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Auditor Report of Birla Transasia Carpets Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Birla TranAsia Carpets Limited ("the Company"), which comprises the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss and Cash Flow Statement for the year ended and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the financial statements

The Company's Board of Directors is responsible for the matters 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 flow 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors 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 there under.

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

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

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

Basis of Qualified Opinion

1. Attention is invited to Note 6 on Long Term Provisions. Accounting Standard (AS) 15 - Employee Benefits (Revised 2005) requires the provisioning of retirement benefits based on actuarial valuation of retirement benefits and additional disclosures as required in terms of AS-15. The management has made the provisions based on their own estimates.

2. Note No. 5 and 7 of Notes to Financial Statements with regard to non-provision of interest on Inter Corporate Loans, (amount unascertained) and PICUP loans (amounting to Rs 2,67,34,127/- up to 31st March, 2013 and interest amount uncertain from 1st April 2013 to 31st March 2015) resulting into understatement of loss for the year. Similarly non-accounting of interest liability resulting in to understatement of current liabilities as on 31-03-2015 to the same extent.

3. Sundry Debtors/Creditors, unsecured loan and advances have been considered as good for recovery/payable by the management. Also are subject to confirmation and reconciliation. A detailed analysis of actual recoverability/payable which is overdue according to normal operating cycle of the company should be quantified and necessary provision need to be made. The non creation of provision for debts and interest are resulted into under/over statement of balances and loss. (Also Refer Notes on 5, 7, 8, 9, 11, 14, 16 and 28 to Financial Statements).

4. No provision has been made for contingent liabilities as defined under AS 29 are summarized in Note No. 25 to Notes to Financial Statements.

Qualified Opinion

In our opinion and to the best of our knowledge and according to the information and explanations given to us, except for the effects of the matters described in paragraphs 1 to 4 of the Basis for Qualified Opinion paragraph, the said 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, 2015,

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:

Attention is invited to regarding the financial statements being prepared on a going concern basis, notwithstanding the fact that the Company's net worth is eroded. Net worth as at March 31, 2015 is negative Rs.39,89,08,950. The company has referred to BIFR on 04/11/1991. Although the final order has not been passed by the BIFR and it is pending since long. The latest communication was dated 21/11/2013. These facts cast a significant doubt on the ability of the Company to continue as a going concern as rescheduling of debt, Loans, other liabilities and resuming normal operations. Our opinion is not modified in this respect.

Report on other legal and regulatory requirements

1. As required by the Companies (Audit Report) Order, 2015 ('the Order) issued by the Central Government of India in terms of sub-section (11) of section 143 of Act, we give in the Annexure a statement on the matters specified in the paragraph 3 & 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 accounts as required by law have been kept by the company so far as it appears from our examination of those books.

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

d. In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the accounting standards specified under section 133 of the Act; except for the effects of matters described in the Basis for Qualified Opinion paragraph

e. On the basis of written representations received from the directors, we report that none of the directors is disqualified as on 31st March 2015, from being appointed as a director in terms of section 164(2) Act.

f. With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us -

i. As mentioned in the Basis for Qualified Opinion paragraph, The Company has disclosed the pending litigations on its financial position in its financial statements as contingent liability. However, no provision has been made for contingent liabilities as defined under AS 29 are summarized in Note No. 25 to Notes to Financial Statements pertaining to disputed liabilities.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts except for pending litigation as mentioned in Point (i) above.

iii. There was no liability towards amount required to be transferred, to the Investor Education and Protection Fund by the Company

Annexure to Audit Report

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the financial statements for the year ended 31st March, 2015, we report that:

i. FIXED ASSETS

a) The company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets;

b) As explained to us, the assets have been physically verified by the management in accordance with a phased program of verification of its fixed assets adopted by the Company which, in our opinion, is reasonable, considering the size and the nature of its business. No material discrepancies have been noticed on such physical verification;

ii. INVENTORY

a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals;

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

c) In our opinion and according to the information and explanations given to us and records produced before us, the company is maintaining proper records of its inventories and no material discrepancy has been observed by the management during the course of verification;

iii. LOANS AND ADVANCES GRANTED

The Company has not granted any Loans, Secured or Unsecured to Companies, Firms or other parties covered under register maintained under section 189 of the Act. Accordingly this clause is not applicable to the Company

iv. INTERNAL CONTROL SYSTEM

In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

However, in our opinion the company does not have an Internal Audit System commensurate with the size & nature of the business resulting in non compliance of Sec 138 of the Act.

v. ACCEPTANCE OF DEPOSITS

In our opinion and according to information and explanations given to us, the company has not accepted any deposits from public during the year. Hence the provisions of section 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 1975 are not applicable to the company.

vi. COST RECORDS

The Central Government has not prescribed maintenance of cost records under section 148 of the Companies Act, 2013 for any of the products of the Company;

vii. STATUTORY DUES

a) According to the information and explanations given to us following are the undisputed amounts of

Provident Fund, Excise Duty and Sales tax etc. payable as on 31st March, 2015 and due for a period of

more than six months from the date they become payable and provided for in the books of accounts:

Period for Name of the Statute Nature of the Amount which the dues (Rs.)* amount Due relates

Excise 13,32,900 2003-04 Duty 2004-05

Central Excise Act, Interest 7,06,000 2003-04 1944 Interest 7,70,000 2004-05

Interest 4,56,718 2005-06

Interest 2,08,293 2006-07

Sales Tax Sales Tax 14,67,631 2004-05 Act,1975

Fringe Benefit Tax FBT 53,005 2006-07

FBT 1,31,438 2008-09

The Income Tax Act, TDS u/s 194J 1,59,932 2014-15 1961 TDS u/s 192 61,700 2014-15

Name of the Statute Due date Date of payment

31.03.2005 Not Paid

Central Excise Act, Up to 31.03.04 Not Paid 1944 Up to 31.03.05 Not Paid

Up to 31.03.06 Not Paid

Up to 31.03.07 Not Paid

Sales Tax 31.03.2005 Not Paid Act,1975

Fringe Benefit Tax 31.03.200 Not Paid

15.12.2008 Not Paid

The Income Tax Act, 30.04.2015 Not Paid 1961 30.04.2015 Not Paid

* Above amounts are subject to interest on overdue and penalty.

b) According to the information and explanations given to us and as per our verification of records of the company, the following disputed amounts of tax not provided for in the accounts of the company has not been deposited with appropriate authority as at 31st March, 2015:

Name of the Nature of Amount (Rs.) Period to which Statute the Dues the amount relates

28,75,017 1998-99

9,545 2001-02

75,196 2004-05

14,53,367 2005-06

UP Sales Tax Sales Tax 8,59396 2556-97

5,04,180 2007-08

12,890 2009-10

71,419 2010-11

90,903 2011-12

1,14,038 1985-86

68,956 1990-91

1,09,656 1993-94

1,73,753 1994-95

39,004 1995-96

1,18,144 1996-97

Delhi Sales Tax sales tax 87,794 1997-98 Act, 1975 16,02,224 1998-99

25,66,329 1999-00

7,38,160 2000-01

1,22,840 2001-02

12,536 2002-03

1,22,840 2003-04

1,28,158 2004-05

Name of the Nature of Amount (Rs.) Forum where dispute Statute the Dues is pending

28,75,017 Joint Commissioner of Trade tax (Appeal), Uttar Pradesh.

9,545 Deputy Commissioner, Uttar Pradesh

75,196 —Do—--

14,53,367 —Do---

UP Sales Tax Sales Tax 8,59396

5,04,180 —Do---

12,890 —Do---

71,419 —Do---

90,903 —Do---

Deputy Commissioner of Sales tax 1,14,038 (Appeal), Delhi

68,956 —Do—--

1,09,656 —Do—--

1,73,753 —Do---

39,004 —Do—--

1,18,144 —Do—--

Delhi Sales Tax sales tax 87,794 —Do—-- Act, 1975 16,02,224 —Do---

25,66,329 —Do---

7,38,160 —Do---

1,22,840 —Do---

12,536 —Do---

1,22,840 —Do---

1,28,158 —Do---

Central Excise Act, 1944

i) One appeal filed at Appellate Tribunal, New Delhi on 06/10/2009 for Rs. 17,25,392/- with interest from the date of payment till the refund being granted. It is still pending before the adjusting authority.

ii) Contempt Petition filed against Excise Department at Allahabad High Court against our refund of Rs. 17,25,392/- against the order of Supreme Court in our favor. Summons issued to concerned authority.

PROVIDENT FUND

In the matter of the proceedings under section 14-B & 7-Q of the Employee's Provident Fund & Misc. Provisions Act, 1952 and imposed the damages & interest for the period from 12/1997 to 11/2001 amounting Rs. 21,73,215/- and Rs. 7,43,883/- respectively for which Stay was taken Before the Hon'ble Employee's Provident Fund Appellate Tribunal, New Delhi. After several hearings the case was dismissed in favor of P.F. Commissioner however the final order was kept under ambiance.

1) Notice for interest payment from 10.06.2007 to 31.12.2014 (7Q) for M/ s. Gayatri Allied & Security Services of Panel Interest of Rs. 4, 08,964/- to be paid immediately. Hearing is in progress.

2) Pending deposit of P.F. for M/ s. Gayatri Allied & Security Services from October 13 to December 14 Rs.2,68,553/- to be Paid.

INCOME TAX

Income Tax Act. Demand 4,867,100/- 1997-98

Income Tax Act. Demand 200,887/- 2001-02

Income Tax Act. Demand 171,201/- 2005-06

Income Tax Act. Demand 10,533,346/- 2007-08

Income Tax Act. Joint Commissioner of Income Tax, New Delhi.

Income Tax Act. Deputy Commissioner of Income Tax, New Delhi.

Income Tax Act. Assistant Commissioner of Income Tax, New Delhi.

Income Tax Act. Deputy Commissioner of Income Tax, New Delhi.

1) A demand of Rs. One Crore five Lacs raised by Income Tax department (for AY 2008-2009) and approached to BIFR for recovery last hearing was on 21.11.2013 case pending with BIFR. Documents submitted by BTCL and case was remanded and referred to Ward for their comments.

2) Case for scrutiny AY - 2012 - 13 required documents submitted to department some documents to be received from Mumbai Office. Next date of hearing is on 17/12/2014. Required details submitted on 19.02.2015 final Hearing was conducted on 24/02/2015. The final ruling is awaited.

E.S.I.C

Particular Amount

Employees State Insurance Corporation Dues 23,51,993/-

Speaking Order no. K/INSP/II/67 - 7713 - 11 dated 20.04.11 in the form of C - 18 for the period from May 2006 to March 2011 in the tune of Rs. 23,51,993/- Appeal submitted to Joint Director Sub- Reginal Office Noida. Recd Notice from department dated 17.02.15 regarding per person hearing on 24.02.2015.

Trade Tax

Particular Year Amount

Appeal pending before Jt. commissioner of 2000-01 43,29,922 Trade Tax, Uttarakhand 2000-01 43,29,922

viii. ACCUMULATED LOSSES

The accumulated losses/Reserves of the company are more than fifty percent of its Equity Capital amounting to Rs. 42,72,59,240/-. The company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year. Company has referred to BIFR on 04/11/1991. The final order is yet to be passed.

ix. DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS

The Company had procured loan from The Pradeshiya Industrial and Investment Corporation of U.P. Ltd. (PICUP) which is having a Balance Outstanding as on year end of Rs. 1,47,00,125 towards principal which is overdue. Also, the interest payable thereon has not been accounted which is resulting in understatement of liability.

x. GUARANTEES GIVEN

As per the information and explanation given to us and records produced before us, Company has not given any guarantee for loans taken by others from Bank or Financial Institution and accordingly, this clause is not applicable to the Company;

xi. TERM LOANS

The Company has not taken any term loan during the year.

xii. FRAUD NOTICED

During the course of our examination of the books and records of the Company, carried out in accordance with generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by management.

For LKM & Co.

Firm Registration Number - 126823W Chartered Accountants Laxmikant Malpani (Proprietor) Place: Mumbai Membership Number - 106989 Date: 29th May, 2015


Mar 31, 2010

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

2. We conducted our audit in accordance with auditing standards generally accepted in In- dia. Those standards require that we plan and perform the audit to obtain reasonable as- surance about whether the financial state- ments are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and dis- closures in the financial statements. An au- dit also includes assessing the accounting principles used and significant estimates made by the management, as well as evalu- ating the overall financial statement presen- tation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure re- ferred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were neces- sary for the purpose of our audit.

(ii) In our opinion, proper books of accounts as required by law have been kept by the company so far as it appears from our examination of those books.

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

(iv) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow State- ment dealt with by this report comply with the accounting standards referred to sub-section (3C) of section 211 of the Companies Act, 1956; except Account- ing Standard (AS) 15 - Employee Ben- efits (Revised 2005) requiring of provi- sioning of retirement benefits based on actuarial valuation of retirement ben- efits and additional disclosures as re- quired in terms of AS-15. The manage- ment has made the provisions based on their own estimates.

(v) On the basis of written representations received from the directors, we report that none of the directors is disqualified as on 31st March 2010, from being ap- pointed 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 expla- nations given to us, the said accounts read together with the significant Ac- counting Policies and Notes of Accounts in schedule U and else were in Accounts subject to :

(a.) Note No.7 of Schedule T of Notes to Accounts with regard to non- provision of interest on Inter Corporate Loans and PICUP loans resulting into under- statement of loss for the year, amount unascertained. Simi- larly non-accounting of inter- est liability resulting in to un- derstatement of current liabili- ties as on 31-03-2010 to the same extent.

(b.) Sundry Debtors/Creditors have been considered as good for recovery/payable by the management: A detailed analy- sis of actual recoverability/payable of sundry debtors/creditors which are due for more than six month should be made and necessary provision which is yet to be quan- tified will be required.

Given 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 gener- ally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

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

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

Annexure referred to in paragraph 3 of our report of even date.

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

(b) All the assets have been physically verified by the management during the year and there is a regular program 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) In our opinion and according to the information and explanation given to us, the company has not disposed off any fixed assets during the year.

(ii) (a) The inventory of Raw Materials, Stores & Spares, Finished Goods and other items have 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.

(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. Old damaged stock due to moth and rains lying with company amounting to Rs.57,00,126/- has been destroyed during the year, accordingly reduced from the value of closing stock.

(iii) (a) The Company has not granted any Loans, Secured or Unsecured to Companies, Firms or other parties covered under register maintained under section 301 of the Act. Accordingly provisions of clause (iii)(b), (iii)(c) and (iii)(d) of the Order are not applicable to the Company

(b) According to information and explanations given to us the company has taken unsecured loan from companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 3301.88 lacs and year end balance of such loan taken were Rs. 3301.88 lacs excluding interest on such loans, amount of interest unascertained in respect of such Companies

(c) In our opinion, the rate of Interest and other terms and conditions of such loans are not prima facie prejudicial to the interests of the Company

(d) According to information and explanation given to us in respect of such loans taken by Company, no stipulations have been made regarding payment of principal and interest there on.

(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. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls and its needs to further strengthen.

(v) According to the information and explanation given to us, we are of the opinion that there was no transaction that needs to be entered into the register maintained under section 301 of the Companies Act, 1956.

(vi) In our opinion and according to the information and explanations given to us, the company has not accepted any deposit from public during the year. Hence, the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975, are not applicable to the company.

(vii) The company has an internal audit system the scope and coverage of which is in our opinion requires to be further enhanced to be commensurate with its size and nature of its business. The company have a formal Internal Audit System upto September 2009 only.

(viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 for the products of the company.

(ix) (a) According to the information and explanations given to us following are the undisputed amounts of Provident Fund, Excise Duty and Sales tax etc. payable

as on 31st March, 2010 and due for a period of more than six months from the date they become payable and provided for in the books of accounts :



Name of the Statute Nature of Amount Period for which Date of

the dues (Rs.) * the amount Due Date Payment

relates

Employees Provident Provident Fund

Fund and Miscellaneous Contribution 36680/- 2009-10 On 15th of Not Paid

Provisions Act, 1952 every month

Central Excise Act, 1944 Excise Duty 1332900/- 2003-04 & 31.03.2005 Not Paid

2004-05

Interest 706000/- 2003-04 Up to 31 .03.04 Not Paid

Interest 770000/- 2004-05 Up to 31. 03.05 Not Paid

Interest 456718/- 2005-06 Up to 31. 03.06 Not Paid

Interest 208293/- 2006-07 Up to 31. 03-07 Not Paid

Delhi Sales Tax Act,1975 Sales Tax 1490506/- 2004-05 31.03.2005 Not Paid

Fringe Benefit Tax FBT 54809/- 2006-07 31.03.2007 Not Paid

FBT 131438/- 2008-09 15.12.2008 Not Paid UP Sales Tax Sales Tax 4361/- 2009-10 31.03.2009 Not Paid

* On and above interest on overdue and penalty if any.

(b) According to the information and explanations given to us and as per our verification of records of the company, the following disputed amounts of Tax not provided for in the accounts of the company has not been deposited with appropriate authority as at 31st March, 2010.

Name of the Statute Nature of Amount Period for which Forum where dispute the dues (Rs.) the amount is pending

relates

UP sales tax Sales Tax 2,875,017/- 1998-99 Joint Commissioner of Trade tax

(Appeal), Uttar Pradesh.

Delhi Sales Tax Sales Tax 114,038/- 1985-86 Deputy Commissioner of Sales tax

Act, 1975 (Appeal), Delhi

68,956/- 1990-91 -Do-

109,656/- 1993-94 -Do-

173,753/- 1994-95 -Do-

39,004/- 1995-96 -Do-

118,144/- 1996-97 -Do-

87,794/- 1997-98 -Do-

1,602,224/- 1998-99 -Do-

2,566,329/- 1999-00 -Do-

738,160/- 2000-01 -Do-

122,840/- 2001-02 -Do-

153,361/- 2002-03 -Do-

440,128/- 2003-04 -Do-

12,536/- 2003-04 -Do-

128,158/- 2004-05 -Do-

Total 6475081/-

Central Excise Excise Duty on

Act, 1944 Raw Material

1,026,636/- Supreme Court of India.

Excise Duty on finished products

167,000/- Commissioner of Central Excise

(Appeals), Delhi.

TOTAL 1,193,636/-

Income Tax Act. Demand 4,867,100/- Joint Commissioner of Income

Tax, New Delhi.

1) One appeal filed at Appellate Tribunal, New Delhi on 06/10/2009 for Rs. 17,25,392.00 with interest from the date of payment till the refund being granted. It is still pending before the adjusting authority. No hearing till date.

2) Contempt Petition filed against Excise Department at Allahabad High Court against our refund of Rs. 17, 25,392.00 against the order of Supreme Court in our favor. Summons issued to concerned authority and the next date of hearing is awaited.

(x) The accumulated losses of the company are more than fifty percent 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.

(xl) In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to a financial institutions, banks or debenture

holders. Except one employee Loan not paid during the year and loan amount is Rs. 2.0,007/ - and EMI overdue.

(xii) We are of the opinion that the company has not granted any loans and advances on the basis of securities by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/ society. There- fore the provisions of clause 4(xiii) of the 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) Companies (Auditors Report) Order, 2003 are not applicable to the company

(xv) In our opinion, the terms and conditions on which the company has given guarantees for loans taken by others from banks or financial institution are not prejudicial to the interest of the company.

(xvi) The Company has not taken any term loan during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short- term assets except permanent working capital.

(xviii) According to the information and explanations given to us, the company has not made any 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 explanations given to us, during the period covered by our audit report, the company had not issued any debentures.

(xx) According to the information and explanations given to us, the company has not raised any money from the public.

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



For LKM & CO.

Chartered Accountants

Laxmikant Malpani

(Proprietor) M. No. 106989

Place: Mumbai

Dated: 17/05/2010



 
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