened so as to commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any major weakness in the internal controls.

5 (a) According to information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the act 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 such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at me relevant time.

6 In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8 According to information and explanation given to us, the central government has not prescribed maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of activities carried out by the company

9 (a) In our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues and the company had no arrears of such outstanding dues as at 31st March, 2010 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the Company does not have any disputed outstanding statutory dues as at 31st March. 2010.

10. The company does not have accumulated losses exceeding fifty percent of its net worth. The company has incurred cash losses to the tune of Rs. 129.28 lacs during the period under review after considering the effect of qualifications referred to at para 4 of the Auditors Report. It has incurred cash losses to the tune of Rs. 192.81 in the immediate preceding period.

11. According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or bank.

12. As per the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/Societies are not applicable to the company.

14. According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks and financial institutions during the period.

16. In our opinion and according to the information and explanations given to us, the term loan has been applied for the purpose for which it was obtained.

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

18. The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the period under review.

20. The company has not raised any money by public issues during the period under review.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period under review.

FOR G. K. CHOKSI & CO.

Chartered Accountants

SANDIP A. PARIKH

Place : Ahmedabad. Partner

Date : 31st May, 2010 Membership No. 40727


Sep 30, 2009

1. We have audited the attached Balance Sheet of Shri Chlochem Limited as at 30st September, 2009 and the related Profit and Loss Account and Cash Flow Statement of the company for the period ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Particular attention is drawn to the following.

(i) Note no. 2 of Schedule 16 regarding non provision of option loss, though considered as contingent liability by management, amounting to Rs. 142.45 lacs and interest amounting to Rs. 15.42 lacs in respect of concluded derivative contracts resulting into understatement of loss by Rs. 157.87 lacs and understatement of current liabilities by like amount.

(ii) Note no. 3 of Schedule 16 regarding non confirmation of Fixed Deposits amounting to Rs. 8,00,000/- lacs and Rs. 9,00,000/- lacs aggregating Rs. 17,00,000/- already matured on 19/01/2009 and 03/06/2009 respectively, and non provision of interest thereon till the date of maturity amounting to Rs. 1.94 lacs.

Had the observations made by us in Para 4 above been considered, the loss for the year would have been Rs. 231.44 lacs as against reported loss of Rs. 75.51 lacs, current liabilities would have been Rs. 493.14 lacs as against reported current liabilities of Rs. 335.27 lacs and current assets would have been Rs. 1484.94 lacs against reported current assets of Rs. 1483.00 lacs.

5. Further to our comments in the Annexure referred at para 3 above, we report that:

a. We have obtained all the information and explanations, which, to the best of our knowledge and belief, were necessary for the purposes of our audit.

b. In our opinion, subject to matters stated 1(a) and 1(b) of annexure to the auditors report below, proper books of account have been kept by the Company as required by law so far as appears from our examination of those books.

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

d. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representation received from the directors of the company as at 30th September, 2009 and taken on record by the board of directors, we report that none of the directors is disqualified from being appointed as director of company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to para 4 and 5(b) above, 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:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 30th September, 2009

b. in the case of the Profit and Loss Account, of the loss for the period ended on that date and

c. in the case of Cash Flow Statement, of the Cash Flow for the period ended on that date.

ANNEXURE TO THE AUDITORS REPORT Re: Shri Chlochem Limited Referred to in paragraph 3 of our report of even date,

1 (a) The Company has not compiled fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that the fixed assets were not physically verified by the Management at the end of the period however the company has a regular programme of verification which in our opinion is reasonable having regard to the size of the company ana nature of its business. Since the fixed assets records are still under compilation no comparison with the book records have yet been made. In the absence of such comparison opinion as to discrepancies if any can not be given.

(c) The Company has not disposed of any substantial part of its fixed assets during the period as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory (excluding inventory lying with third parties) has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management needs to be strengthened in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) (i) As per the information and explanations given to us, the Company has granted interest free unsecured loan to two parties covered in the register maintained under section 301 of the Companies Act, 1956. The balance outstanding on account of this loan as at the end of the period was Rs. NIL lacs and the maximum balance outstanding during the period was Rs. 86.45 lacs.

(ii) In our opinion, the other terms and conditions of the above loan are prima facie, not prejudicial to the interest of the company.

(iii) As per the information and explanations given to us, there is no overdue amount as on the Balance Sheet date.

(b) (i) The Company has taken interest free unsecured. loans from one party covered in the register maintained u/s.301 or the Companies Act, 1956. The balance outstanding on account of these loans as at the end of the period was Rs. NIL and the maximum balance outstanding during the period were Rs. 135.39 lacs.

(ii) The terms and conditions of the above loans (which is interest free) are prima facie not prejudicial to the interest of the Company.

(iii) As per the information and explanations given to us, principal amount and interest thereon has been repaid whenever they fall due for payment.

4 In our opinion and according to information and explanation given to us; the internal control system needs to be strengthened so as to commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any major weakness in the internal controls system.

5 (a) According to information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the act 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 such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8 According to information and explanation given to us the central government has not prescribed maintenance of cost records-under section 209(1)(d) of the Companies Act, 1956 in respect of activities carried out by the company

9 (a) In our opinion, the Company is regular in depositing with appropriate authorities undisputed statutory dues and the company had no arrears of such outstanding dues as at 30th September, 2009 for a period more than six months from the date they became payable. (b) According to the information and explanations given to us, the Company does not have any disputed outstanding statutory dues as at 30th September, 2009.

10 The company have accumulated losses exceeding fifty percent of its net worth. The company has incurred cash losses to the tune of Rs. 192.81 lacs during the period under review after considering the effect of qualifications referred to at para 4 of the Auditors Report. However, it has not incurred cash losses in the immediate preceding year.

11 According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to financial institution or bank.

12 As per the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/Societies are not applicable to the company.

14 According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

15 In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks and financial institutions during the period.

16 In our opinion and according to the information and explanations given to us, the term loan has been applied for the purpose for which it was obtained.

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

18 The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the period under review.

20. The company has not raised any money by public issues during the period under review.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period under review.



FOR G. K. CHOKSI & CO.

Chartered Accountants

SANDIP A. PARIKH

Place : Ahmedabad. Partner

Date : 21st November, 2009 Membership No. 40727



 
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