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Auditor Report of Ashima Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of Ashima Limited ('the Company') which comprise the Balance Sheet as at 31st 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 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

9. As required by the 'the Companies (Audit Report) Order 2015', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (herein after referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraph 3 and 4 of the order.

10. 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 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 it appears from our examination of those books.

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

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards 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, and 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 the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The company has disclosed the impact of pending litigations as at March 31, 2015 on its financial position in its financial statements - Refer Note 27 and 28 of the financial statements.

ii. The company has made provisions as at March 31, 2015, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company during the year ended March 31,2015.

Referred to in paragraph 9 of the Independent Auditor's Report of even date to the members of Ashima Limited on the financial statements as of and for the year ended 31st March, 2015

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

(b) All fixed assets have been physically verified by the management at reasonable intervals. In our opinion, the program of verification is reasonable having regard to the size of the company and the nature of its assets. We have been informed that no material discrepancies were noticed on such verification.

2. (a) As explained to us, the inventories have been physically verified during the year by the management

except inventories lying with third parties (other than stock lying with Ashima Dyecot Ltd.) which have been confirmed and stock in transit which have been subsequently received. In our opinion, the frequency of verification is reasonable

(b) As explained to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, we are of the opinion that, the company is maintaining proper records of inventory. Discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with in the books of account.

3. As per explanation given to us, the company has not granted any loan to a company covered in the register maintained under section 189 of the Companies Act, 2013, hence clause 3 (a) and (b) is not applicable.

4. In our opinion and according to the information and explanation 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 purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls.

5. In our opinion and according to the information and explanations given to us, the company has not accepted any fixed deposits within the meaning of Section 73 and 74 of the Act from the public. Further, no order has been passed by the Company Law Board.

6. We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employee's state insurance, income tax, sales tax, wealth tax, duty of custom, service tax, duty of excise, value added tax cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employee's state insurance, income tax, sales tax, wealth tax, duty of custom, service tax, duty of excise, value added tax cess and other material statutory dues applicable to it 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 explanations given to us, the details of disputed statutory dues which are disputed as follow.

Sr. Nature of Statute Nature of Amount No. Dues (Rs. in Lacs)

1 Foreign Trade (Dev.& Custom Duty 60.89 Regu. Act), 1992 and Interest

2 The Income Tax Act, Income tax 41.04 1961

3 The Income Tax Act, Income tax 676.66 1961

4 The Income Tax Act, Income tax 0.87 1961

5 Gujarat Sales Tax Act, Sales Tax 1,906.01 1969

6 Gujarat Value Added VAT 1.45 Tax Act, 2003

7 Gujarat Value Added VAT 6.48 Tax Act, 2003

8 Employees' State ESI 77.82 Insurance Act, 1948 Contribution

Sr. Nature of Statute Period to which Forum where dispute No. the amount is pending relates

1 Foreign Trade (Dev.& 1997 Gujarat High Court Regu. Act), 1992

2 The Income Tax Act, A.Y 1994-95 Gujarat High Court 1961

3 The Income Tax Act, A.Y 1996-97 Assessment Officer 1961 (matter remanded by ITAT)

4 The Income Tax Act, A.Y 2001-02 Assessment Officer 1961

5 Gujarat Sales Tax Act, F.Y 1999-2000 Joint Commissioner 1969 and 2000-2001 (Appeals) of Commercial Tax

6 Gujarat Value Added F.Y 2009-10 Deputy Commissioner Tax Act, 2003 (Appeals) of Commercial Tax.

7 Gujarat Value Added F.Y 2010-11 Joint Commissioner Tax Act, 2003 (Appeals) of Commercial Tax

8 Employees' State Part of FY 1994- ESI Court Insurance Act, 1948 95 to FY 1996-97

(c) The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provision of the Companies Act, 1956 and rules made there under.

8. In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. Further, the company has incurred cash losses during financial year covered by the audit and also in the immediate preceding financial year.

9. As per the draft scheme of arrangement of the company examined by us and the information and explanations provided in note no 4.3 and 4.4 of notes to financial statements, the company has not defaulted in repayment of dues to any financial institute or bank or debenture holders at the balance sheet date.

An amount of Rs. 750 lacs in suspense account remains unsettled. Refer note no. 40 of notes to financial statements.

10. In our opinion and according to information and explanations given to us, the terms and conditions of the guarantee given by the company for loans taken by others from bank or financial institutions during the year are not prejudicial to the interest of the company.

11. According to the information and explanations given to us, the company has not taken term loan during the year. However, in respect of term loans availed in the past the same were applied for the purpose for which loan were obtained.

12. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Dhirubhai Shah & Doshi Chartered Accountants Firm's Registration Number: 102511W

Kaushik D. Shah Partner

Membership Number: 016502

Place: Ahmedabad Date: 27/06/2015




Mar 31, 2014

We have audited the attached Balance Sheet of Ashima Limited as at March 31, 2014 and the related Profit and Loss Account 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

Attention is required to following notes forming parts of accounts-

1. Note no. 39 relating to non provision of interest amounting to Rs. 32,213.63 lacs on secured/ unsecured debt.

Subject to the foregoing, 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:

(i) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2014;

(ii) in the case of the statement of profit and loss, of the loss 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.

Emphasis Matter

We draw attention to Note No 42 relating to preparation of accounts on a going concern basis. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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 subject to note no. 39 of notes forming part of the accounts regarding non provisions of interest and reconciliation of outstanding dues of the lenders, 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 sub-section (3C) of section 211 of the Companies Act, 1956; and

e. On the basis of written representations received from the directors as on March 31, 2014 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF THE AUDITORS

1. The nature of the company''s business/activities during the year is such that the requirements of clauses (xii),(xiii) and (xiv) of paragraph 4 of the Order are not applicable to the company.

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals. In our opinion, the programme of verification is reasonable having regard to the size of the company and the nature of its assets. We have been informed that no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

3. (a) As explained to us, the inventories have been physically verified during the year by the management except inventories lying with third parties (other than stock lying with Ashima Dyecot Limited) which have been confirmed and stock in transit which have been subsequently received. In our opinion, the frequency of verification is reasonable.

(b) As explained to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, we are of the opinion that, the company is maintaining proper records of inventory. Discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with in the books of account.

4. (a) As explained to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Not applicable in view of (a) above.

(c) Not applicable in view of (a) above.

(d) Not applicable in view of (a) above.

(e) As explained to us, the company has not taken any loans, secured or unsecured from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

(f) Not applicable in view of (e) above.

(g) Not applicable in view of (e) above.

5. In our opinion and according to the information and explanation 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 purchases of inventory, 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 internal controls.

6. (a) We have been informed that particulars of contracts or arrangements required to be entered in 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, all the transactions 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 Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public. Further, no order has been passed by the Company Law Board or any other court or tribunal.

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

9. According to the information and explanations given to us, the company has maintained proper cost records as prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not however made a detailed examination of the same.

10. (a) According to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, income tax, municipal tax, sales tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employee''s state insurance, income tax, sales tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it were in arrears, as at March 31, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, the details of disputed statutory dues are as follows:

Sr. Nature of Nature Amount Period to No. statute of dues Rupees in which the lacs amount relates

1 Foreign Trade (Dev. Custom Duty 56.55 1997 & Regu. Act), 1992 and Interest

2 The Income Tax Act, Income tax 41.04 A.Y. 1994-95 1961

3 The Income Tax Act, Income tax 676.66 A.Y. 1996-97 1961

4 The Income Tax Act, Income tax 0.87 A.Y. 2001-02 1961

5 Gujarat Sales Tax Sales Tax 1906.01 A.Y. 1999- Act, 1969 2000 and 2000-2001

Sr. Nature of Forum where No. statute dispute is pending

1 Foreign Trade (Dev. Gujarat High Court & Regu. Act), 1992

2 The Income Tax Act, Gujarat High Court 1961

3 The Income Tax Act, Assessment Officer (matter 1961 remanded by ITAT)

4 The Income Tax Act, Assessment Officer 1961

5 Gujarat Sales Tax Joint Commissioner (Appeals) Act, 1969 of Commercial Tax 11. In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. Further, the company has incurred cash losses during the financial year covered by our audit.

12. According to the information and explanations given to us, the company has defaulted in repayment of dues to banks, financial institutions and debenture holders. This amount relates to dues to such specified lenders and does not cover entire debt of the company. The details of which are as follows:

(Rs. in Lacs)

Year of default Principal Interest Total

Within the year under review - 5,527.93 5,527.93

Since prior to the year under review 4,060.54 25,344.66 29,405.20

Total 4,060.54 30,872.59 34,933.13

Apart from the above the amount of Rs. 750 lacs in suspense account also remains unsettled. Refer note no. 40 of notes forming parts of accounts.

13. According to the information and explanations given to us, in respect of guarantees given by the company for loans taken by others from banks, the terms and conditions of such guarantee are not prejudicial to the interest of the company.

14. According to the information and explanations given to us, the company has not taken term loans during the year. However, in respect of term loans availed in past the same were applied for the purpose for which the loans were obtained.

15. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

16. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

17. According to the information and explanations given to us, proper securities or charge have been created in respect of debentures issued by the company.

18. According to the information and explanations given to us, the company has not raised any money by way of public issue during the year under audit.

19. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Dhirubhai Shah & Doshi Chartered Accountants [Firm Registration No. 102511W]

Kaushik D. Shah Date : May 30, 2014 Partner Place : Ahmedabad Membership No. 016502


Mar 31, 2013

Report on the Financial Statements

We have audited the attached Balance Sheet of Ashima Limited as at March 31, 2013 and the related Profit and Loss Account 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

Attention is required to following notes forming parts of accounts-

1. Note no. 38 relating to non provision of interest amounting to Rs. 27,409.57 lacs on secured/ unsecured debt.

2. Note no. 41 relating to preparation of accounts on a going concern basis.

Subject to the foregoing, 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:

(i) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2013;

(ii) in the case of the statement of profit and loss, of the loss 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.

Report on Other Legal and Regulatory Requirements

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

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 subject to note no. 38 of notes forming part of the accounts regarding non provision of interest and reconciliation of outstanding dues of the lenders, 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 sub-section (3C) of section 211 of the Companies Act, 1956; and

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.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE REPORT OF THE AUDITORS

1. The nature of the company''s business/activities during the year is such that the requirements of clauses (xii),(xiii) and (xiv) of paragraph 4 of the Order are not applicable to the company.

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals. In our opinion, the programme of verification is reasonable having regard to the size of the company and the nature of its assets. We have been informed that no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

3. (a) As explained to us, the inventories have been physically verified during the year by the management except inventories lying with third parties (other than stock lying with Ashima Dyecot Limited) which have been confirmed and stock in transit which have been subsequently received. In our opinion, the frequency of verification is reasonable.

(b) As explained to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, we are of the opinion that, the company is maintaining proper records of inventory. Discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with in the books of account.

4. (a) As explained to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Not applicable in view of (a) above.

(c) Not applicable in view of (a) above.

(d) Not applicable in view of (a) above.

(e) As explained to us, the company has not taken any loans, secured or unsecured from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

(f) Not applicable in view of (e) above.

(g) Not applicable in view of (e) above.

5. 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 purchases of inventory, 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 internal controls.

6. (a) We have been informed that particulars of contracts or arrangements required to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, all the transactions 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 Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public. Further, no order has been passed by the Company Law Board or any other court or tribunal.

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

9. According to the information and explanations given to us, the company has maintained proper cost records as prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not however made a detailed examination of the same.

10. (a) According to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, income tax, municipal tax, sales tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employee''s state insurance, income tax, sales tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it were in arrears, as at March 31, 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, the details of disputed statutory dues are as follows:

Sr. Nature of Nature Amount No. statute of dues Rupees in lacs

1 Foreign Trade (Dev. Custom Duty 54.14 & Regu. Act), 1992 and Interest

2 The Income Tax Act, Income tax 41.04 1961

3 The Income Tax Act, Income tax 676.66 1961

4 The Income Tax Act, Income tax 0.87 1961

5 The Income Tax Act, Income tax 0.48 1961

6 The Income Tax Act, Income tax 0.10 1961

7 Gujarat Education Education 64.77 Cess Act, 1962 cess

8 Gujarat Sales Tax Sales Tax 1906.01 Act, 1969

Nature of statute Period to Forum where which the dispute is pending amount relates

Foreign Trade (Dev. & Regu. Act), 1992 1997 Gujarat High Court

The Income Tax Act, 1961 A.Y. 1994-95 Gujarat High Court

The Income Tax Act, 1961 A.Y. 1996-97 Assessment Officer (matter remanded by ITAT)

The Income Tax Act, 1961 A.Y. 2001-02 Assessment Officer

The Income Tax Act, 1961 A.Y. 2006-07 CIT (Appeals)

The Income Tax Act, 1961 A.Y. 2007-08 CIT (Appeals)

Gujrat Education Prior to year Ahmedabad Municipal

Cess Act, 1962 1993-94 Corporation Cess Act, 1962

Gujrat Sales Tax Act, 1969 A.Y. 1999- Joint Commissioner (Appeals) 2000 and of Commercial Tax

2000-2001

11. In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. Further, the company has incurred cash losses during the financial year covered by our audit.

12. According to the information and explanations given to us, the company has defaulted in repayment of dues to banks, financial institutions and debenture holders. The details of which are as follows:

(Rs. in Lacs)

Year of default Principal Interest Total

Within the year under review ___ 4,629.84 4,629.84

Since prior to the year under review 4,060.54 20,714.82 24,775.36

Total 4,060.54 25,344.66 29,405.20

Apart from the above the amount of Rs. 750 lacs in suspense account also remains unsettled. Refer note no. 39 of notes forming parts of accounts.

13. According to the information and explanations given to us, in respect of guarantees given by the company for loans taken by others from banks, the terms and conditions of such guarantee are not prejudicial to the interest of the company.

14. According to the information and explanations given to us, the company has not taken term loans during the year. However, in respect of term loans availed in past the same were applied for the purpose for which the loans were obtained.

15. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

16. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

17. According to the information and explanations given to us, proper securities or charge have been created in respect of debentures issued by the company.

18. According to the information and explanations given to us, the company has not raised any money by way of public issue during the year under audit.

19. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.



For Dhirubhai Shah & Co.

Chartered Accountants

[Firm Registration No. 102511W]



Kaushik D. Shah

Date:May 24, 2013 Partner

Place: Ahmedabad Membership No. 016502


Mar 31, 2012

1. We have audited the attached balance sheet of Ashima Limited as at March 31, 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 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 (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the annexure referred to 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 the audit;

(b) In our opinion subject to note no. 38 of notes forming part of the accounts regarding non- provision of interest, proper books of account as required by the law, have been kept by the company so far as appears from our examination of those books;

(c) The balance sheet, profit & loss account and the cash flow statement dealt with by this report are in agreement with the books of account of the company;

(d) In our opinion subject to note no. 38 of notes forming part of the accounts regarding non- provision of interest the balance sheet, profit & loss account and the cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

(f) Attention is invited to following notes forming parts of accounts-

1) Note no. 38 relating to non provision of interest amounting to Rs. 23442.98 lacs on secured/unsecured debt.

2) Note no. 42 relating to preparation of accounts on a going concern basis.

Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

(a) In the case of the balance sheet, of the state of affairs of the company as at March 31, 2012; and

(b) In the case of the profit and loss account, of the loss of the company for the year ended on that date; and

(c) In the case of the cash flow statement, of the cash flows of the company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE REPORT OF THE AUDITORS

1. The nature of the company's business/activities during the year is such that the requirements of clauses (xii), (xiii) and (xiv) of paragraph 4 of the Order are not applicable to the company.

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals. In our opinion, the programme of verification is reasonable having regard to the size of the company and the nature of its assets. We have been informed that no material discrepancies were noticed on such verification.

(c) According to the information and explanation given to us, the company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

3. (a) As explained to us, the inventories have been physically verified during the year by the management except inventories lying with third parties (other than stock lying with Ashima Dyecot Limited) which have been confirmed and stock in transit which have been subsequently received. In our opinion, the frequency of verification is reasonable.

(b) As explained to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, we are of the opinion that, the company is maintaining proper records of inventory. Discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with in the books of account.

4. (a) As explained to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) Not applicable in view of (a) above.

(c) Not applicable in view of (a) above.

(d) Not applicable in view of (a) above.

(e) As explained to us, the company has not taken any loans, secured or unsecured from the parties covered in the register maintained under section 301 of the Companies Act, 1956.

(f) Not applicable in view of (e) above..

(g) Not applicable in view of (e) above.

5. In our opinion and according to the information and explanation 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 purchases of inventory, 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 internal controls.

6. (a) We have been informed that particulars of contracts or arrangements required to be entered in 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, all the transactions 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 Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public. Further, no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any other court or tribunal.

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

9. According to the information and explanations given to us, the company has maintained proper cost records as prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not however made a detailed examination of the same.

10. (a) According to the information and explanations given to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employee's state insurance, income tax, sales tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employee's state insurance, income tax, sales tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it were in arrears, as at March 31, 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, the details of disputed statutory dues are as follows:

Sr. Nature of Nature Amount Period to Forum where No. statute of dues Rupees in which the dispute is pending lacs amount relates

1 Foreign Trade (Dev. Custom Duty 51.72 1997 Gujarat High Court & Regu. Act), 1992 and Interest

2 The Income Tax Act, Income tax 41.04 A.Y. 1994-95 Gujarat High Court 1961

3 The Income Tax Act, Income tax 676.66 A.Y. 1996-97 Assessment Officer (matter 1961 remanded by ITAT)

4 The Income Tax Act, Income tax 0.87 A.Y. 2001-02 Assessment Officer 1961

5 The Income Tax Act, Income tax 0.48 A.Y. 2006-07 CIT (Appeals) 1961

6 The Income Tax Act, Income tax 0.10 A.Y. 2007-08 CIT (Appeals) 1961

7 Gujarat Education Education 64.77 Past years Ahmedabad Municipal Cess Act, 1962 cess Corporation Cess Act,1962

8 Gujarat Sales Tax Sales Tax 1906.01 A.Y. 1999- Joint Commissioner (Appeals) Act, 1969 2000 and of Commercial Tax 2000-2001

11. In our opinion, the accumulated losses of the company are more than fifty percent of its net worth. Further, the company has not incurred cash losses during the financial year covered by our audit.

12. According to the information and explanations given to us, the company has defaulted in repayment of dues to banks, financial institutions and debenture holders. The details of which are as follows:

(Rupees in lacs)

Year of default Principal Interest Total

Within the year under review - 3,948.87 3948.87

Since prior to the year under review 4,124.29 17,148.30 21,272.59

Total 4,124.29 21,097.17 25,221.46

Apart from the above the amount of Rs. 750 lacs in suspense account also remains unsettled. Refer note no. 39 of notes forming parts of accounts to the balance sheet and profit and loss account.

13. According to the information and explanations given to us, in respect of guarantees given by the company for loans taken by others from banks, the terms and conditions of such guarantee are not prejudicial to the interest of the company.

14. According to the information and explanations given to us, the company has not taken term loans during the year. However, in respect of term loans availed in past the same were applied for the purpose for which the loans were obtained.

15. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

16. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

17. According to the information and explanations given to us, proper securities or charge have been created in respect of debentures issued by the company.

18. According to the information and explanations given to us, the company has not raised any money by way of public issue during the year under audit.

19. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Dhirubhai Shah & Co.

Chartered Accountants

Kaushik D. Shah

Date : May 16, 2012 Partner

Place : Ahmedabad Membership No. : 16502


Mar 31, 2010

1. We have audited the attached balance sheet of Ashima Limited as at March 31, 2010 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 companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principle? 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 section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the annexure referred to 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 the audit;

(b) In our opinion subject to note no. 12 of schedule 18 regarding non-provision of interest, proper books of account as required by the law, have been kept by the company so far as appears from our examination of those books;

(c) The balance sheet, profit & loss account and the cash flow statement dealt with by this report are in agreement with the books of account of the company;

(d) In our opinion subject to note no. 12 of schedule 18 regarding non-provision of interest the

balance sheet, profit & loss account and the cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

(f) Attention is invited to following notes of Schedule 18-

1) note no. 12 relating to non provision of interest amounting to Rs. 19617.97 lacs on secured/ unsecured debt.

2) note no. 16 relating to preparation of accounts on a going concern basis.

Subject tothe foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said financial statements, read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view:

(a) In the case of the balance sheet, of the state of affairs of the company as at March 31,2010; and

(b) In the case of the profit and loss account, of the loss of the company for the year ended on that date; and .

(c) In the case of the cash flow statement, of the cash flows of the company for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE REPORT OF THE AUDITORS

1. The nature of the companys business/activities during the year is such that the requirements of clauses (xii), (xiii) and (xiv) of paragraph 4 of the order are not applicable to the company. 2. (a) The company has maintained proper records showing full particulars including quantitative details

and situation of fixed assets.

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals. In our opinion, the programme of verification is reasonable having regard to the size of the company and the nature of its assets. We have been informed that no material discrepancies were noticed on such verification. .

(c) According to the information and explanation given to us, the company has not disposed off any substantial part of its fixed assets so as to affect its going concern.

3. (a) As explained to us, the Inventories have been physically verified during the year by the management

except inventories lying with third parties which have been confirmed and stock in transit which have been subsequently received. In our opinion, the frequency of verification is reasonable.

(b) As explained to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of the inventory records, we are of the opinion that, the company is maintaining proper records of inventory. Discrepancies noticed on physical verification of inventory as compared to book records were not material and the same have been properly dealt with in the books of account.

4. (a) As explained to us, the company has not granted any loans, secured or unsecured, to companies,

firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. (b) Not applicable in view of (a) above. , (c) Not applicable in view of (a) above.

(d) Not applicable in view of (a) above.

(e) As explained to us, the company had taken interest-free loans aggregating to Rs. 300 lacs from two parties covered in the register maintained under section 301 of the Companies Act, 1956. The year- end balance of these loans is Rs. NIL.

(f) The terms and conditions of loans taken by the company are not prima facie prejudicial to the interest of the company.

(g) Not applicable in view of (e) above.

5. In our opinion and according to the information and explanation 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 purchases of inventory, 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 rnajor weakness in internal controls.

6.- (a) We have been informed that particulars of contracts or arrangements required to be entered in 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, all the transactions 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 lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under with regard to the deposits accepted from the public. Further, no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any other court or tribunal.

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

9. According to the information and explanations given to us, the company has maintained proper cost records as prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion that prima facie the prescribed accounts and records have been maintained. We have not however made a detailed examination of the same.

10. (a) According to the information and explanations given to us, the company is generally regular in

depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, value added tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory clues applicable to it were in arrears, as at March 31,, 2010 for a period of more than six months from the date they became payable. (b) According to the information and explanation given to us, the details of disputed statutory dues are as follows:

Sr. Nature of Nature Amount No. statute of dues Rupees in lacs 1 Central Excise and Excise duty 266.18 salt Act,1944 2 Central Excise and Excise duty 7.56 Salt Act, 1944 3 Central Excise and Service tax 148.01 Salt Act; 1944 4 Foreign Trade (Dev. Custom Duty 46.89 DGFT, Regu. Act), 1992 and Interest 5 The Income Tax Act, Income tax 41.04 1961 6 The Income Tax Act, Income tax 676.66 1961 7 The Income Tax Act, Income tax 0.87 1961 8 The Income Tax Act, Income tax 0.48 1961 9 The Income Tax Act, Income tax 0.10 1961 10 Gujarat Education Education 64.77 Cess Act, 1962 cess 11 Gujarat Sales Tax Sales Tax 1906.01 Act, 1969

Sr. Nature of Year to which Forum where No. statute the amount dispute is pending relates 1 Central Excise and 1996 Customs Excise and Service Salt Act,1944 Tax Appellate Tribunal 2 Central Excise and 1997 Customs Excise and Service Salt Act, 1944 Tax Appellate Tribunal 3 Central Excise and 1997 Commissioner (Appeals), Salt Act; 1944 Custom Excise and Service Tax 4 Foreign Trade (Dev. 1997 Addl. D.G. (Appeals), DGFT, Regu. Act), 1992 New Delhi 5 The Income Tax Act, 1994-95 Gujarat High Court 1961 6 The Income Tax Act, A.Y. 1996-97 Assessment Officer (matter 1961 remanded by ITAT) 7 The Income Tax Act, A.Y. 2001-02 Assessment Officer 1961 8 The Income Tax Act, A.Y. 2006-07 CIT (Appeals) 1961 9 The Income Tax Act, A.Y. 2007-08 CIT (Appeals) 1961 10 Gujarat Education Past years Ahmedabad Municipal Cess Act, 1962 Corporation cess Act, 1962 11 Gujarat Sales Tax A.Y. 1999- Joint Commissioner 2000 and (Appeals) of 2000-2001 Commercial Tax

11. In our opinion, the accumulated losses of the company are more than fifty percent of its net Worth. Further, the company has incurred cash losses during the financial year covered by our audit.

12. According to the information and explanations given to us, the company has defaulted in repayment of dues to banks, financial institutions and debenture holders. The details of which are as follows:

(Rupees in lacs) Year of default Principal Interest Total Within the year under review 2188.31 19617.97 21806.28 Since prior to the year under review 42186.12 54893.95 97080.07 Total 44374.43 74511.92 118886.35

Apart from the above the amount of Rs. 750 lacs in suspense account also remains unsettled. Refer note no. 13 of Schedule 18 to the balance sheet and profit and loss .account.

13. According to the information and explanations given to us, in respect of guarantees given by the company for loans taken by others from banks, the terms and conditions of such guarantee are not prejudicial to the interest of the company.

14. According to the information and explanations given to us, the company has not taken term loans during the year. However, in respect of term loans availed in past the same were applied for the purpose for which the loans were obtained.

15. According to the information and explanations given to us and on an overall examination c* the balance sheet of the company, we report that no funds raised on short-term basis have been used foi long-term investment.

16. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

17. According to the information and explanations given to us, proper securities or1 charge have been created in respect of debentures issued by the company.

18. According to the information and explanations given to us, the company has not raised any money by way of public issue during the year under audit.

19. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For Dhirubhai Shah & Co. Chartered Accountants Kaushik D. Shah Date : April 28, 2010 Partner Place : Ahmedabad Membership No.: 16502

 
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