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Auditor Report of Cosco (India) Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Cosco (India) Limited ('the Company'), which comprise the balance sheet as at 31 March 2015, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's 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 and presentation of these standalone 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; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate 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.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone 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 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 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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the 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 standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 31 March 2015 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) 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 the paragraph 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 purposes of our audit.

(b) in our opinion proper books of account 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, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone 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 the written representations received from the directors as on 31 March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

(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 Auditors) 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 position in its financial statements.

ii. the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Auditors' Report

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

(i) In respect of fixed assets:

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme, certain fixed assets were verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories:

(a) As explained to us, the inventories of finished goods, semi-finished goods, stores, spare parts and raw materials were physically verified at the end of the year by the Management. In case of inventories lying with third parties, certificates of stocks holding have been received.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were 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, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

((iii) According to the information and explanations given to us, The Company has not granted any loans secured or unsecured to companies, firms, or other parties covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act').

(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 for the purchase of inventory, fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in internal control.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has generally been regular in depositing undisputed dues, including Provident Fund, ESI, Investor Education and Protection Fund, Income-tax, Tax deducted at sources, tax collected at source, Professional Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities. There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31 March, 2015 for a period of more than six months from the date they became payable.

(b) There are no material dues of Income tax, Sales Tax Wealth tax, Service tax, Duty of Customs, Duty of excise, Value Add tax and cess which have not been deposited with the appropriate authorities on account of any dispute.

(c) the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

(viii) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

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

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

(xi) The company has not obtained any term loan during the year, so this para of order is not applicable.

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

For Madan & Associates Chartered Accountants Firm's Reg. No.000185N

(C.A. M.K. Madan) M.No. 082214 Proprietor

Place : New Delhi Date : 30th May, 2015


Mar 31, 2014

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the 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 audit opinion.

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

(e) On the basis of the written representations received from the directors as on 31 March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31March, 2014 from being appointed as a director in terms of Section 274(1) (g) of the Act.

Annexure to the Independent Auditors'' Report

[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date]

(i) In respect of its fixed assets:

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

(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

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

(ii) In respect of its inventory:

(a) As explained to us, the inventories of finished goods, semi-finished goods, stores, spare parts and raw materials were physically verified at the end of the year by the Management. In case of inventories lying with third parties, certificates of stocks holding have been received.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were 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, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) In respect of loans, secured or unsecured, granted / taken to / from the parties listed in register U/S 301:

(a) According to the information and explanations given to us, the Company has not granted any loans to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956.

(b) The company has taken loans from companies and directors at different rates of interest. Total no of parties from whom loan taken is 9 and the amount outstanding at the year end is Rs 2048.34 lacs. The maximum outstanding during the year was Rs 2051.53 lacs.

(c) In our opinion, the rates of interest of such loans are, prima facie not prejudicial to the interests of the Company and other terms and conditions of loans are not stipulated.

(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 for the purchase of inventory, fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in internal control.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) The company has not entered into transactions exceeding value of Rs 5 lacs each with the parties listed in the register under section 301 of the companies Act, 1956.

(vi) The company has not received any public deposits during the year.

(vii) Company has appointed external firm of Chartered Accountants as Internal Auditors. Internal auditor has issued audit report in respect of factory and head office on quarterly basis. We have gone through the scope of work, Audit Reports and compliance thereof. In our opinion the internal audit needs to be further strengthened to report on internal controls / checks operating in the organisation to make it commensurate with the size and nature of company''s business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has generally been regular in depositing undisputed dues, including Provident Fund, ESI, Investor Education and Protection Fund, Income-tax, Tax deducted at sources, tax collected at source, Professional Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31 March, 2014 for a period of more than six months from the date they became payable.

(x) The company does not have the accumulated losses at the end of financial year.

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

(xii) Since the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, so para 4 (xii) of order is not applicable.

(xiii) As company is not a nidhi, chit fund or mutual benefit company, so paragraph 4 (xiii) of the order is not applicable.

(xiv) The company is not dealing or trading in shares, securities, debentures and other investments , so para 4(xiv) of order is not applicable.

(xv) In our opinion, and according to the information and the explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year

(xvi) The company has not obtained any term loan during the year, so this para of order is not applicable.

(xvii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) Since the company has not issued any debentures during the year, so para 4(xix) of order is not applicable.

(xx) Since the company has not raised money by public issue during the previous year, so paragraph 4(xx) of the order is not applicable.

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

For Madan & Associates Chartered Accountants Firm''s Reg. No.000185N



Place : New Delhi (C.A. M.K. Madan) M.No. 082214 Date : 30th May, 2014 Proprietor


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the 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 audit opinion.

Opinion

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 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.

Emphasis of Matter

Attention is drawn to Note 9.2 to the financial statements, whereby company has recognised liability of Rs. 299.81 Lacs in the accounts on the basis that realisation from the subsidiary company''s (since desubsidarised) assets / claim amount would be utilised for meeting the other liabilities (Other than Bank) of the subsidiary and there will not be any amount left to be received by the company. Since the claim amount / realisation from the assets of subsidiary are not yet ascertained, we have relied upon the assertions of the management.

Our opinion is not qualified in respect of this matter. Report on Other Legal and Regulatory Requirements

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

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

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Act.

(e) On the basis of the written representations received from the directors as on 31 March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2013 from being appointed as a director in terms of Section 274(1) (g) of the Act.

Annexure to the Independent Auditors'' Report

[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date]

(i) In respect of its fixed assets:

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

(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

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

(ii) In respect of its inventory:

(a) As explained to us, the inventories of finished goods, semi-finished goods, stores, spare parts and raw materials were physically verified at the end of the year by the Management. In case of inventories lying with third parties, certificates of stocks holding have been received.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were 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, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) In respect of loans, secured or unsecured, granted/taken to /from the parties listed in register U/S 301 :

(a) According to the information and explanations given to us, the Company has not granted any loans to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956.

(b) The company has taken loans from companies and directors at different rates of interest. Total no of parties from whom loan taken is 9 and the amount outstanding at the year end is X 1869.93 lacs. The maximum outstanding during the year was Rs. 1880.94 laces.

(c) In our opinion, the rates of interest of such loans are, prima facie not prejudicial to the interests of the Company and other terms and conditions of loans are not stipulated.

(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 for the purchase of inventory, fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in internal control.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained underthe said Section have been so entered.

(b) The company has not entered into transactions exceeding value of Rs. 5 lacs each with the parties listed in the register undersection 301 ofthecompaniesAct, 1956.

(vi) The company has not received any public deposits during the year.

(vii) Company has appointed external firm of Chartered Accountants as Internal Auditors. Internal auditor has issued audit report in respect of factory and head office on quarterly basis. We have gone through the scope of work, Audit Reports and compliance thereof. In our opinion the internal audit needs to be further strengthened to report on internal controls / checks operating in the organisation to make it commensurate with the size and nature of company''s business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) In respect of statutory dues:

(a) According to the information and explanations given to us, the Company has generally been regular in depositing undisputed dues, including Provident Fund, ESI, Investor Education and Protection Fund, Income-tax, Tax deducted at sources, tax collected at source, Professional Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31 March, 2013 for a period of more than six months from the date they became payable, except property tax of f 12.07 lacs which has not been deposited as on 31 st March, 2013 on account of dispute with Municipal Corporation Gurgaon.

(x) The company does not have the accumulated losses at the end of financial year.

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

(xii) Since the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, so para 4 (xii) of order is not applicable.

(xiii) As company is not a nidhi, chit fund or mutual benefit company, so paragraph 4 (xiii) of the order is not applicable.

(xiv) The company is not dealing or trading in shares, securities, debentures and other investments, so para 4(xiv) of order is not applicable.

(xv) The company had given guarantee of US $ 20.05 lacs to State Bank of India Colombo in respect of loans granted by the Bank to Company''s erstwhile subsidiary. In view of the continued suffering of losses and suspension of operations and underutilised assets of erstwhile subsidiary vested in secretary to the Treasury of Govt. Of Sri Lanka under revival of Underperforming Enterprises or underutilised Assets Act No 43 of 2011 Company had accounted for Rs. 637.67 lacs in financial year 2011 -12 and Rs. 299.81 Lacs during the year under audit as corporate guarantee obligation as explained in Note No 9.2.

(xvi) The company has not obtained any term loan during the year, so this para of order is not applicable.

(xvii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have not been used during the year for long- term investment.

(xviii) According to the information and explanations given to us, the Company has not made preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(xix) Since the company has not issued any debentures during the year, so para 4(xix) of order is not applicable.

(xx) Since the company has not raised money by public issue during the previous year, so paragraph 4(xx) of the order is not applicable.

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



For Madan & Associates

Chartered Accountants Firm''s Reg. No.000185N



Place: New Delhi (C.A. M.K. Madan)

M.No. 082214

Date: 30th May, 2013 Proprietor


Mar 31, 2012

1. We have audited the Balance Sheet of COSCO (INDIA) LIMTED ("the Company") as at 31st March' 2012' the statement of Profit & Loss and the Cash Flow Statement of the Company for the year ended on that date' annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors' Report) Order' 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act' 19561 we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the Said Order.

4. Further to our comments in the Annexure referred to in the paragraph 3 above' we report as follows:

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 the books;

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

d. in our opinion the Balance Sheet' the Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act'1956;

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

f. in our opinion and to the best of our information and according to the explanation given to us' the said financial statements read together with notes thereon (particularly note no. 30.1 reg. Corporate Obligations- Emphasis of Matter) and Accounting Policies' 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 the Balance Sheet' of the state of affairs of the company as at 31st March' 2012;

(ii) in the case of the Statement of Profit & Loss' of the loss of the company for the year ended on that date and

(iii) in the case of Cash Flow Statement' of the cash flows for the year ended on that date.



ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 3 of our report of even date)

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

(b) As informed' the company has a programme of physical verification of all major fixed assets overa period 2-3 years and as per programme' dies' computers & printers' Moulds and Machinery purchased in last three years at Factory were physically verified during the year.

(c) Since there is no disposal of substantial part of fixed assets during the year' paragraph 4 (i) (c) of the Companies (Auditors' Report) Order'2003 (hereinafter referred to as the Order) is not applicable.

(ii) (a) The inventories have been physically verified by the management at close of the year.

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

(c) On the basis of our examination of the records of inventory' we are of the opinion that the company is maintaining proper records of inventory. According to the information and explanations given to us' no material discrepancies were noticed on physical verification between the physical stock and the book records.

(iii) (a) The Company had advanced interest free loan of Rs. 284.88 lacs to its subsidiary company in the earlier years which has been written off during the year due to subsidiary company's continued suffering of operational losses.

(b) The company has taken loans from companies' Directors and others (shareholders/Directors' relatives) at differential rates of interest. The other terms and conditions of loans are not stipulated. In our opinion the rates of interest are not prima facie prejudicial to the interest of the company. Total no. of parties from whom loans are taken is 9 and the amount outstanding at the year end is Rs. 1710.21 lacs. The maximum amount outstanding during the year was Rs. 1748.36 lacs.

(c) As stated in para (iii) (b) above' the terms of repayment are not specified. Of the interest outstanding at the beginning of the year of Rs. 188.99 lacs' Company has paid Rs. 130.31 lacs during the year.

(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 for the purchase of inventory and fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in internal controls.

(v) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act' 1956' to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangement that need to be entered in the register maintained under section 301 of the Companies Act' 1956 have been so entered.

(b) The company has not entered into transactions exceeding value of f 5 lacs each with the parties listed in the register under section 301 of the Companies Act' 1956.

(vi) The Company has not received public deposits during the year.

(vii) Company has appointed External Firm of Chartered Accountants as Internal Auditors. Internal Audit has issued Audit Reports in respect of Factory and Head Office on quarterly basis. We have gone through the scope of work' Audit Reports and compliance thereof. In our opinion the Internal Audit needs to be further strengthened to report on Internal controls / checks operating in the organization to make it commensurate with the size and nature of company's business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules' 2011 prescribed by the the Central Government under section 209(1 )(d) of the Companies Act' 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have' however' not made a detailed examination of the records with a view to determining whether they are accurate or complete.

(ix) According to the information and explanations given to us and according to the records of the company in respect of

statutory dues:'

(a) The company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund' investor education and protection fund' employees' state insurance' income tax' tax deducted at source' tax collected at source' professional tax' sales tax' custom duty' excise duty' service tax' octroi charges' property tax' water tax' license fees' works contract tax' cess and other material statutory dues applicable to it. There were no undisputed amounts in respect of the statutory dues referred to above were outstanding as at March 31'2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us' Property Tax of Rs. 444854/- has not been deposited as on 31st March' 2012 on account of dispute with Municipal Corporation Gurgaon.

(x) Company does not have the accumulated losses at the end of the financial year. Company has suffered cash losses of Rs. 340.80 Lacs during the year but NIL in the immediately proceeding financial year.

(xi) As per information given to us' company has not defaulted in repayment of dues to a financial institution or bank or debenture holder.

(xii) Since the company has not granted any loans or advances on the basis of security by way of pledge of shares' debentures and other securities' paragraph 4 (xii) of the Order is not applicable.

(xiii) As the company is not a nidhi/mutual benefit fund/society' paragraph 4 (xiii) of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares' securities' debentures and other investments.

(xv) The company had given guarantee of US $ 20.05 lacs equivalent to INR of f 1019.92 lacs to State Bank of India Colombo in respect of loans granted by the Bank to Company's subsidiary. In view of the continued sufferings of losses and suspension of operations' underutilized assets of subsidiary as detailed in note no. 12.2 stand vested in the Secretary to the Treasury of Govt' of Sri Lanka under Revival of Underperforming Enterprises or Underutilized Assets Act. No. 43 of 2011. As detailed in note no. 30.1 Company has accounted for 637.67 lacs during the year under Audit. Company is of the view that there may not accrue any further liability of remaining amount in view of realisable value of Subsidiary's net asset and Banker's accepting the one time settlement offer of Company.

(xvi) During the year the company has not raised term loans.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company' no funds raised on short term basis have been used for long term investments.

(xviii)According to the information and explanations given to us' the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act.

(xix) Since the company has not issued any debentures during the year' paragraph 4 (xix) of the Order is not applicable.

(xx) Since the company has not raised any money during the year by way of public issue' paragraph 4(xx) of the Order is not applicable.

(xxi) Based upon the audit procedures performed and the information and explanations given by the management' we report that no fraud on or by the company has been noticed or reported during the year.

For Madan & Associates

Chartered Accountants

Firm's Reg. No.000185N

Place : New Delhi (C.A. M.K. Madan)

M.No. 082214

Date: 3rd September' 2012 Proprietor


Mar 31, 2010

We have audited the Balance Sheet of Cosco (India) Ltd. as at 31st March, 2010 and also the Profit & Loss Account and the cash flow statement of the Company 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 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 management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

We report that :-

1. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 & 5 of the Said Order.

Attention of the Members is drawn to the following:

(i) Note No. 5 Reference is invited to Note No. 5 of Notes on Accounts regarding valuation of slow moving / non moving stocks of Rs. 109.19 Lakh. Management has informed, on the basis of internal technical I commercial evaluation of these stocks, these are usable / salable. Management has further represented that these stocks have been valued at cost and realizable value in respect of these stocks will not be less than cost. We have relied upon the management as the matter is technical & subjective and therefore are unable to quantify the provision of loss if any.

(ii) Nofe No. 26 Reg. Investments in immovable properties amounting to Rs. 1,26,24,129/- made in earlier years for which builder / developer has not made allocation of the property till date. In view of the long over due of the amount/ non allocation of property, we are unable to comment upon the recoverability of the amount.

(iii) Note No. 29/34 Companys exposure in the wholly owned subsidiary as at 31.03.2010 is (a) Investment in the Equity shares Rs. 5,86,47,778/- (b) Loans & Advances Rs. 2,89,48,160/- and (c) Sundry Debtors Rs. 32,16,996/-. The subsidiary companys operations have been suspended and in view of the same operational viability of the subsidiary Company is under pressure. The management has represented that it is likely to restart the production in view of the favourable political environment in Sri Lanka and global economic recovery.

Considering the facts and representations of company and in view of absence of the information regarding the fair value of the Assets of the company by an independent Agency, we have relied upon the Management of the company and therefore are unable to comment upon the recovery of the investments /Advances / Sundry Debtors as stated.

(iv) Inventories as at 31.03.10 includes repairable health & fitness & other equipment valued at cost less 50% at Rs. 16,54,976/-; old models of fitness equipment valued at cost less 50% at Rs. 1,05,619/-; spares in respect of health equipment valued at sale price minus average margin of profit of 50% at Rs.41,87,452/- and synthetic panel sets valued at Rs.1,02,55,7101-(as estimated by management). Management has certified that these stocks have been valued at fair prices and net realizable value in respect of these stocks would not be less than the price at which they are valued. In absence of complete information about disposal of these stocks and other particulars, we have relied upon the Certificate of the Management and therefore are unable to comment on the same.

2. Further to our comments in the annexure referred to in the paragraph 1 above.

(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 the books.

(c) The Balance Sheet, Profit & 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, Profit & Loss A/c. and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1956.

(e) We have been informed by the Company that none of the Directors is disqualified as on 31.3.2010 from being appointed as director under clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with notes thereon and Accounting Policies and subject to remarks in sub para (i) to (iv) as mentioned above and subject to non provision of accumulated loss of Rs. 1296.25 Lacs (1279.99 lacs) including current year loss of Rs. 147.90 lacs (460.36 lacs) in wholly owned subsidiary (note no.29); 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 case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2010 and

(ii) In case of the Profit & Loss Account, of the profit of the company for the year ended on that date and

(iii) In the case of cash flow statement, of the cash flows for the year ended on that date.

(g) We further report that had the remarks given by us in para (f) above been considered, loss for the year would have been Rs. 1247.58 lacs (1197.99 lacs) against the reported figure of prof it of Rs.48.67 lacs (82 lacs), the reserves & surplus would have been Rs.187.31 lacs (154.90 Lacs) against the reported figure of Rs.1483.56 lacs (1434.89 lacs).

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF THE AUDITORS REPORT TO THE MEMBERS OF COSCO (INDIA) LTD. ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2009

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

(b) As informed, the company has a programme of physical verification of all major fixed assets over a period 2-3 years and as per programme, dies, computers & printers, Moulds and Machinery purchased in last three years at Factory were physically verified during the year.

(c) Since there is no disposal of substantial part of fixed assets during the year, paragraph 4 (i) (c) of the Companies (Auditors Report) Order,2003 (hereinafter referred to as the Order) is not applicable.

(ii) (a) The inventories have been physically verified by the management at close of the year.

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

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. According to the information and explanations given to us, no material discrepancies were noticed on physical verification between the physical stock and the book records.

(iii) (a) The company has taken loans from companies, Directors and others (shareholders/Directors relatives) as per interest rates stated in note no. 28 of Notes on Accounts (Schedule S). The other terms and conditions of loans are not stipulated. In our opinion the rates of interest are not prima facie prejudicial to the interest of the company. Total no. of parties from whom loans are taken is 9 and the amount outstanding at the year end is Rs.1420.81 lacs. The maximum amount outstanding during the year was Rs.1517.27 lacs. Company has advanced interest free loan of Rs. 289.48 lacs to its wholly owned subsidiary.

(b) As stated in para(iii) (a) above, the terms of repayment are not specified. Of the interest outstanding at the beginning of the year of Rs. 149.23 lacs, Company has paid Rs. 38.50 lacs during the year.

(c) In view of the comments in para (iii) (a) & (b) above, the requirements of para 4 (iii) (d) of the order are not applicable.

(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 for the purchase of inventory and fixed assets and for the sale of goods. We have not observed any continuing failure to correct major weaknesses in internal controls except as stated.

(v) (a) To the best of our knowledge and belief and according to the information and explanation given to us, we are of the opinion that the transactions that need to be entered in the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) The company has not entered into transactions exceeding value of Rs.5 lacs each with the parties listed in the register under section 301 of the Companies Act, 1956.

(vi) The Company has not received public deposits during the year.

(vii) Company has appointed External Firm of Chartered Accountants as Internal Auditors. Internal Audit has issued Audit Reports in respect of Factory and Head Office on quarterly basis. We have gone through the scope of work, Audit Reports and compliance thereof. In our opinion the Internal Audits scope of work needs to be enhanced to report on Internal controls / checks operating in the organization, participation in the physical verification of Fixed Assets and to cover branches, to make it commensurate with the size and nature of companys business.

(viii) The Central Government has not prescribed the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 in respect of any of the products of the company.

(ix) (a) According to the information and explanations given to us and according to the records of the company, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, tax deducted at source , tax collected at source, professional tax, sales tax, custom duty, excise duty, service tax, octroi charges, property tax, water tax, license fees, works contract tax, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts in respect of the statutory dues referred to above were outstanding as at March 31, 2010 for a period of more than six months from the date they became payable.

According to the information and explanations given to us, there is no disputed liability outstanding in respect of statutory dues comprising of Sales tax/ income tax / Custom tax / Wealth tax / Cess as at March 31, 2010.

(x) Considering our remarks in para (i to iv) of main report and para (xv) of this annexure, we are unable to comment on the net worth of the company.

(xi) As per information given to us, company has not defaulted in repayment of dues to a financial institution or bank or debenture holder.

(xii) Since the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4 (xii) of the Order is not applicable.

(xiii) As the company is not a nidhi/mutual benefit fund/society, paragraph 4 (xiii) of the Order is not applicable.

(xiv) The Company has made inter-corporate investments in its wholly owned subsidiary company in Sri Lanka and made investments/traded in shares of other bodies corporate in earlier year. The company has categorized the investments of shares in other bodies corporate as long term and current investments. The Internal Auditor of the company has confirmed that the required records / register have been maintained by the company on computer system on day to day basis and the same have been found to be in order.

(xv) The company has given guarantee of US $ 20.05 Lacs (20.05 Lacs) equivalent to INR of Rs.900.04 lacs (1019.74 lacs) to State bank of India Colombo in respect of loans granted by the Bank to Companys subsidiary. In view of the continued sufferings of losses and suspension of operations, subsidiary companys viability as a going concern is under pressure. Company has informed that the realizable value of fixed assets is more than the secured debt of wholly owned subsidiary and therefore company does not foresee any liability on that Account. We have relied upon the representation of the management and therefore are unable to comment upon whether there would be any devolvement of liability on the company due to issuance of guarantee.

(xvi) During the year the company has not raised term loans.

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

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under section 301 of the Act.

(xix) Since the company has not issued any debentures during the year, paragraph 4 (xix) of the Order is not applicable.

(xx) Since the company has not raised any money during the year by way of public issue, paragraph 4(xx) of the Order is not applicable.

(xxi) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For R.N. BAHL & Co.

Chartered Accountants

Firms Registration No.000185N

(C.A. R.N. BAHL)

M. No. 2277

Partner

Place : New Delhi

Date : 28th August, 2010



 
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