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Auditor Report of Banswara Syntex Ltd.

Mar 31, 2014

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

Management Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of financial position, financial performance and Cash Flow 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") 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. The responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatements, 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 misstatements.

Audit involves performing procedure to obtain audit evidence about the amounts and disclosure in the financial statements. The procedure selected depends upon auditor''s judgment, including the assessment of the risk of materia! misstatements of the financial statements, whether due to fraud or error. In making those risk assessment, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedure that are appropriate in the circumstances, but not for the purposed expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of financial statements.

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

Opinion

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

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

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

(c) In case of the Cash Flow Statements, 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) 0rder,2003("the Order") issued by Central Government of India in terms of sub-section (4 A) 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 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 examinations of those books;

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statements 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 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 written representations received from the directors as on March 31,2014 and taken on record by the Board of Directors, none of the director 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 Act.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT

Statement referred to in our report of even date to the members of the BANSWARA SYNTEX LIMITED on the financial statement for the year ended 31st March 2014.

(i) (a) The Company has maintained records of fixed assets showing particulars of quantitative details, situation and year of addition, which needs improvement.

(b) Fixed assets of the Company have physically verified by the management during the year, no material discrepancies were noticed on such physical versification. Company should carry physical verification in planned and regular manner.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not effected the going concern status of the Company.

(ii) (a) The Inventory has been physically verified during the

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

year by the management. In our opinion, the frequency of verification is reasonable.

(b) 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. Inventories with third parties are verified by respective party.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been dealt in the financial statements.

(iii) (a) Company has not granted any loan to the companies, firm and other parties covered in the register maintained under section 301 of the Act.

(b) The rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the Company.

(c) Principal and interest has been received during the year as per the loan agreement.

(d) There is no overdue of principal and interest.

(e) Unsecured loans taken from 11 (Eleven) persons covered In the register maintained under section 301 of the Act amounting to Rs. 398 lacs outstanding at the year end and the maximum amount involved is Rs. 771 lacs.

(f) Interest and other terms & conditions of loan taken are not prima facie prejudicial to the interest to the Company.

(g) Company is regular in payment of principal amount and interest.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to 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 system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Act have been so entered.

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

(vi) 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 of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. To the best of our knowledge and according to the information and explanations given to us, no order on the Company under aforesaid section has been passed by the Company Law Board.

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

(viii) According to the information and explanations given to us, the Central Government has prescribed under Section 209 (1) (d) of the Act, the maintenance of cost records in respect of its products manufactured by the Company. We have broadly reviewed the books of account maintained and in our opinion; the prescribed accounts and records have prima facie been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Cess, Excise Duty and other material statutory dues applicable to it.

According to the information and explanations given to us, there was no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, cess and other material statutory dues were in arrears, as at 31.03.2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, details of dues of Sales Tax, Income Tax, Service Tax, Customs Duly, Wealth Tax, Excise Duty and Cess which have not been deposited on account of dispute are given below:

Nature of Statute Nature Amount of (Rs. ) Dues

Finance Act, 1994 Service 27,04,878 Tax

Finance Act, 1994 Service 14,97,928 Tax

Central Excise Central 2,09,74,515 Act, 1944 Excise Duty

Custom Act, 1962 Custom Duty 90.000

Custom Duty, 1962 Custom Duty 80,230

Finance Act, 1961 Income Tax 1,66,17,040

Finance Act, 1961 Income Tax 48,68,150

Nature of Statute Period to Forum where which the dispute is Amount relates pending

Finance Act, 1994 2006-07 to CESTAT, 2008-09 New Delhi

Finance Act, 1994 2010-2011 Comm-Appeal, Jaipur

Central Excise 2004-2009 CESTAT,New Delhi Act, 1944

Custom Act, 1962 2013 Comm-Appeal, Jamnagar (Gujrat)

Custom Duty, 1962 1995 High Court, Mumbai

Finance Act, 1961 2011-12 CIT (Appeals), Udaipur

Finance Act, 1961 2010-11 CIT (Appeals), Udaipur

(x) There are no accumulated losses at the end of financial year. The Company has also not incurred cash losses during the financial year covered by our audit and the preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has generally not defaulted in repayment of dues to a financial institution and bank.

(xii) According to information & explanations given to us. the Company has not given any loan and advances an the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund. Therefore, the provisions of clause 4 (xiii) of Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

(xv) According to information & explanations given to us, the Company has given guarantee for Rs. 950 lacs (Outstanding is Rs. 449.88 lacs as on 31.03.2014) for loans taken by Banswara Global Limiled, a Subsidiary Company. The terms and conditions of such guarantee are not prejudicial to the interest of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained, other than temporary deployment pending application.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow statement of the Company, we report that the no funds raised on short term basis have been used for long term investment.

(xviii) 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 Act.

(xix) According to the information and explanations given to us, the Company had not issued unsecured debenture during the year.

(xx) The Company has not raised any money through public issue during the year.

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

For KALANI & COMPANY Chartered Accountants FRN - 000722C K.L. JHANWAR Place : Mumbai Partner Dated :24th May, 2014 M.No.014080


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of BANSWARA SYNTEX 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 Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of financial position, financial performance and Cash Flow 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"). The responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatements, 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 misstatements.

Audit involves performing procedure to obtain audit evidence about the amounts and disclosure in the financial statements. The procedure selected depends upon auditors'' judgment, including the assessment of the risk of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessment, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedure that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of financial statements. We believe that audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order") issued by 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 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 examinations of those books;

c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statements 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 Act;

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 director 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 Act.

Statement referred to in our report of even date to the members of the BANSWARA SYNTEX LIMITED on the financial statement for the year ended 31sl March, 2013. (i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

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

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not effected the going concern status of the Company. (ii)

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

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. Inventories with third parties are verified by respective party.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been dealt properly in the books of accounts.

(iii) (a) Company has not granted any loan to the companies, firm and other parties covered in the register maintained under section 301 of the Act.

(b) The rate of interest and other terms and conditions of such loans are not, prima facie, prejudicial to the interest of the Company.

(c) Principal and interest has been received during the year as per the loan agreement.

(d) There is no overdue more than Rs. 1 Lac of principal and interest.

(e) Unsecured loans taken from 13 (Thirteen) persons covered in the register maintained under section 301 of the Act amounting to Rs. 771.00 lacs outstanding at the year end and the maximum amount involved is Rs.935.00 lacs.

(f) Interest and other terms & conditions of loan taken are not, prima facie, prejudicial to the interest of the Company.

(g) Company is regular in payment of principal amount and interest.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to 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 system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Act have been so entered.

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

(vi) 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 of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. To the best of our knowledge and according to the information and explanations given to us, no order on the Company under aforesaid section has been passed by the Company Law Board.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (viii) According to the information and explanations given to us, the Central Government has prescribed under Section 209 (1) (d) of the Act, the maintenance of cost records in respect of its products manufactured by the Company. We have broadly reviewed the books of account maintained and in our opinion; the prescribed accounts and records have, prima facie, been made and maintained by the Company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Cess, Excise Duty and other material statutory dues applicable to it. According to the information and explanations given to us, there was no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, cess and other material statutory dues were in arrears, as at 31.03.2013 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, details of dues of Sales Tax, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of dispute are given below:

Nature of Statute Nature Amount Period to Forum where of (Rs.) which the dispute is Dues Amount relates pending

Finance Act, 1994 Service 27,04,878 2006-07 to CESTAT, Tax 2008-09 New Delhi

(x) There are no accumulated losses at the end of financial year. The Company has also not incurred cash losses during the financial year covered by our audit and the preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has generally not defaulted in repayment of dues to a financial institution and bank.

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

(xiii) The Company is not a chit fund. Therefore, the provisions of clause 4 (xiii) of Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

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

(xv) According to information & explanations given to us, the Company has given guarantee for Rs.1,950.00 Lacs for loans taken by Carreman Fabrics India Limited, a Joint Venture. The terms and conditions of such guarantee are not prejudicial to the interest of the Company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained, other than temporary deployment pending application.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow statement of the Company, we report that the no funds raised on short term basis have been used for long term investment.

(xviii) 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 undersection301 of the Act.

(xix) According to the information and explanations given to us, the Company had not issued unsecured debenture during the year.

(xx) The Company has not raised any money through public issue during the year.

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

For KALANI & COMPANY

Chartered Accountants FRN - 000722C

K.L. JHANWAR

Place : Mumbai Partner

Dated: 24th May, 2013 M.No. 014080


Mar 31, 2012

1. We have audited the attached Balance Sheet of BANSWARA SYNTEX LIMITED, as at 31st March, 2012 and also the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in 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 (Auditor's Report) Order, 2003 issued by Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1'956, we enclose in the Annexure, a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to above, we report that:

i) 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.

ii) In our opinion, the Company has kept proper books of accounts as required by the law, so far as appears from our examination of those books.

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

iv) In our opinion. Balance Sheet, Statement of Profit and Loss and 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.

v) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies, Notes on Account and other disclosures, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

c) In the case of Cash Flow statement, of the cash flow for the year ended on that date.

5. On the basis of written representations received from the Directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Director is disqualified as on 31' March, 2012 from being appointed as a Director in terms of Clause (g)of sub section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS' REPORT

Statement referred to in paragraph (3) of our report of even date to the members of the BANSWARA SYNTEX LIMITED on the accounts for the year ended 31' March, 2012.

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

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

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the company and such disposal has, in our opinion, not effected the going concern status of the company.

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

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. Inventories with third parties are verified by respective party.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been dealt property in the books of accounts.

(iii) (a) The company has not granted any unsecured loan to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clause 4(iii) (a) to (d) of the Companies (Auditor's Report) Order, 2003 are not applicable.

(e) Unsecured loans taken from 12 (Twelve) persons covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs. 857.25 lacs outstanding at the year end and the maximum amount involved is Rs. 857.25 lacs.

(f) Interest and other terms & conditions of loan taken are not prima facie prejudicial to the interest to the company.

(g) Company is regular in payment of principal amount and interest.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to 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 system.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made 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 prima facie reasonable having regard to prevailing market prices at the relevant time.

(vi) 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 of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. To the best of our knowledge and according to the information and explanations given to us, no order on the company under aforesaid section has been passed by the Company Law Board.

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

(viii) According to the information and explanations given to us, the Central Government has prescribed under Section 209(1 )(d) of the Companies Act, 1956, the maintenance of cost records in respect of its products manufactured by the Company. We have broadly reviewed the books of account maintained and in our opinion; the prescribed accounts and records have prima facie been made and maintained by the company. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The company is generally regular in depositing with -appropriate authorities undisputed statutory dues including provident fund, investor education & protection fund, employees state insurance, income tax, sales 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, there was no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, cess and other material statutory dues were in arrears, as at 31.03.2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, details of dues of sales tax, income tax, service tax, customs duty, wealth tax and excise duty which have not been deposited on account of dispute are given below:

Nature of Statute Nature Amount Period to Forum where of (Rs.) which the dispute is Dues Amount relates pending

Central Excise Excise 18,44,966* 2005-06 Hon'ble High Act, 1944 Duty Court, Rajasthan

Central Excise Excise 1,96,422 2003-04 Joint Secretary, Act, 1944 Duty Government of India Finance Act,1994 Service 23,43,538 2006-07 to CESTAT, Tax 2007-06 New Delhi

Finance Act,1994 Service 3,61,340 2008-09 to Commissioner Tax 2009-10 (Appeals), Jaipur-II

Income Tax Act,1961 Income 26,35,450 2008-09 Commissioner of Tax lncome(Appeals) Udaipur

* Since Paid on 12.04.2012

(x) There are no accumulated losses at the end of financial year. The company has also not incurred cash losses during the financial year covered by our audit and the preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has generally not defaulted in repayment of dues to a financial institution and bank.

(xii) According to information & explanations given to us, the company has not given any loan and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund. Therefore, the provisions of clause 4 (xiii) of Companies (Auditor's Report) Order, 2003 are not applicable to the company.

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

(xv) According to information & explanations given to us, the company has given guarantee for Rs. 1,950.00 lacs for loans taken by Carreman Fabrics India Limited, a Joint Venture. The terms and conditions of such guarantee are not prejudicial to the interest of the company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were obtained, other than temporary deployment pending application.

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

(xviii) 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.

(xix) According to the information and explanation given to us, the company had not issued unsecured debenture during the year.

(xx) The Company has not raised any money through public issue during the year.

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

For KALANI & COMPANY

Chartered Accountants

FRN - 000722C

K.L. JHANWAR

Place: Mumbai Partner

Date : 21st May, 2012 M.No. 014080


Mar 31, 2011

We have audited the attached Balance Sheet of BANSWARA SYNTEX LIMITED, as at 31st March, 2011 and also the Profit and Loss Account and Cash Flow Statement of 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in 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.

As required by the Companies (Auditor's Report) Order, 2003 issued by 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 paragraph 4 and 5 of the said order.

1) Further to our comments in the Annexure referred to above, we report that: i) 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.

ii) In our opinion, the Company has kept proper books of accounts as required by the law, so far as appears from our examination of those books.

iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

iv) In our opinion, Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report; comply with the Accounting Standards referred to in sub-section (3c) of section 211 ofthe Companies Act, 1956.

v) On the basis of written representations received from the Directors, as on 31 st March, 2011 and taken on record by the Board of Directors, we report that none of the Director is disqualified as on 31st March, 2011 from being appointed as a Director in terms of Clause (g) of sub section (1) of Section 274 ofthe Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the, information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the State of Affairs ofthe Company as at 31 st March, 2011;

b) In the case of Profit & Loss Account, of the profit for the year ended on that date; and

c) In the case of Cash Flow statement, of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Statement referred to in paragraph (3) of our report of even date to the shareholders of the BANSWARA SYNTEX LIMITED on the accounts for the year ended 31" March, 2011.

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

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

(c) No substantial part of fixed assets have been disposed off during the year.

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

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. Inventories with others are verified by respective party.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The company has not granted any unsecured loan to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clause 4(iii) (a) to (d) of the Companies (Auditor's Report) Order, 2003 are not applicable.

(e) Unsecured loans taken from 12 (Twelve) persons covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs.497.90 Lacs outstanding at the year end and the maximum amount involved is Rs.513.27 Lacs.

(f) Interest and other terms & conditions of loan taken are not prima facie prejudicial to the interest to the company.

(g) Company is regular in payment of principal amount and interest.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to 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 system.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made 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 prevailing market prices at the relevant time.

(vi) 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 of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. To the best of our knowledge and according to the information and explanations given to us, no order on the company under aforesaid section has been passed by the Company Law Board.

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

(viii)According to the information and explanations given to us, the Central Government has prescribed under Section 209 (1) (d) of the Companies Act, 1956, the maintenance of cost records in respect of its products manufactured by the Company. We have broadly reviewed the books of account maintained and in our opinion; the prescribed accounts and records have prima facie been made and maintained by the company. We have not, however, made a detailed examination of the records with a view to determine whetherthey are accurate or complete.

(ix) (a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education & protection fund, employees state insurance, income tax, sales 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 income tax, wealth tax, sales tax, custom duty, and cess were in arrears, as at 31.03.2011 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 are no dues of sales tax, income tax, service tax, customs duty, wealth tax and excise duty which have not been deposited on account of any dispute except the following:

Nature of Nature Amount Period to Forum where Statute of (Rs.) which the dispute is Dues Amount pending relates Central Excise Excise 9,78,107 2005-06 Hon'bleHigh Act, 1944 Duty Court, Rajasthan

Central Excise Excise 1,96,422 2003-04 Joint Secretary Act, 1944 Duty Government of India

Finance Act, 1994 Service 23,43,538 2006-07 to CESTAT, Tax 2007-08 New Delhi

Finance Act, 1994 Service 2,75,829 2008-09 to Commissioner Tax 2009-10 (Appeals), Jaipur-ll

The Rajasthan Tax on Entry 6,31,55,618* 20O6-2007to Hon'bleHigh Entry of Tax 2009-2010 Court, Rajasthan Goods into Local Area Act, 1999

Rajasthan value Value 31,58,991 2007-08 to Assrt.Commissionei added AddedTax 2009-10 Commercial Taxes Tax Act 2003

Central Sales Tax Central 48,27,690 2007-08 to Asstt. Commissioner Act,1956 Sales Tax 2009-10 Commercial Taxes

*Since Paid Rs. 2,01,80,698/-

(x) There are no accumulated losses at the end of financial year. The company has also not incurred cash losses during the financial year covered by our audit and preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has generally not defaulted in repayment of dues to a financial institution and bank.

(xii) According to information and explanations given to us, the company has not given any loan and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund. Therefore, the provisions of clause 4 (xiii) of Companies (Auditor's Report) Order, 2003 are not applicable to the company.

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

(xv) According to information and explanations given to us, the company has given guarantee for Rs.1950 Lacs for loans taken by Carreman Fabrics India Limited, a Joint Venture. The terms and conditions of such guarantee are not prejudicial to the interest of the company.

(xvi) In our opinion, the term loans have been applied for the purpose for which they were raised.

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

(xviii)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 Act.

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

(xx) The Company has not raised any money through public issue during the year.

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For KALANI & COMPANY Chartered Accountants FRN - 000722C

K.L. JHANWAR Partner M.No.14080

Place : Mumbai Dated : 16th May, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of BANSWARA SYNTEX LIMITED, as at 31sl March, 2010 and also the Profit and Loss Account and Cash Flow Statement of 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in 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.

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

1) Further to our comments in the Annexure referred to above, we report that:

i) 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.

ii) In our opinion, the Company has kept proper books of accounts as required by the law, so far as appears from our examination of those books.

iii) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts.

iv) In our opinion, Balance Sheet, Profit & Loss Account and 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.

v) On the basis of written representations received from the Directors, as on 31s1 March, 2010 and taken on record by the Board of Directors, we report that none of the Director is disqualified as on 31s1 March, 2010 from being appointed as a Director in terms of Clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2010;

b) In the case of Profit & Loss Account, of the profit for the year ended on that date; and

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

For KALANI& COMPANY

Chartered Accountants FRN - 00722C

Place : Mumbai K.L.JHANWAR

Dated : 26m May,2010 Partner

M.No.14080

Statement referred to in paragraph (3) of our report of even date to the shareholders of the BANSWARA SYNTEX LIMITED on the accounts for the year ended 31s1 March, 2010.

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

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

(c) No substantial part of fixed assets have been disposed off during the year.

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

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. Inventories with others are verified by respective party.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) The company has not granted any unsecured loan to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly clause 4(iii) (a) to (d) of the Companies (Auditors Report) Order, 2003 are not applicable.

(b) Unsecured loans taken from 10 (Ten) persons covered in the register maintained under section 301 of the Companies Act, 1956 amounting to Rs.462.08 lacs outstanding at the year end and the maximum amount involved is Rs.475.20 lacs.

(c) Interest and other terms & conditions of loan taken are not prima facie prejudicial to the interest to the Company.

(d) Company is regular in payment of principal amount and interest.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to 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 system.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made 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 prevailing market prices at the relevant time.

(vi) 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 of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. To the best of our knowledge and according to the information and explanations given to us, no order on the company under aforesaid section has been passed by the Company Law Board.

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

(viii)According to the information and explanations given to us the Central Government has prescribed under Section 209(1) (d) of the Companies Act, 1956, the maintenance of cost records in respect of its products manufactured by the Company. We have broadly reviewed the books of account maintained and in our opinion; the prescribed accounts and records have prima facie been made and maintained by the company.

We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The company is generally regular in depositing with appropri -ate authorities undisputed statutory dues including provident fund, investor education & protection fund, employees state insurance, income tax, sales 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 income tax, wealth tax, sales tax, custom duty, and cess were in arrears, as at 31s March, 2010 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales tax, income tax, service tax, customs duty, wealth tax and excise duty which have not been deposited on account of any dispute except the following.

Nature of Statute Nature Amount Period to Forum where 0f (Rs.) which the dispute is Dues Pending

Central Excise Excise 2003-04 to Jmt Secretary Act, 1944 Duty 1174529 2005-06



The Rajasthan Tax Entry 4,03,61,395 2006-07 to Honourable

moiralAreGa ActS Tax 2009-10

1 ggg rajasthan

Finance Act, 1994 Service 1910010 2006-07 CESTAT, New

Tax Delhi

Sprvirp 9nnfi-ri7 Commissioner

Finance Act, 1994 4,33,528 for 20708 (Appeals), Jaipur-ll

(x) There are no accumulated losses at the end of financial year. The Company has also not incurred cash losses during the financial year covered by our audit and preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has generally not defaulted in repayment of dues to a financial institution and bank.

(xii) According to information & explanations given to us, the company has not given any loan and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund. Therefore, the provisions of clause 4 (xiii) of Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

(xv) According to information & explanations given to us, the company has given guarantee for Rs. 1,950.00 lacs for loans taken by Carreman Fabrics India Limited, a Joint Venture. The terms and conditions of such guarantee are not prejudicial to the interest of the Company.

(xvi) In our opinion, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet and Cash Flow Statement of the Company, we report that the no funds raised on short term basis have been used for long term investment.

(xviii)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.

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

(xx) The Company has not raised any money through public issue during the year.

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

For KALANI & COMPANY

Chartered Accountants FRN - 00722C

K.L. JHANWAR

Place : Mumbai Partner

Dated : 26th May, 2010 M.No.14080

 
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