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Auditor Report of Caprolactam Chemicals Ltd.

Mar 31, 2014

I have audited the accompanying Financial Statements of Caprolactam Chemicals Limited ("the Company") which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that I comply with the 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 the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the 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. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion and to the best of my information and according to the explanations given to me, 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 31st March, 2014.

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies [Auditors report] Order 2003 ("the Order") issued by the Central Government of India in terms of section 227(4A) of the Act, I give in the Annexure a statement on the matters specified in the paragraph 4 and 5 of the said Order

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

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

b) In my opinion, proper books of account as required by law have been kept by the Company, so far as it appears from my examination of those books.

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

d) In my opinion, the Balance Sheet, Statement of Profit & 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 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure to Independent Auditor''s Report Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory requirements" of my report of even date

(1) In respect of Fixed Assets

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to me, these fixed assets have been physically verified by the management in a phased periodical manner. In my

opinion the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification.

(c) The Company has not disposed off any substantial part of it''s fixed assets so as to affect is going concern status.

(2) In respect of it''s Inventories;

(a) As explained to me, inventories have been physically verified by management at reasonable intervals during the year. In my opinion,

the frequency of such verification is reasonable.

(b) In my opinion and according to the information and explanations given to me, 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 has maintained proper records of inventory and discrepancies noticed on physical verification as compared to the

book records have been properly dealt with in the books of accounts.

(3) In respect of the Loans, secured or unsecured, granted or taken by the Company to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956;

(a) According to the information and explanation given to me, the Company has not granted any loans, secured or unsecured to

company, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraph 4 (iii) (b), (c) and (d) of the order are not applicable.

(b) The Company has taken unsecured loans from one party whose name is to be covered In the register maintained under section

301 of the Act. The Maximum amount involved during the year was Rs. 23,16,965/-and the balance outstanding as on 31st March, 2014 was 8,66,965/-.

(c) The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company.

(d) The Company has been regular in repaying principal amount wherever stipulated and the Company is also regular in payment of

interest wherever applicable.

(4) There is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of the inventory and fixed assets and for the sale of goods & services. During the course of my audit, I have not observed any continuing failure to correct major weaknesses in the internal control system.

(5) In respect of contracts or arrangements referred to in section 301 of the Companies act, 1956;

(a) According to the information and explanation provided by the management, I am of the opinion that all the particulars of contracts or arrangements that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

(b) According to the information and explanation provided by the management, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956. and exceeding the value of Rs. Five Lacs in respect of each party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(6) In my opinion and according to the information and explanations given to me, the Company has not accepted any deposits from the public.

(7) The Company has an adequate internal audit system, which in my opinion is commensurate with the size of the Company and the nature of its business however the company does not have a formal internal audit system.

(8) According to information/explanation given to me, the rules made by Central Government under clause (c) of Sub-section (1) of section 209 of the Companies Act 1956, are not applicable to the company.

(9) In respect of Statutory dues;

(a) According to the information & explanation given to me and the records of the company examined by me, In my opinion, the company is generally regular in depositing undisputed statutory dues including Provident fund, Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty Excise Duty, Cess & other statutory dues as applicable with appropriate authorities. According to the information & explanation given to me, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2014 for a period of more than six months from the date they becoming payable.

(b) According to the information & explanation given to me there are no disputed amount of statutory dues towards Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty Excise Duty, Cess that have not been paid to concerned authorities.

(10) The company has accumulated losses as at 31st March 2014 and has incurred cash losses during the financial year ended on that date but not in the immediately preceding financial year.

(11) According to the records of the company examined by me and information & explanation given to me and based on the audit procedure applied by me, the company has not defaulted in repayment of its dues to any financial institution or bank, as at the Balance Sheet date.

(12) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(13) The provisions of any special statute applicable to chit find / nidhi / mutual benefit/ societies are not applicable to the company.

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

(15) According to information & explanation given to me, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(16) According to information & explanation given to me, on an overall basis, prima facie, term loans were applied for the purpose for which the loans were obtained.

(17) According to the information & explanation given to me, and based on the examination of Balance Sheet of the Company, prima facie, the funds raised on short term basis have not been used for long term investment.

(18) According to the information and explanations given to me, 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 during the year.

(19) The company has not issued any secured debentures during the year, and accordingly, no securities were required to be created.

(20) The company has not raised any funds by way of a public issue during the year.

(21) During the course of my examination of the books of the accounts and records of the company and according to the information &explanation given to me, no material fraud on or by the Company, has been noticed or reported during the year.

JATIN SHAH Place: Mahad (CHARTERED ACCOUNTANT) Date: 30th May, 2014 MEMBERSHIP NO. 103858


Mar 31, 2013

Report on the Financial Statements

I have audited the accompanying Financial Statements of Caprolactam Chemicals Limited ("the Company") which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

My responsibility is to express an opinion on these financial statements based on my audit. I conducted my audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that I comply with the 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 the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the 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.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.

Opinion

In my opinion and to the best of my information and according to the explanations given to me, 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 31st March, 2013

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

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date. Report on Other Legal and Regulatory Requirements

1. As required by the Companies [Auditors report] Order 2003 ("the Order") issued by the Centeal Government of India in terms of section 227(4A) of the Act, I give in the Annexure a statement on the matters specified in the paragraph 4 and 5 of the said Order

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

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

b] In my opinion , proper books of account as required by law have been kept by the Company, so far as it appears from my examination of those books.

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

d] In my opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Act. On the basis of written representations received from the directors as on 31st March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

Annexure to Independent Auditor''s Report

Referred to in Paragraph 1 under the heading of" Report on Other Legal and Regulatory requirements" of my report of even date

(1) In respect of Fixed Assets

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to me, these fixed assets have been physically verified by the management in a phased periodical manner. In my opinion the frequency of verification is reasonable. No material discrepancies were noticed on such physical verification.

(c) The Company has not disposed off any substantial part of it''s fixed assets so as to affect is going concern status.

(2) In respect of it''s Inventories;

a) As explained to me, inventories have been physically verified by management at reasonable intervals during the year. In my opinion, the frequency of such verification is reasonable.

(b) In my opinion and according to the information and explanations given to me, 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 has maintained proper records of inventory and discrepancies noticed on physical verification as compared to the book records have been properly dealt with in the books of accounts.

(3) In respect of the Loans, secured or unsecured, granted or taken by the Company to/from Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956;

(a) According to the information and explanation given to me, the Company has not granted any loans, secured or unsecured to company, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, paragraph 4 (iii) (b), (c) and (d) of the order are not applicable.

(b) The Company has taken unsecured loans from two parties whose names are to be covered In the register maintained under section 301 of the Act. The Maximum amount involved during the year was Rs. 50,16,180/- and the balance outstanding as on 31st March, 2013 was Nil.

(c) The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company.

(d) The Company has been regular in repaying principal amount wherever stipulated and the Company is also regular in payment of interest wherever applicable.

(4) There is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of the inventory and fixed assets and for the sale of goods & services. During the course of my audit, I have not observed any continuing failure to correct major weaknesses in the internal control system.

(5) In respect of contracts or arrangements referred to in section 301 of the Companies act, 1956;

(a) According to the information and explanation provided by the management, I am of the opinion that all the particulars of contracts or arrangements that need to be entered into a register in pursuance of section 301 of the Act have been so entered.

(b) According to the information and explanation provided by the management, the transactions made in pursuance of such Contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956. and exceeding the value of Rs. Five Lacs in respect of each party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(6) In my opinion and according to the information and explanations given to me, the Company has not accepted any deposits from the public.

(7) The Company has an adequate internal audit system, which in my opinion is commensurate with the size of the Company and the nature of its business.

(8) According to information/explanation given to me, the rules made by Central Government under clause (c) of Sub-section (1) of section 209 of the Companies Act 1956, are not applicable to the company.

(9) In respect of Statutory dues;

(a) According to the information & explanation given to me and the records of the company examined by me, In my opinion, the company is generally regular in depositing undisputed statutory dues including Provident fund, Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty Excise Duty, Cess & other statutory dues as applicable with appropriate authorities. According to the information & explanation given to me, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2013 for a period of more than six months from the date they becoming payable.

Place :Mahad JATIN V. SHAH

CHARTERED ACCOUNTANT

Date : 29th May, 2013 MEMBERSHIP NO. 103858


Mar 31, 2010

We have audited the Balance Sheet of CAPROLACTAM CHEMICALS LIMITED as at 31st March 2010 and also the Profit & Loss a/c. 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. 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 tree of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and dsclosures In the financial statements. An Audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. As required by the Companies (Auditors Report) Order, 2005 issued by the Central Government of India In terms of sub-section (4A) of section 227 of the Companies Act, 1956 we enclose in the annexure 3 statement on the matters specified in paragraphs 4 and 5 of the said Order. 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 are necessary for the purpose of our audit;

ii) 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 the books.

iii) The balance sheet and profit and toss account dealt with by this report are in agreement with the books of account.

iv) In our opinion, the Balance Sheet and Profit & Loss account dealt with by this report comply with the accounting standards referred to in sub-section (30 of section 211 of the Companies Act, 1956.

v) On the basis of written representations received from the directors, as on 31st March, 2010 and taken our record by the Board of Directors, we report that none of the directors is disqualified as on 31st 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, cf the state of affairs of the Company as at 31st March 2010;

b) In the case of the Profit & Loss Account, of the Profit (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.

ANNEXURE REFERED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT

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

(b) All the assets have not been physically verified by the management during the year but there is a regular system of verification 3t reasonable Intervals, which in our opinion, is reasonable having regard to the size ol the company and the nature if its assets. No material discrepancies were noticed on such verification.

(c) The company has not disposed off substantial part of its fixed assets, which affect the going concern status of the Company.

2) (a) The inventories are physically verified at reasonable intervals during the year by the management. In our opinion, the frequercy of such verification is adequate

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

(c) In our opinion, the company has maintained proper records of inventory. The discrepancies between the physical stock and boot stocks were not material and have been properly dealt with in the books of the account.

3) The company has not granted any loans, secured or unsecured from / companies, firm or other parties covered in the Register maintained under settlor 301 of the companies Act, 1956 and accordingly paragraphs 4(iii) (b), (c)and (d)are not applicable.

4) In our opinion & according to the information and explanations give to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regards to purchases of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has Been noticed in the internal control procedures.

5) Based on the audit procedures applied by us and according to the information & explanation given to us, we are of the opinion that there are no transactions that need to be entered into the register maintained in pursuance of section 301 of the companies Act, 1956.

6) in our opinion an according to the nformation & explanations given to us, the company has not accepted any deposits from the public and hence paragraph 4(vi) of the order is lot applicable.

7) The company has an internal audit system which, in our opinion, is commensurate with the size and nature of its business

8) The rules made by the Central Government for the maintenance of Cost records under section 209(l)(d) of the Act are not applicable to the company.

9) (a) According to the records provided to us. the company is regular In depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax. Sales Tax and other material statutory dues with appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income tax,, sales tax, customs duty, excise duty and cess were in arrears, as at 31st March 2010 for period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there is no disputed liability towards sales tax. income tax, custom duty, excise duty & cess that was not paid to the concerned authorities.

10) The Company has accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year and in immediately preceding year.

11) According to the records of the company examined by us and information and explanations given to us by the management, the company has not defaulted in repayment of dues to any financial institution or bank as at the balance sheet date.

12) Based on our examination and according to information and explanations given to us, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13) The Company is not a chit fund/ nidhi /mutual benefit fund/ society and clause (xiii) of the Order is not applicable.

14) The compeny is not dealing or trading in shares, securities, debentures, and other investments.

15) According to information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial Institutions and therefore paragraph 4£xv) of the order is not applicable.

16) In our opinion and according to the information and explanations given to us, no term loans have been taken from banks or financial institutions.

17) On the bass of our examination of the Balance Sheet of the Company and according to the explanations given to us, in our opinion, funds raised on short-term basis have not been used for long-term investment and vice versa.

18) The company has not allotted any shares on preferential basis to parties and companies covered in the register maintained under section 301 of the Act.

19) The company has not Issued any secured debentures.

20) The company has not raised any money by issue of shares to the public.

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

PLACE : MAHAD For SUMARIA & SUMARIA

DATED :07/06/Z010 CHARTERED ACCOUNTANTS

J J.SUMARIA

PARTNER

M.NO.: 39147/ F.R.NO. 124343W

 
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