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Auditor Report of Binny Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Binny 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 ("the Financial Statements").

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of 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

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

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

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosure in the financial statements. These procedures selected depend on the auditor's judgment, including the assessment of the risk 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Board of Directors, as well as evaluating the overall presentation of the financial statements.

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

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, of the state of affairs of the Company as at 31st March, 2015, its Profit, and its cash flows for the year ended on that date.

Emphasis of Matter

We draw the attentions to Note No:25.5 with regard to the Income Tax demands and Service Tax Demands disputed before the authorities, which describes the uncertainty related to the outcome of the Appeals filed against the Orders of the Authorities. Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ( the Order), issued by the Central Government of India, in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by section 143(3) of the Act, we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 relevant 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 representation received from the Directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors of the Company 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 Auditor's) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial statements – Refer Note.25.5 to the financial statements.

ii) The Company did not have any long term contracts including derivative contracts for which there were any material forseeable losses.

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

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements in our Independent Auditors' Report of even date)

1. a. In our opinion and according to the information and explanations given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. As per the information and explanations provided to us, the Company has physically verified the fixed assets during this year and there is no material discrepancies noticed on such verification.

2. a. According to the information and explanations given to us, the management has conducted physical verification of inventory (Land) at reasonable intervals.

b. According to the information and explanations given to us the procedures of physical verification of inventory (Land) followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

c. According to the information and explanation given to us the Company is maintaining proper records of inventory (Land) and there are no material discrepancies noticed on physical verification.

3. According to the information and explanations given to us, the Company has granted, unsecured interest free loans repayable on demand to two companies, the parties covered in the register maintained under section 189 of the Act. The total outstanding at the year-end was Rs.93.04 lakhs. The overdue amount, receipt of principal amount and the interest are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, for purchases of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls systems.

5. In our opinion and according to the information and explanation given to us, the Company has not accepted deposits from public during this year. Therefore the provisions of section 73 to 76 and relevant rules framed thereunder and any contravention of these provisions for the year under audit are not applicable.

6. As per the information and explanations given to us and represented by the Company the maintenance of cost records pursuant to the Rules made by the Central Government under sub-section (1) of Section 148 of the Act are not applicable for the year under audit.

7. a. According to the information and explanation given to us, the Company is depositing undisputed statutory dues with appropriate authorities, like Provident Fund, Employee's State insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Value Added Tax, Cess, wherever applicable, except few delays in depositing Income Tax TDS. There are no undisputed Statutory outstanding dues as at 31st March, 2015 for a period of more than six months from the date they become payable, except TDS on Interest amounting to Rs.203.71 lakhs pending for payment for 15 months.

b. According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess which have not been deposited on account of any dispute except IT demand for AY 2008- 09 Rs.19.21 lakhs, for AY 2010-11 Rs.11464.23 lakhs pending before CIT(A), Chennai and Service Tax penalty Rs.34.34 lakhs for the period Oct 2009 to Oct 2010 pending before CCE(A), Chennai.

c. According to the information and explanation given to us, there are no amount required to be transferred to investor education and protection fund in accordance with the provisions of the Act.

8. In our opinion and according to the information and explanation given to us the accumulated losses as at the end of the financial is more than 50% of networth. The Company has not incurred cash losses during the financial year covered by our audit and incurred cash losses during the immediately preceding financial year.

9. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institutions or banks or debenture holders.

10. In our opinion and according to the information and explanation given to us, the Company has given security of land for loans taken by others from financial institutions and the terms and condition whereof are not prejudicial to the interest of the company.

11. In our opinion and according to the information and explanation given to us, the term loans borrowed by the Company were applied for the purpose for which the loans were obtained.

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

for M/s CNGSN & ASSOCIATES LLP CHARTERED ACCOUNTANTS Firm Registration No: 004915S

Place: Chennai

Date : 27th May, 2015

R.THIRUMALMARUGAN

Partner Membership No: 200102


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the Act). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. These procedures selected depend on the auditor''s judgment, including the assessment of the risk of material misstatement 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 procedures that are appropriate in the circumstances but not for the purpose of 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 the accounting estimates made by the 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 audit opinion.

Opinion

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

a) In the case of the Balance Sheet, of the State of Affairs of the Company as at March, 31, 2014;

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

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

Emphasis of Matter

We draw attention to Note 25.10.c in notes to the financials with regard to the Income Tax demands disputed before the authorities, which describes the uncertainty related to the outcome of the Appeals filed against the Orders of the Authorities. Our opinion is not qualified in respect of these matters.

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 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 the 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 sub-section (3C) of Section 211 of the Act;

e. on the basis of written representation 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 Act;

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 Act, nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements in our Independent Auditors'' Report of even date)

1. a. In our opinion and according to the information and explanations given to us, the company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets, which needs to be updated.

b. As per the information and explanations provided to us, the company has conducted physical verification of the fixed assets during this year and the discrepancies noticed on such verification were properly dealt with in the books of account.

c. As per the information and explanation provided to us, substantial part of fixed assets have not been disposed off during the year, which affects the going concern.

2. a. According to the information and explanations given to us, the management has conducted physical verification of inventory-Land during this year.

b. According to the information and explanations given to us the procedures of physical verification of inventory-Land followed by the management is reasonable and adequate in relation to the size of the company and nature of its business.

c. According to the information and explanation given to us the company is maintaining proper records of inventory-Land and there are no discrepancies were noticed on such physical verification.

3. a. According to the information and explanations given to us, the Company has granted, unsecured loans to a company, a party covered in the register maintained under section 301 of the Companies Act, 1956. It is informed that these advances are recoverable on demand and the year end balance is Rs.60.74 lakhs. The other clauses are not applicable.

b. According to the information and explanations given to us, the Company has taken unsecured interest free loan from two companies, the parties covered in the register maintained under section 301 of the Companies Act, 1956 The balance outstanding is Rs.1229.09 lakhs. The other clauses are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business, for purchases of inventory and fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls systems.

5. a. According to the information and explanations given to us, the particulars of contracts or arrangements entered into during this year which are required to be entered in the register maintained under section 301 of the Companies Act have been entered in the said register.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanation given to us the Company has not accepted deposits from public during this year. Therefore the provisions of section 58A, 58AA of the Act and any contravention of these provisions for the year under audit are not applicable.

7. The Company has an internal audit system, which needs to be strengthened to commensurate with its size and nature of its business.

8. As per the information and explanations given to us and as represented by the company the maintenance of cost records pursuant to the Rules made by the Central Government under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 are not applicable for the year.

9. a. According to the information and explanation given to us, the Company is depositing undisputed statutory dues like PF, ESI, Income Tax, TDS and Service Tax. There are no undisputed Statutory outstanding dues as at the 31st March, 2014 for a period of more than six months from the date they become payable.

b. According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess which have not been deposited on account of any dispute.

c. According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, services tax, excise duty and cess which have not been deposited on account of any dispute except Income Tax demand for AY 2008-2009 Rs.19.21 lakhs and Rs.11464.23 lakhs for AY 2010-11 disputed before CIT(A).

10. As per the information and explanation given to us the accumulated loss of the company is more than 50% of the networth as at the balance sheet date. The company has incurred cash losses during the financial year covered by our audit. The company has not incurred cash losses during immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to the financial institutions, banks and debenture holders.

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanation given to us the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provision of clause 4 (xiii) of the Companies (Auditor''s Report) (Amendment) Order, 2004 are not applicable to the Company.

14. In our opinion and according to the information and explanation given to us 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) (Amendment) Order, 2004 are not applicable to the Company.

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

16. In our opinion and according to the information and explanation given to us, the company has not obtained any term loans during the year.

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

18. According to the information and explanation given to us the Company has not made any preferential allotment of shares during the year.

19. According to the information and explanation given to us, the Company has not issued any secured debentures during the year and creation of security for issue of debenture does not arise.

20. According to the information and explanation given to us, the Company has not raised money by public issue during the year and disclosure of end use of public issue does not arise.

21. According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for M/s CNGSN & ASSOCIATES CHARTERED ACCOUNTANTS Firm Registration No: 004915S

Place: Chennai Date : 30th May, 2014

R.THIRUMALMARUGAN Partner Membership No: 200102


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Binny Limited (the Company), which comprises the Balance Sheet as at March, 31 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (the Act). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. These procedures selected depend on the auditor''s judgment, including the assessment of the risk of material misstatement 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 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 the 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 qualified audit opinion.

Basis for Qualified Opinion:

Attention of is drawn to the following material matters:

i. The Wealth Tax Officer has passed an Assessment Order for the Asst years 1993-94 to 2010-11 demanding a sum of Rs.2553.77 lakhs treating some of the assets of the company are subject to taxable wealth as per the provisions of the Wealth Tax Act. However the management has disputed the same and filed the Appeals on the Assessment Orders before the appellate authorities and there has also been payment of Rs.648.66 lakhs under protest, which are shown as Other Current Assets. Considering the disputed demands the Company has not provided for these Wealth Tax demands in the financial statements;

ii. The company holds Investments Rs.2874.81 lakhs in the Equity Shares of a Subsidiary Company and Loans and Advances made to the same Company Rs. 1148.52 lakhs. The management considers

the investment as a long term investment and has not provided for the diminution in value of these investments and carrying value of loans and advances at cost. However it is seen that the Networth of the Subsidiary Company has eroded, no operational activities carried on for few years, and other related factors indicates the material uncertainty about the going concern of the Subsidiary and possible permanent diminution in carrying these investments and loans and advances at cost.

iii. Non-confirmation of balances as on 31st March, 2013 from trade receivables, trade payables, loans and advances, Other long term borrowings, Other Loans and Advances, wherein the outstanding balances are due for more than three years and any adjustment to be made for the carrying amount at the year end is not ascertainable.

Without considering items mentioned in paragraph (iii) the effect of which could not be ascertained and had the observation in Para (ii) and (iii) been considered, (a)the net profit for the year would have been Net Loss of Rs.(-)6137.73 lakhs as against reported profit of Rs.439.37 lakhs; (b)Non-Current Investments would have been Rs.4.03 lakhs as against reported amount of Rs.2878.84 lakhs; (c) Long Term Loans & Advances would have been Rs.784.16 lakhs as against reported amount of Rs.1932.68 lakhs; and (d) Short Term Provisions would have been Rs.2657.26 lakhs as against reported amount of Rs. 103.49 lakhs.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except to the possible effects of matters described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the State of Affairs of the Company as at March, 31, 2013;

b) In the case of 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 Flows for the year ended on that date

Emphasis of Matter

We draw attention to Note 23.11 in notes to the financials with regard to the Income Tax demands disputed before the authorities, which describes the uncertainty related to the outcome of the Appeals filed against the Orders of the Authorities. Our opinion is not qualified in respect of these matters.

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

d. except for the possible effects of the matter described in Basis for Qualified Opinion paragraph, in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the accounting standards referred to sub-section (3C) of Section 211 of the Act;

e. on the basis of written representation 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 Act;

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 Act, 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.

(Referred to in paragraph 1 of Report on Other Legal and Regulatory Requirements in our Independent Auditors'' Report of even date)

1. (a) The Company has to update the schedule of Fixed Assets.

(b)The fixed assets have not been verified by the management at reasonable intervals. The discrepancies (between physical verification and book records) and accounting for such discrepancies does not arise.

(c)There are no disposals of substantial assets during this year.

2. (a) The inventory has been physically verified by the management during this year.

(b)The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

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

3. (a) According to the information and explanations given to us, the company has granted unsecured interest free loans to a Subsidiary Company, which is repayable on demand. The year-end balance of loan granted was Rs.1148.52 lakhs. The other clauses are not applicable. (b)According to the information and explanations given to us, the Company has taken unsecured interest free loan from two group companies, repayable on demand, the party covered in the register maintained under section 301 of the Companies Act, 1956. The balance outstanding is Rs.5323.53 lakhs. The other clauses are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business, for purchases of fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls systems.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register maintained under that section.

(b)In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. As explained to us, the Company has not accepted deposits from public during this year.

7. The Company has an internal audit system, which needs to be strengthened to commensurate with the size of the Company and the nature of its business.

8. As per the information and explanations given to us, the company has to update the cost records, for the process activities, as prescribed by the Central Government under clause (d) of sub-section

(1) of Section 209 of the Companies Act, 1956.

9 a. According to the information and explanation given to us, the Company is depositing undisputed statutory dues, like Provident Fund, Employees Pension Fund and Employees State Insurance with some delays.

b. There are no undisputed Statutory dues like Investor Education and Protection Fund, Wealth Tax, Service Tax, Customs Duty, and other statutory dues except Excise Duty Rs.0.37 lakhs and Property /Urban Land Tax Rs.173.21 lakhs as at 31st March, 2013 for a period of more than six months from the date they become payable.

c. According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, services tax, excise duty and cess which have not been deposited on account of any dispute except Income Tax demand for AY 2008-2009 Rs.19.21 lakhs and Rs.11464.23 lakhs for AY 2010-11 disputed before CIT(A) and Wealth Tax demand for the asst year 2004-05 to 2010-11 Rs.1060.18 lakhs disputed before CWT(A) and asst year 1993-94 to 2003-04 Rs.1493.59 lakhs disputed before ITAT, Chennai.

10. In our opinion, there are no accumulated losses of the Company as at the year end. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations to us, the company has not defaulted in repayments of dues to the financial institutions, bank and debenture holders

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. There fore, the provision of clause 4 (xiii) of the Companies (Auditor''s Report) (Amendment) Order, 2004 are not applicable to the Company.

14. 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) (Amendment) Order, 2004 are not applicable to the Company.

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

16. In our opinion and according to the information and explanation given to us, the Company has not obtained any term loans during the year.

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

18. According to the information given to us, the Company has not made preferential allotment of shares during the year to parties covered in the register maintained under Sec.301 of the Companies Act, 1956.

19. According to the information and explanation given to us, the Company has not issued any debentures during the year and creation of security for issue of debenture does not arise.

20. According to the information and explanation given to us, the Company has not raised money by public issue during the year and disclosure of end use of public issue does not arise.

21. According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

for M/s CNGSN & ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration No: 004915S

Place: Chennai

Date : 29th May, 2013

R.THIRUMALMARUGAN

Partner

Membership No: 200102


Mar 31, 2012

1. We have audited the attached Balance Sheet of Binny Limited as at 31st March 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed there to. 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 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 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 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)(Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we give 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 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 such 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, the Statement of Profit and Loss and the Cash Flow Statement dealt 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 representation received from the Directors and taken on record by the Board of Directors, we report that, none of the Directors are disqualified as on 31/03/2012 from being appointed as a Director in terms of clause (g) of sub-section (I) of section 274 of the Companies Act, 1956.

f) A ttention is drawn to the following material matters:

i. Non provision of wealth tax liability Rs.977.24 lakhs and Income Tax liability Rs. 19.21 lakhs as stated in Note 23. II;

ii. Non provision of diminution in value of investment in Subsidiary Company Rs.2874.81 Lakhs and Loans and Advances to Subsidiary Company Rs. 435.49 lakhs as stated in Note 23.4;

iii. Non-confirmation of balances as on 31st March 2012 from Trade receivables, trade payables, loans & advances, Other long term borrowings and Other Loans and Advances.

Without considering items mentioned in paragraph 4(f) (iii) the effect of which could not be ascertained and hence we are unable to express any opinion on these matters and had the observation in Para 4 F (i) and (ii) been considered, (a)the net profit for the year would have been Net Loss of Rs. (-)4079.42 lakhs as against reported profit of Rs.227.33lakhs; (b)Non-Current Investments would have been Rs.4.03 lakhs as against reported amount of Rs.2878.84 lakhs; (c) Long Term Loans & Advances would have been Rs.8I7.33 lakhs as against reported amount of Rs. I252.82lakhs; and (d) Short Term Provisions would have been Rs.I082.45 lakhs as against reported amount of Rs. 86.00 lakhs.

g) In our opinion and to the best of our information and according to the explanations given to us the said accounts read with the accounting policies and notes thereon, subject to the remarks stated in Para (f)above, give the information required by the Companies Act, I956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

iv. In the case of Balance Sheet, of the State of Affairs of the Company as at 3Ist March 20I2,

v. In the case of Statement of Profit and Loss, of the PROFIT of the Company for the year ended on that date; and

vi. In the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

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

1. (a) The Company is maintaining schedule of Fixed Assets, showing full particulars, which needs to be updated.

(b) The fixed assets have not been verified by the management at reasonable intervals. The discrepancies (between physical verification and book records) and accounting for such discrepancies does not arise.

(c) There are no disposals of substantial assets during this year.

2. (a) The inventory has been physically verified by the management during this year.

(b) The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

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

3. (a) According to the information and explanations given to us, the company has granted unsecured interest free loans to a Subsidiary Company, which is repayable on demand. The year-end balance of loan granted was Rs.435.49 lakhs. The other clauses are not applicable.

(b) According to the information and explanations given to us, the Company has taken unsecured interest free loan group company, repayable on demand, a party covered in the register maintained under section 30I of the Companies Act, I956. The balance outstanding is Rs.3930.I2 lakhs. The other clauses are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and the nature of its business, for purchases of fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls systems.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 30I of the Companies Act, I956 have been entered in the register maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. As explained to us, the Company has not accepted deposits from public during this year.

7. The Company has an internal audit system, which needs to be strengthened to commensurate with the size of the Company and the nature of its business.

8. As per the information and explanations given to us, the company has to update the cost records, for the process activities, as prescribed by the Central Government under clause (d) of sub-section (I) of Section 209 of the Companies Act, I956.

9 a. According to the information and explanation given to us, the Company is depositing undisputed statutory dues, like Provident Fund, Employees Pension Fund and Employees State Insurance with some delays.

b. There are no undisputed Statutory dues like Investor Education and Protection Fund, Wealth Tax, Service Tax, Customs Duty, and other statutory dues except Excise Duty Rs.0.37 lakhs and Property /Urban Land Tax Rs.239.9I lakhs as at 3I st March, 20I2 for a period of more than six months from the date they become payable.

c. According to the information and explanation given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, services tax, excise duty and cess which have not been deposited on account of any dispute except Income tax demand for AY 2008-2009 Rs.I9.2I lakhs disputed before CIT(A) and wealth tax demand for 2005-06, 2006-07, 2007-08, 2008-09, 2009-I0, 20I0-II, Rs.977.24 lakhs disputed before CWT(A).

10. In our opinion, the accumulated losses of the Company are not more than 50% of its net worth. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayments of dues to the financial institutions, bank and debenture holders.

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provision of clause 4 (xiii) of the Companies (Auditor's Report) (Amendment) Order, 2004 are not applicable to the Company.

14. 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) (Amendment) Order, 2004 are not applicable to the Company.

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

16. In our opinion and according to the information and explanation given to us, the Company has not obtained any term loans during the year.

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

18. According to the information given to us, the Company has not made preferential allotment of shares during the year to parties covered in the register maintained under Sec.30I of the Companies Act, I956.

19. According to the information and explanation given to us, the Company has not issued any debentures during the year and creation of security for issue of debenture does not arise.

20. According to the information and explanation given to us, the Company has not raised money by public issue during the year and disclosure of end use of public issue does not arise.

21. According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For M/s CNGSN & ASSOCIATES

CHARTERED ACCOUNTANTS

Firm Registration No:0049I5S

Place : Chennai

Date : 1st September 2012

R.THIRUMALMARUGAN

Partner

Membership No.200102


Mar 31, 2010

1. We have audited the attached Balance Sheet of Binny Limited as at 31st March 2010 the Profit and Loss Account and also the Cash Flow Statement for the period ended on that date annexed there to. 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 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 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 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)(Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we give 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 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 such books;

c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this Report are in agreement with the Books of Account;

d) In our opinion the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt by this report, comply with the Accounting Standards referred to in Sub-section (3C) of Section 21 I of the Companies Act, 1956.

e) On the basis of written representation received from the Directors, as on 3 I /03/2010 and taken on records by the Board of Directors, we report that, none of the Directors are disqualified as on 31 /03/2010 from being appointed as a Director in terms of clause (g) of sub-section (I) of section 274 of the Companies Act, 1956.

f) Attention is drawn to the following material matters:

i. Note 6 in notes on accounts of Schedule 14, with regard to the adjustment of Rs. 2478626 thousands against the Revaluation Reserve;

ii. Non-confirmation of balances as on 31" March, 2010 from Debtors, Loans and Advances, and Sundry Creditors vide Note No. 13 in notes on accounts of Schedule 14, consequent effect, if any, on the financials are not. quantifiable; and

iii. Non provision of wealth tax liability, if any, as stated in Note 16 in notes on accounts of Scheduled, consequent effect, if any, on the financials are not quantifiable;

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

i. In the case of Balance Sheet, of the State of Affairs of the Company as at 3 Ist March 2010,

ii. In the case of Profit and Loss Accounts, of the LOSS of the Company for the period ended on that date; and

iii. In the case of Cash Flow Statement, of the Cash Flows for the period ended on that date.

ANMEXURE TO AUDITORS REPORT (Referred to in Paragraph 3 of our Report of even date)

1. (a) The Company is maintaining proper records showing full particulars, which needs to be updated for the other details.

(b) The fixed assets have not been verified by the management at reasonable intervals. The discrepancies (between physical verification and book records) and accounting for such discrepancies does not arise.

(c) The Company transferred some of the fixed assets to the resulting companies as per the sanctioned scheme of demerger by the High Court of Chennas and also has disposed off substantial amount of fixed assets(Piant and Machinery) during the period which we were informed that does not affect the " Going Concern Concept" of the Company.

2. (a) The inventory has been physically verified by the management at reasonable intervals.

(b) The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

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

3. (a) According to the information and explanations given to us, the company has granted unsecured interest free loans to

Subsidiary Company repayable on demand a party covered in the register maintained under section 301 of the Companies Act, 1956. The total number of party is one and the year-end balance of loan granted was Rs. 22136 thousands. The other clauses are not applicable.

(b) As stated in the Note 8 the unsecured loans from Promoters and related parties were reconciled and as per the sanctioned scheme of demerger some of the loans were converted into Preference Shares-pending allocation. As at the year end the amount outstanding is Rs.38226! thousands. The other clauses are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal centre! systems commensurate with the s,ze of the company and the nature of its business, for purchases of fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls systems.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or

arrangements referred to in section 30 i of the Companies Act, 1956 have been entered in the register maintained under that section.

(b) if) our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. As explained to us that the Company has not accepted deposits from public during this period.

7. The Company has an internal audit system, which need to be strengthened to commensurate with the size of the Company and the nature of its business.

8. There was no production activity carried out during the period. As explained to us the company is no more in the business of manufacture of textiles activity, further the company has been demerged into two other companies as per the sanctioned scheme of demerger. Based on this development it is explained that the maintenance of cost records is not applicable to the company for the period under audit.

9. a. According to the information and explanation given to us, the Company: is depositing undisputed statutory dues with approprlate authorities, like Provident Fund, Employees Pension Fund and Employees State Insurance with some delays. There are no undisputed Statutory dues like Investor Education and Protection Fund, Wealth Tax, Service Tax, Customs Duty and other statutory dues, except Excise Duty Rs 37 Thousands, and Property/Urban Land Tax Rs.32489 Thousands as at 3 1st March, 2010 for a period of more than six months from the date they become payable.

b. According to the information and explanation given to us, there are no dues of sales tax, income tax, custom duty, wealth tax, sen/ices tax, excise duty and cess which have not been deposited on account of any dispute.

10, In our opinion, the accumulated losses of the Company are not more than 50% of its net worth. The company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to the financial institutions, bank and debenture holders.

12. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

13. in our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. There fore, the provision of clause 4 (xiii) of the Companies (Auditors Report) (Amendment) Order, 2004 are not applicable to the Company.

I 4. 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) (Amendment) Order, 2004 are not appiicabie to the Company.

15. in our opinion and according to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks / financial institutions.

16. in our opinion and according to the information and explanation given to us, the Company has not obtained any term loans during the period.

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

18. According to the information given to us, the Company has not made any preferential allotment of shares during the period to parties covered in the register maintained under Sec.301 of the Companies Act, 1956.

19. According to the information and explanation given to us, the Company has not issued any debentures during the period and creation of security for issue of debenture does not arise.

20. According to the information and explanation given to us, the Company has not raised money by public issue during the period and disclosure of end use of public issue does not. arise.

21, According to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the course of our audit,



For M/s CNGSN & ASSOCIATES CHARTERED ACCOUNTANTS

R.THIRUMAlMARUGAN PARTNER

Place: Chennai Membership No.200102

Date: 25th August, 2010 Firm Registration No.0049l5S

 
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