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Auditor Report of AVI Products India Ltd.

Mar 31, 2014

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

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with 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, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

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

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003 (the Order) issued by the Central Government of India in terms of Section 227(4A) 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, 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e. On the basis of the written representations received from the directors as on March 31, 2014, 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 Section 274(1)(g) of the Act.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of AVI PHOTOCHEM LIMITED. On the accounts of the company for the year ended 31st March, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. (a)As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

2. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company. (b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the company.

3. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

4. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

5. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

6. As per information & explanation given by the management, maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

7. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

8. The Company''s accumulated losses at the end of the Financial Year are more than fifty percent of it''s net worth. The company has not incurred cash losses in Financial year but has incurred cash losses in preceding Financial year.

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

10. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

11. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution

12. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

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

14. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

15. The Company has no outstanding debentures during the period under audit.

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

17. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of

For S. SHAH & ASSOCIATES Chartered Accountants (Firm Registration No. 109771W) Sd/- Place :Mumbai „ Date :30-05-2014 Propriter Membership No.: 034446


Mar 31, 2013

We have audited the accompanying financial statements of AVI PHOTOCHEM 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 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. 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.

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

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

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

2. As required by section 227(3) of the Act, we report that:

a) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 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.

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of AVI PHOTOCHEM LIMITED. On the accounts of the company for the year ended 31st March, 2013.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

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

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

2. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(b) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not taken loans from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. Thus sub clauses (f) & (g) are not applicable to the company.

3. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

4. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

5. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

6. As per information & explanation given by the management, maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

7. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes.

8. The Company''s accumulated losses at the end of the Financial Year are more than fifty percent of it''s net worth. The company has not incurred cash losses in financial year but has incurred cash losses in preceding financial year.

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

10. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

11. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

12. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

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

14. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

15. The Company has no outstanding debentures during the period under audit.

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

17. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For S. SHAH & Associates

Chartered Accountants

PROPRIETOR

SHAILESH K SHAH

Membership No: 34446

Place: Mumbai

Date: 30th May 2013


Mar 31, 2010

1 We have audited the accompanying balance sheet of AVI PHOTOCHEM LIMITED as at 31st March. 2010 and the statements of profit and loss for the year ended, prepared in conformity with accounting principles generally accepted in India These financial statements are (he responsibility of the Companys management Our responsibility is to express an opinion on these financial statements based on our audit

2. We have conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial stitements are free of material misstatement An audit includes examining, on 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 the management, as well as evaluating the overall financial statement presentation We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order. 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act. 1956. we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order

4 Further to our comments in the Annexure referred to in paragraph (3) above:

4.1 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

4.2 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 these books

4.3 In our opinion, the Profit and Loss Account and the Balance Sheet comply with the Accounting standards referred to in Section 211(3C) of the Companies Act. 1956. Subject to. Non Compliance of:

a Interest Income on sticky Loan (Refer Note 4 of Notes annexed to and forming pan of Accounts)

b. Excise Duty (Refer Note I F of notes annexed to and forming pans of Accounts)

c. Custom Duty Refer G of notes annexed to and forming parts of Accounts) and subject to valuation of inventor) not complying with the provision of Accounting Standard 2 (Revised) (Refer Note I c)

4.4 The Balance Sheet and the Profit and Loss Account dealt with by the report are in agreement with the books of account

4.5 On the basis of the written representation received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March, 2010 from being appointed as Directors in terms of clause (g) of sub-section (I) of Section 274 of the Companies Act, 1956.

4 6 In our opinion and to the best of our information and according to the explanations given to us, Balance Sheet and the Profit and Loss Account read with the Notes thereon, give the information required by the Companies Act, 1956, Subject to non compliance of:

(i) a. Interest on Sticky Loans not provided which has resulted in understatement of loss by Rs.538,655/- (Refer note 4 of notes annexed to and forming parts of Accounts)

b. Excise Duty (Refer Note I F of notes annexed to and forming parts of Accounts) which will have no effect on loss.

c Custom Duty (Refer Note I G of notes annexed to and forming parts of Accounts) which has no effect on the loss for the year.

d. Non provision of term loan interest (Refer note 16 of Notes annexed to and forming parts Accounts) which has resulted in to understatement of current year loss by Rs 284,000/- and under statement of liability and accumulated loss by Rs 26.98,000/-

e Non provision of interest on other bank facilities (Refer note 16 of notes annexed to and forming pans of Accounts)

In view of (a) to (d) total loss for the current year have been understated by Rs.254,655/-. The impact of loss cannot be fully quantified In view of non quantification of interest figure of item (e)

(ii) a. Non-appointment of full time Company Secretary Refer Note No 11 of notes annexed to and forming parts of Accounts). b Non-disclosure of creditors of Small Scale Industries (Refer Note 19 of notes annexed to and forming parts of Accounts)

4 7 In so far as it relates to Balance Sheet of the state of affairs of the Company as at 31st March, 2010 in the manner required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2010; and

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

ANNEXURE TO THE AUDITORS REPORT OF AVI PHOTOCHEM LIMITED

YEAR ENDED 31st MARCH, 2010

(Referred to in paragraph (3) of our report of even dated)

(i) (a) The Company has maintained proper records showing lull particulars including quantitative details and situation of all fixed assets (b) According to the information and explanation provided to us, fixed assets have been physically verified by the management at reasonable intervals during the year. As informed to us by the management, no material discrepancies were noticed on such verification. (c) In our opinion and according to the information and explanation provided to us, none of the fixed assets have been sold during the year.

(ii) (a) Physical Verification was conducted by the management at reasonable intervals during the year in respect of finished goods, semi-finished goods and raw material (b) The procedure of physical verification is of stocks followed by the management are reasonable and adequate in relation to the size of the company and nature of its business. (c) The discrepancies noticed on verification between the physical stock and the book records

were not material and the same have been properly dealt within the books of accounts. On the basis of our examination of the stock records, we are of the opinion that there has been a contravention of Accounting Standard 2 (Revised) " Valuation of Inventories" regarding the valuation of stock. However, the same will not have much material impact on the loss

(iii) (a) According to the records of the Company and according to the information and explanation given to us. the Company has not granted/taken any loans to the companies, firms or other parties listed on the register maintained u/s 301 and to companies under same management.

(b) The company has taken interest free Unsecured Loans from the directors & those amounts are in nature of current account However, the terms are not preducial to the company.

(c) There is no stipulation of payment in case of loans given or taken.

(d) This clause is not applicable in view of (iii) (a).

(iv) In our opinion and according to the information and explanation provided to us, the company has no adequate internal control in commensurate with the size and nature of the business in respect of fixed assets, purchase of inventory or sale of inventory.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions during the year that need to be entered into Register maintained under Section 301 of the Companies Act. 1956 has been entered.

(b) In our opinion and according 10 the information and explanations provided to us each of the transactions have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time

(vi ) In our opinion and according to explanations given to us. the company has complied with the provisions of sections 58A and 58AA of the act and the rules formed there under for acceptance of deposits. But no interest has been provided for the same.

(vii) The Company is not having any internal audit system

(viii) This clause is not applicable as no Cost Records have been prescribed under section 209(l)(d) of the Companies Act, 1956 that are required to be maintained by the Company

(ix) (a) According to the information and explanation given to us and books and records examined by us there are no undisputed amounts payable in respect of Income Tax, Wealth Tax, Custom Duty and Excise Duty Except undisputed liabilities

(b) There are no dues of Wealth lax/Custom Duty/Excise Duty/Cess that have not been deposited on account of any dispute.

(c) There is disputed liabilities in respect of Income Tax amounting to Rs 6,40,000 which has not been paid by the company Matter is pending before the ITAT and also disputed liabilities in respect of Sales Tax amounting to Rs. 3,25,000/-

(x) The Company has accumulated losses at the end of the current financial year exceeding fifty percent of its net worth. The Company has suffered cash losses in the us immediately preceding Financial Year.

(xi) The Company has not obtained any funds from Financial Institutions or has not raised money by issue of debentures. Hence, the clause is not applicable with regards to Financial Institutions and Debenture Holders.

(xii) The Company has not granted any loans or advances in the nature of loans on the basis of security by way of pledge of any shares, debentures or other securities Therefore this clause is not applicable.

(xiii) The Company is neither chit fund nor a nidhi/ mutual benefit fund/ society. Thus the provisions of any special statute applicable to chit fund are not applicable to the Company.

(a) The clause is not applicable in view of para (xiii).

(b) The clause is not applicable in view of para (xiii).

(c) The clause is not applicable in view of para (xiii)

(d) The clause is not applicable in view of para (xiii).

(xiv) According to the information and explanations provided to us and on the basis of audit procedure the Company does not deal or trade in shares, securities, debentures and other investments. Thus, further provisions in respect of these transactions are not applicable to the Company and hence no further comments are issued under this clause

(xv) According to the information and explanation given to us. the Company has not given any guarantee for loans taken by others from bank or financial institutions

(xvi) On the basis of audit procedure and according to the information and explanations given to us, the Company has not taken any term loans during the year and therefore this clause is not applicable

(xvii) Company has not raised any funds during the year therefore this clause is not applicable.

(xviii) As informed by the management, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

(xix) The Company has not issued any Debentures. Thus, there is no need for creation of any security.

(xx) The Company has not raised money through public issue. Accordingly, provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

(xxi) According to the information and explanation given to us, no frauds on or by the Company have been noticed or reported during the period under audit.

For and on behalf of

J.H. Ghumnra & Co.

Chartered Accountants

Firm Registration No: 103185W

S/d

(J.H. Ghumara)

Proprietor

Mumbai

Dated: 4th September, 2010

 
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