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Auditor Report of Duncans Industries Ltd.

Sep 30, 2014

1. Report on the Financial Statements

We have audited the accompanying financial statements of Duncans Industries Limited ("the Company"), which comprise the Balance Sheet as at September 30, 2014, the Statement of Profit and Loss, the Cash Flow Statement, significant accounting policies and other notes thereon for the year ended on that date.

2. 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'') read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. 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.

3. 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 disclosures in the financial statements. The procedures selected depend on the auditors'' 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 entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

4. Basis for Qualified Opinion

(I) Attention is invited to the following notes to the financial statements:

a) Note 10 (a) (i) and 10(b)(i) regarding shortfall in value of loans and advances given to certain companies;

b) Note 19(i) regarding non ascertainment of impact of wage revision pending negotiations thereof;

c) Note 26 regarding non-provision of Rs. 811.67 lacs demanded by the appropriate authorities as ''Salami'' on renewal of lease in certain circumstances;

d) Note 27 regarding payment of managerial remuneration amounting to Rs.719.30 lacs (including Rs.196.68 lacs for the year) which is subject to approval of the Central Government;

e) Note 28 regarding certain debit and credit balances including advances, trade receivables, trade payables and other liabilities which are subject to confirmation and reconciliation thereof;

(II) Impacts with respect to Para a) to e) above are presently not ascertainable and as such cannot be commented upon by us.

5. Qualified Opinion

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30th September, 2014;

(b) in the case of the Statement of Profit and Loss, 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.

6. Emphasis of Matter

Without qualifying our opinion on this matter, we draw attention to Note 24 (a) to the financial statements which indicate that inspite of the Company''s networth becoming negative, the accounts have been prepared on going concern basis. The Company''s ability to continue as a going concern is dependent upon the outcome of the measures as per BIFR scheme under implementation and other ameliorative steps and prospects thereof and as such, we are unable to comment on the same.

7. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors'' Report) Order, 2003 as amended by the Companies (Auditors'' Report) (Amendment) Order, 2004 (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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 appears from our 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. Except for the possible effects of the matters described in Para 4(I)(b) above under Basis for Qualified Opinion paragraph (Note 19(i) of the financial statements), in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Act read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e. As per the legal opinion received and on the basis of written representations received from the directors as on September 30, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on September 30, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO THE AUDITORS'' REPORT REFERRED TO IN PARAGRAPH 6 THEREOF

i) a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets.

b) All the fixed assets have not been verified by the management during the year but according to the information and explanations given to us, there is a regular programme of verification which, in our opinion, is reasonable having regard to the size and the nature of its assets. In respect of assets verified during the year, no material discrepancies have been noticed.

c) In our opinion, during the year, the company has not disposed off substantial part of its fixed assets.

ii) a) The inventory, as explained to us, has been physically verified during the year by the management in a phased manner. Necessary confirmations with respect to year end stock lying with third parties was not available. In respect of certain materials stored in heaps such verification has been done on the basis of visual estimation / survey and/ or volumetric measurement technique.

b) In our opinion, read together with Para (ii) (a) above, the procedure of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) In our opinion, the company has maintained proper records of its inventory and as explained to us, the discrepancies observed on such verification between the physical stock and the book records were not material.

iii) a) During the year, the Company has not granted any loan secured or unsecured to any company, firm or other party covered in the Register maintained under Section 301 of the Act. In respect of unsecured loan given in earlier years (Note 10(b) (i) to the financial statements), recoverable from a company covered in the register maintained under Section 301 of the Act, the aggregate maximum amount involved and the year end balance was Rs.1685 lacs.

b) The aforesaid loan as stated in Note 10(b) (i) to the financial statements is repayable to the Company by March, 2015 and is interest free and having regard to the explanations given by the management of the same being strategic in nature, the terms and conditions of the said loan is prima facie not prejudicial to the interest of the Company.

c) As stated above, the aforesaid loan is repayable to the Company by March, 2015. During the year, the Company has not received any amount in this respect.

d) Having regard to Para (c) above, there is no overdue amount of loan and accordingly clause 4 (iii) (d) is not applicable to the company.

e) The Company, during the year has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, clause 4 (iii) (e) to (g) of the order are not applicable to the company.

iv) In our opinion, and having regard to the nature and exigencies of business and the practices followed and the explanation that certain items purchased are of a special nature and therefore in certain cases alternative quotations are not available, there is an adequate internal control procedure commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods. During the course of our audit, we have not observed any continuing failure to correct the major weaknesses in internal controls.

v) According to information and explanation given to us and as per the records of the company, there is no transaction that needs to be entered, in the Register maintained under Section 301 of the Act. Accordingly, the provisions of the clause 4 (v) (b) of the said order is not applicable to the Company.

vi) The Company has not accepted any deposits from public during the year within the meaning of the provisions of the section 58A, 58AA or any other relevant provision of the Act and rules made thereunder. Deposits accepted in the earlier years have been repaid in terms of the scheme sanctioned by Board for Industrial and Financial Reconstruction (BIFR) and to the extent lying unclaimed has been kept deposited in a separate bank account.

vii) The Company''s internal audit has been conducted by independent consultants as per the phased programme of verification. Internal audit reports with respect to areas covered till 31st March, 2014 were received and the same was in progress for the remaining period. In our opinion the internal audit system in respect of the areas covered is commensurate with the size and nature of the business of the Company.

viii) On the basis of records produced, we are of the opinion that prima facie the cost records and accounts prescribed by the Central Government under Section 209(1) (d) of the Act have been maintained. However, we have not carried out any detailed examination of such records with a view to determine whether they are accurate or complete.

ix) a) According to the information and explanations given to us, undisputed dues with respect to provident/pension fund (including interest thereon), tax deducted at source (including interest thereon), service tax, works contract tax, professional tax, cess and other statutory payables, as applicable, were not deposited regularly with appropriate authorities. The details of material statutory dues outstanding for a period exceeding six months as provided for in the accounts are given below:

Statute Nature of Dues Amount (Rs. in Lacs)

The Income Tax Act, Tax Deducted at Source 565.58 1961 (including interest) Tax collected at source 5.35

West Bengal Rural Cess on Green Leaf 219.04 Employment & Production Act, 1976

The Employee''s Contribution to Provident 2041.89 Provident Funds and and Pension Fund Miscellaneous Provisions Act, 1952 Interest on Provident and 705.19 Pension Fund

Employees'' Contribution to 88.73 Provident Fund

West Bengal State Professional Tax 0.39 Tax On Professions, Trades, Callings And Employments Act, 1979

West Bengal Value Works Contract Tax 3.76 Added Tax Act, 2003

West Bengal Value Purchase Tax 3.25 Added Tax Act, 2003

Service Tax Service tax 3.43

Statute Period to which the amount relates to

The Income Tax Act, 2011-14 1961 2013-14

West Bengal Rural 2001-06 and 2011-12 Employment & Production Act, 1976

The Employee''s 2010-13 (including Rs. 1908.62 Provident Funds lacs in respect of which instalment Miscellaneous Provisions facility has been granted (Refer Act, 1952 Note 25)

2004-14

2013-14

West Bengal State 2013-14 Tax On Professions, Trades, Callings And Employments Act, 1979

West Bengal Value 2010-14 Added Tax Act, 2003

West Bengal Value 2004-14 Added Tax Act, 2003

Service Tax 2013-14

b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty, Service Tax and Cess which have not been deposited on account of any dispute except as given below:

Statute Nature of Tax Forum where Amount Dispute is Pending (Rs. in Lacs) The Income Tax Income Tax High Court CIT 47.32 Act, 1961 (Appeals) 41.51

The Central Sales Central Sales Tax ACCT 2.41

Tax Act, 1956

The West Bengal Sales Tax ACCT 12.16 Sales Tax Act, 1994

The West Bengal VAT WBTT 15.77 Value Added Tax, WBCT 8.84 2003 Additional 21.86 Commissioner

Statute Period to which amount relates The Income Tax 1976-78 &2005-07 Act, 1961

The Central Sales 2004-05

Tax Act, 1956

The West Bengal 1996-98, 2001-02, Sales Tax Act, 2003-05 1994

The West Bengal 2007-08 Value Added Tax, 2008-09 2003 2010-12 x) The accumulated losses of the Company as at the end of the financial year are more than 50 percent of its net worth. The Company has incurred cash losses during the financial year and in the immediately preceding financial year covered by our audit.

xi) In our opinion and on the basis of information and explanations provided by the management, except as given in Note 4(a) and (b) (iv) of the financial statements, the Company has not defaulted in repayment of dues, if any, to financial institutions, banks and debenture holders.

xii) The Company has not granted any loan and advances on the basis of security by way of pledge of shares, debentures and other security.

xiii) In our opinion, the Company is not a chit fund or nidhi / mutual benefit fund / society. Therefore, the provisions of the clause 4 (xiii) of the said order 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 provision of clause 4 (xiv) of the Order is not applicable to the Company.

xv) The Company has not given any guarantee during the year for loan taken by others. The guarantee of Rs. 830 lacs given in earlier years to group/associate companies in respect of loans taken by them from bank, considering the long term involvement with those companies when issued, was not prima facie prejudicial to the interest of the Company.

xvi) As per the information and explanations given to us, no fresh term loan has been taken during the year.

xvii) According to the information and explanation given to us, on an overall examination of the Balance Sheet of the Company, we report that funds amounting to Rs.15,572.98 lacs raised on short-term basis have been used for long term investment, i.e. for fixed assets, funding the losses etc of the Company.

xviii) The Company has made preferential allotment of shares at par to companies covered in the Register maintained under Section 301 of the Act during the year. Considering the terms of rehabilitation sanctioned by BIFR, the price at which the shares have been issued is not prejudicial to the interest of the Company.

xix) The Company has not issued any secured debentures during the year. Accordingly, clause 4 (xix) of the order is not applicable to the company.

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

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

For Lodha & Co. Chartered Accountants Firm ICAI Registration No: 301051E

R.P.Singh Place: Kolkata Partner Date: 18th November, 2014 Membership No. 52438


Sep 30, 2013

1. Report on the Financial Statements

We have audited the accompanying financial statements of Duncans Industries Limited ("the Company"), which comprise the Balance Sheet as at September 30, 2013, the Statement of Profit and Loss, the Cash Flow Statement, significant accounting policies and other notes thereon for the period of eighteen months (''period'') ended on that date.

2. 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.

3. 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 disclosures in the financial statements. The procedures selected depend on the auditors'' 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

4. Basis for Qualified Opinion

(I) Attention is invited to the following notes to the financial statements:

a) Note 10 (a) (i) and (ii) regarding shortfall in value of loans and advances given to certain companies;

b) Note 28 regarding non-provision of Rs. 811.67 lacs demanded by the appropriate authorities as "Salami" on renewal of lease in certain circumstances; and

c) Note 29 regarding payment of managerial remuneration amounting to Rs. 522.40 lacs (including Rs 176.20 lacs for the eighteen months period) which is subject to approval of the Central Government.

(II) Impacts with respect to Para a) to c) above are presently not ascertainable and as such cannot be commented upon by us.

5. Qualified Opinion

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30th September, 2013;

(b) in the case of the Statement of Profit and Loss, of the loss for the period ended on that date; and

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

6. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors'' Report) Order, 2003 as amended by the Companies (Auditors'' Report) (Amendment) Order, 2004 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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 appears from our 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 our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Act; and

e. As per the legal opinion received and on the basis of written representations received from the directors as on September 30, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on September 30, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE TO THE AUDITORS'' REPORT REFERRED TO IN PARAGRAPH 6 THEREOF

i) a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets.

b) All the fixed assets have not been verified by the management during the period but according to the information and explanations given to us, there is a regular programme of verification which, in our opinion, is reasonable having regard to the size and the nature of its assets. In respect of assets verified during the period, no material discrepancies have been noticed.

c) In our opinion, during the period, the company has not disposed off substantial part of its fixed assets.

ii) a) The inventory, as explained to us, has been physically verified during the period by the management in a phased manner. No confirmations with respect to stock lying with third parties were obtained. In respect of certain materials stored in heaps such verification has been done on the basis of visual estimation / survey and/or volumetric measurement technique.

b) In our opinion, read together with Para (ii) (a) above, the procedure of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) In our opinion, the company has maintained proper records of its inventory and as explained to us, the discrepancies observed on such verification between the physical stock and the book records were not material.

iii) a) During the period, the Company has not granted any loan secured or unsecured to any company, firm or other party covered in the Register maintained under Section 301 of the Act. In respect of unsecured loan given in earlier years (Note 10(a) (i) to the financial statements), recoverable from a company covered in the register maintained under Section 301 of the Act, the aggregate maximum amount involved and the year end balance was Rs.1685 lacs.

b) The aforesaid loan as stated in Note 10(a) (i) to the financial statements is repayable to the Company by March, 2015 and is interest free and having regard to the explanations given by the management of the same being strategic in nature, the terms and conditions of the said loan is prima facie not prejudicial to the interest of the Company.

c) As stated above, the aforesaid loan is repayable to the Company by March, 2015. During the period, the Company has not received any amount in this respect.

d) Having regard to Para (c) above, there is no overdue amount of loan and accordingly clause 4 (iii) (d) is not applicable to the company.

e) The Company, during the period has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, clause 4 (iii) (e) to (g) of the order are not applicable to the company.

iv) In our opinion, and having regard to the nature and exigencies of business and the practices followed and the explanation that certain items purchased are of a special nature and therefore in certain cases alternative quotations are not available, there is an adequate internal control procedure commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct the major weaknesses in internal controls.

v) According to information and explanation given to us and as per the records of the company, there is no transaction that needs to be entered, in the Register maintained under Section 301 of the Act. Accordingly, the provisions of the clause 4 (v) (b) of the said order is not applicable to the Company.

vi) The Company has not accepted any deposits from public during the period within the meaning of the provisions of the section 58A, 58AA or any other relevant provision of the Act and rules made thereunder. Deposits accepted in the earlier years have been repaid in terms of the scheme sanctioned by Board for Industrial and Financial Reconstruction (BIFR) and to the extent lying unclaimed has been kept deposited in a separate bank account.

vii) The Company''s internal audit has been conducted by independent consultants as per the phased programme of verification. Internal audit reports with respect to areas covered till 31st March, 2013 were received and the same was in progress for the remaining period. In our opinion the internal audit system in respect of the areas covered is commensurate with the size and nature of the business of the Company.

viii) On the basis of records produced, we are of the opinion that prima facie the cost records and accounts prescribed by the Central Government under Section 209(1) (d) of the Act have been maintained. However, we have not carried out any detailed examination of such records with a view to determine whether they are accurate or complete.

ix) a) According to the information and explanations given to us, excepting provident fund and pension fund, tax deducted at source, cess on green leaf and professional tax, the company is generally regular in depositing with appropriate authorities undisputed statutory dues in respect of Investor Education & Protection Fund, Income Tax, Sales Tax and other material statutory dues applicable to it. The details of material statutory dues outstanding for a period exceeding six months as provided for in the accounts are given below:



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

The Income Tax Act, 1961 Tax Deducted 257.82 2011-12 at Source 2012-13

West Bengal Rural Cess on 218.67 2001-06 and Employment & Production Green Leaf 2011-12 Act, 1976

The Employee''s Provident Contribution to 1515.97 2010-13 Funds and Miscellaneous Provident and Provisions Act, 1952 Pension Fund

Interest on 566.05 2004-13

Provident and

Pension Fund

Employees'' 19.07 2012-13

Contribution to

Provident Fund

West Bengal Labour Employees'' 0.14 2011-12 &

Welfare Fund Act, 1974 Contribution to 2012-13

Labour Welfare

Fund

West Bengal State Tax On Professional Tax 0.95 2011-12 &

Profession Trades, 2012-13

Calling and Employments Act, 1979

West Bengal Value Works Contract 3.72 2010 -11, 2011-12

Added Tax Act, 2003 Tax 2012-13



b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty, Service Tax and Cess etc which have not been deposited on account of any dispute except as given below:

Statute Nature of Forum where Amount Period to which Tax Dispute is (Rs. in amount relates Pending Lacs)

The Income Income Tax High Court 47.32 1976-78 &

Tax Act, 1961 CIT (Appeals) 41.51 2005 -07

The Central Central ACCT 2.41 2004-05

Sales Tax Act, Sales Tax 1956

The West Bengal Sales Tax ACCT 12.16 1996-98,

Sales Tax Act , 2001-02,

1994 2003-05

The West Bengal VAT WBTT 15.77 2007-08

Value Added Tax, WBCT 8.84 2008-09

2003 Commissioner 213.04 2009-11



x) The accumulated losses of the company have exceeded fifty percent of its net worth. The Company has incurred cash losses during the period and in the immediately preceding financial year.

xi) In our opinion and on the basis of information and explanations provided by the management, except as given in Note 4 (a) & (b) (v) of the financial statements, there is no default in repayment of dues, if any, to financial institutions, banks and debenture holders.

xii) The Company has not granted any loan and advances on the basis of security by way of pledge of shares, debentures and other security.

xiii) In our opinion, the Company is not a chit fund or nidhi / mutual benefit fund / society. Therefore, the provisions of the clause 4 (xiii) of the said order 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 provision of clause 4 (xiv) of the Order is not applicable to the Company.

xv) The Company has not given any guarantee during the period for loan taken by others. Guarantees given in earlier years to group/associate companies in respect of loans taken by them from banks and financial institutions, considering the long term involvement with those companies when issued was not prima facie prejudicial to the interest of the Company.

xvi) As per the information and explanations given to us, no fresh term loan has been taken during the period.

xvii) According to the information and explanation given to us, on an overall examination of the Balance Sheet of the Company, we report that funds amounting to Rs.14,879.10 lacs raised on short-term basis have been used for long term investment, i.e. for fixed assets, funding for losses etc.

xviii) The Company has made preferential allotment of shares at par to companies covered in the Register maintained under Section 301 of the Act during the period. Considering the terms of rehabilitation sanctioned by BIFR, the price at which the shares have been issued is not prejudicial to the interest of the Company.

xix) The Company has not issued any secured debentures during the period. Accordingly, clause 4 (xix) of the order is not applicable to the company.

xx) The Company has not raised any money through a public issue during the period.

xxi) During the course of our examination of books and records of the Company carried out in accordance with generally accepted auditing practices in India, we have neither come across any instances of fraud on or by the Company, noticed and/or reported during the period, nor have we been informed of any such case by the management.



For LODHA & CO.

Chartered Accountants

Firm ICAI Registration No. 301051E



R. P. Singh

Place:Kolkata Partner

Date :27th November, 2013 Membership No. 52438


Mar 31, 2012

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

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditor's Report) Order, 2003 ("the order"), as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government in exercise of the powers conferred by Section 227 (4A) of the Companies Act 1956, ("the Act") and according to the information and explanations given to us and on the basis of such checks as we considered appropriate, we state that :

I. a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets.

b) All the fixed assets have not been verified by the management during the year but according to the information and explanations given to us, there is a regular programme of verification which, in our opinion, is reasonable having regard to the size and the nature of its assets. In respect of assets verified during the year, no material discrepancies have been noticed.

c) In our opinion, during the year, the company has not disposed off substantial part of its fixed assets.

II. a) The inventory, as explained to us, has been physically verified by the management in a phased manner. No confirmations with respect to stock lying with third parties were obtained. In respect of certain materials stored in heaps such verification has been done on the basis of visual estimation/survey and/or volumetric measurement technique.

b) In our opinion, read together with Para (II) (a) above, the procedure of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) In our opinion, the company has maintained proper records of its inventory and as explained to us, the discrepancies observed on such verification between the physical stock and the book records were not material and have been properly dealt with in the books of account.

III. a) a) During the year, the Company has not granted any loan secured or unsecured to any company, firm or other party covered in the Register maintained under Section 301 of the Act. In respect of the unsecured loan given in earlier years to a company covered in the register maintained under said section, the aggregate maximum amount involved was Rs.1685 lacs. The said loan has been assigned to another company during the year as indicated in Note 10(a) (i) to the financial statements.

b) As given above the said loan has been assigned to an another company and accordingly clause III (b) to (d) are not applicable to the company.

c) The Company, during the year has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, clause 4 (III) (e) to (g) of the order are not applicable to the company.

IV. In our opinion, and having regard to the nature and exigencies of business and the practices followed and the explanation that certain items purchased are of a special nature and therefore in certain cases alternative quotations are not available, there is an adequate internal control procedure commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct the major weaknesses in internal controls.

V. According to information and explanation given to us and as per the records of the company, there is no transaction that needs to be entered, in the Register maintained under Section 301 of the Act. Accordingly, the provisions of the clause 4 (v) (b) of the said order is not applicable to the Company.

VI. The Company has not accepted any deposits from public during the year within the meaning of the provisions of the section 58A, 58AA or any other relevant provision of the Act and rules made thereunder. Deposits accepted in the earlier years in excess of the limit prescribed for the purpose and were due for repayment have been dealt with as prescribed in the scheme sanctioned by Board for Industrial and Financial Reconstruction (BIFR) and transferred to Kanpur Fertilizers and Cements Limited (KFCL) on demerger of Fertiliser Division to said company (Note 29.1 (c) to the financial statements). The said liability as stated in Note. 4(b)(v) to the financial statements have since been repaid out of the funds provided to the Company by KFCL.

VII. The Company's internal audit has been conducted in a phased manner by a firm of Chartered Accountants. In our opinion the internal audit system in respect of the areas covered during the year is commensurate with the size and nature of the business of the Company.

VIII. On the basis of records produced, we are of the opinion that prima facie the cost records and accounts prescribed by the Central Government under Section 209(1) (d) of the Act have been maintained. However, we have not carried out any detailed examination of such records with a view to determine whether they are accurate or complete.

IX. a) According to the information and explanations given to us, excepting employer's

contribution for provident fund and cess on green leaf, the company is generally regular in depositing with appropriate authorities undisputed statutory dues in respect of Investor Education & Protection Fund, Income Tax, Sales Tax, Professional Tax and other

material statutory dues applicable to it. The details of material statutory dues outstanding for a period exceeding six months as provided for in the accounts are given below:

Statute Nature of Amount Period to Dues (Rs. in which the Lacs) amount relates to The Income Tax Act, Tax Deducted 17.97 2011-12 at Source

West Bengal Rural Cess on 190.67 2001-06 and Employment & Production Green Leaf 2011-12 Act, 1976

The Employee's Provident Contribution to 1437.62 2003-12 Funds and Miscellaneous Provident and Provisions Act, 1952 Pension Fund

b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Cess etc which have not been deposited on account of any dispute except as given below:

Statute Nature of Forum where Amount Period Tax Dispute is (Rs. in to which Pending Lacs) amount relates

The Income Income Tax High Court 47.32 1976-77 & Tax Act, 1961 Assessing 597.01 2010-11 officer CIT (Appeals) 41.51 2005-07

The Central Central ACCT 2.41 2004-05 Sales Tax Act, Sales Tax WBCT 1.72 2007-08 1956

The West Bengal Interest ACCT 1.35 1996-97 & Sales Tax Act, 1997-98 1994 Sales Tax ACCT 2.39 2004-05

The West Bengal VAT WBCT 16.77 2007-08 Value Added Tax, Senior Joint 232.88 2008-10 2003 Commissioner

X. The accumulated losses of the company have exceeded fifty percent of its net worth. The Company has incurred cash losses during the financial year and immediately preceding financial year.

XI. The company has defaulted in repayment of interest on cash credit which has become due and amount outstanding in this respect as on 31st March, 2012 is Rs. 433.37 lacs.

XII. The Company has not granted any loan and advances on the basis of security by way of pledge of shares, debentures and other security.

XIII. In our opinion, the Company is not a chit fund or nidhi/mutual benefit fund/society. Therefore, the provisions of the clause 4 (XIII) of the said order 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 provision of clause 4 (XIV) of the Order is not applicable to the Company.

XV. The Company has not given any guarantee during the year for loan taken by others. Guarantees given in earlier years to group/associate companies in respect of loans taken by them from banks and financial institutions, considering the long term involvement with those companies when issued was not prima facie prejudicial to the interest of the Company.

XVI. As per the information and explanations given to us, no fresh term loan has been taken during the year.

XVII. According to the information and explanation given to us, on an overall examination of the Balance Sheet of the Company, we report that funds amounting to Rs.15,670 lacs raised on short-term basis have been used for long term investment, i.e., for funding losses of the Company.

XVIII. The Company has not made any preferential allotment of shares to parties and companies required to be covered, in the Register maintained under Section 301 of the Act, during the year.

XIX. The Company has not issued any secured debentures during the year. Accordingly, clause 4 (XIX) of the order is not applicable to the company.

XX. The Company has not raised any money through a public issue during the year.

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

2. Without qualifying our report, we draw attention to Note 29.1 and 29.2 to the financial statements regarding impact of the rehabilitation scheme sanctioned by the BIFR and the manner in which these are dealt with while preparing these financial statements. Certain provisions of the scheme as given in Note 29.2 are however pending implementation and will be given effect to on disposal of matter by the Appellate Authority for Industrial and Financial Reconstruction (AAIFR)

3. Attention is invited to the following notes to the financial statements, impacts whereof are presently not ascertainable:

a) Note 10 (a) (i) and (ii) regarding shortfall in value of loans and advances given to certain companies;

b) Note 32 regarding non-provision of Rs. 811.67 lacs demanded by the appropriate authorities as "Salami" on renewal of lease in certain circumstances; and

c) Note 34 regarding payment of managerial remuneration amounting to Rs 597.29 lacs (including Rs.105.78 lacs for the year) which is subject to approval of the Central Government.

4. Further to above, we report that:

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

b) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement referred to in this report are in agreement with the books of account;

c) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books;

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

e) Attention is invited to Note 31 to the financial statements regarding the Company's contention, for applicability of section 274(1)(g) of the Act. As per the legal opinion received on which we have placed reliance, the directors of the Company are not disqualified from being appointed as directors in terms of Section 274(1)(g) of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, subject to our remarks as given in Para 3 above impact whereof are presently not ascertainable, and read together with the other notes thereon, these accounts 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:

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 and Loss, of the profit of the Company for the year ended on that date; and

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

For LODHA & CO. Chartered Accountants Firm ICAI Membership no. 301051E

R. P. Singh Partner Membership No. 52438

Place : Kolkata Dated : 27th July, 2012


Mar 31, 2010

We have audited the attached Balance Sheet of Duncans Industries Limited as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date. These financial statements of the company 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 from material misstatements. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 (“the order”), as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government in exercise of the powers conferred by Section 227 (4A) of the Companies Act 1956, (“the Act”) and according to the information and explanations given to us and subject to non availability of certain details and records as given in paragraph 4 below on the basis of such checks as we considered appropriate, we state that :

I. a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets except in respect of Fertilizer division where such records are not accessible.

b) All the fixed assets have not been verified by the management during the year but according to the information and explanations given to us, there is a regular programme of verification which, in our opinion, is reasonable having regard to the size and the nature of its assets. However, as stated in Note 9(c)(ii) of Schedule No. 12 in case of Fertiliser Division such verification has not been carried out. In respect of assets verified during the year, no material discrepancies have been noticed.

c) In our opinion, during the year, the company has not disposed off substantial part of its fixed assets.

II. a) The inventory, as explained to us, has been physically verified by the management in a phased manner. In respect of Fertilizer Division as given in Note 9(c) (i) of Schedule 12 such verification could not be carried out. No confirmations with respect to stock lying with third parties were obtained. In respect of certain materials stored in heaps such verification has been done on the basis of visual estimation/survey and/or volumetric measurement technique.

b) In our opinion, read together with Para (II) (a) above, the procedure of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) In our opinion, read with Note 9(c) (i) of Schedule 12 the company has maintained proper records of its inventory and as explained to us, the discrepancies observed on such verification between the physical stock and the book records were not material and have been properly dealt with in the books of account.

III. a) During the year, the Company has not granted any loan secured or unsecured to any company, firm or other party covered in the Register maintained under Section 301 of the Act. In respect of the unsecured loan given in earlier years to a company covered in the register maintained under said section, the aggregate maximum amount involved and the year end balance was Rs.1685 lacs. The said loan continues to be interest free and yet to be repaid as indicated in Note 20 of Schedule 12.

b) The amount has been advanced as promoters contribution and in the absence of any specific terms for repayment etc it is not possible to ascertain and comment whether the same is prima facie prejudicial to the interest of the Company. Accordingly, clause III (c) and (d) are not applicable to the company.

c) The Company, during the year has not taken any loan secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, clause 4 (III) (e) to (g) of the order are not applicable to the company.

IV. In our opinion, and having regard to the nature and exigencies of business and the practices followed and the explanation that certain items purchased are of a special nature and therefore in certain cases alternative quotations are not available, there is an adequate internal control procedure commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct the major weaknesses in internal controls.

V. According to information and explanation given to us and as per the records of the company, there is no transaction that needs to be entered, in the Register maintained under Section 301 of the Act. Accordingly, the provisions of the clause 4 (v) (b) of the said order is not applicable to the Company.

VI. Deposits accepted by the company in earlier years which were in excess of the limits prescribed for the purpose are due for repayment. The Company Law Board (CLB) on an application made by the Company, rescheduled the repayment of deposits vide its order dated 18th June 2002. However, the rescheduled terms and conditions could also not be adhered to and the matter has been dealt with as stated in the Note 10 of Schedule 12.

VII. The Companys internal audit in respect of the tea division has been conducted in a phased manner by a firm of Chartered Accountants. In the Fertilizer division of the Company, no such audit was carried out during the year. Accordingly, internal audit system needs to be strengthened further.

VIII. We have been explained that in the absence of any production of Urea during the year no cost records are required to be maintained. Further in respect of Tea division, on the basis of records produced, we are of the opinion that prima facie the cost records and accounts prescribed by the Central Government under Section 209(1) (d) of the Act have been maintained. However, we have not carried out any detailed examination of such records with a view to determine whether they are accurate or complete.

IX. a) As stated in Note 11 of Schedule 12 outstanding dues in respect of Employees Provident Fund is deposited in terms of repayment schedule provided by the appropriate authorities. Having regard to this and according to the information and explanations given to us the company is generally regular in depositing with appropriate authorities undisputed statutory dues in respect of Provident Fund, Investor Education & Protection Fund, Sales Tax, Cess, Professional Tax and other material statutory dues applicable to it. The details of material statutory dues outstanding for a period exceeding six months as provided for in the accounts are given below:

Statute Nature of Amount Period to which the

Dues (Rs. in amount relates to

Lacs)

The Income Tax Act, 1961 Tax Deducted 33.54 2003-04 to 2006-07

at Source

Bihar Sales Tax Turnover Tax 17.54 2001-2003

The Central Sales Sales Tax 36.40 2002-03 to 2004-05

Tax Act, 1956

The West Bengal Sales Purchase Tax 2.91 2004-05 to 2008-09

Tax Act, 1944

b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except as given below:

Statute Nature of Forum where Amount Period to which

Tax Dispute is (Rs. in amount relates

Pending Lacs)

The Income Income Tax High Court 47.32 1976-77 &

Tax Act, 1961 1977-78

The Central Sales Central Sales ACCT 3.64 2004-05

Tax Act, 1956 Tax

The West Bengal Interest ACCT 1.34 1996-97& 1997-98

Sales Tax Act, Sales Tax ACCT 9.31 2004-05

1994

The Central Excise Duty Commissio ner 86.60 March94

Excise Act, 1944 to June95

X. The accumulated losses of the company have exceeded fifty percent of its net worth. The Company has not incurred cash losses during the financial year covered by our audit but had incurred cash losses in the immediately preceding financial year. The effect of qualifications has not been taken into consideration for the purpose of making comment in respect of this clause.

XI. As stated in Note 8.1 of schedule 12 amounts payable to Banks and Financial institutions have been restructured/rescheduled. The details of default in payment of dues to bank and financial institution and debenture holders considering the said restructured terms and conditions and in cases where such restructured terms are pending acceptances are as follows:

Type Period of default Principal Interest Total

(Rs. in lacs) (Rs. in lacs) (Rs. in lacs)

Debentures 2001-03 to2009-10 1,638.15 1,254.90 2,893.05

Financial

Institutions 2001-03 to2009-10 14,640.31 8,041.37 22,681.68

Banks 2009-10 7,994.50 3,446.95 11,441.45

24,272.96 12,743.22 37,016.18

As given in Note 22.2 in Schedule 12 amount of additional / penal interest etc., are presently not ascertainable and therefore the same has not been included in the above amounts. However, the Companys Draft Rehabilitation Scheme (DRS) is pending with the BIFR and as given in Note 8.3 of Schedule 12, the amounts payable to Banks and financial Institutions will finally be determined and given effect to on sanction of the scheme and as such amounts arrived as above are subject to the impact on sanction of the DRS by BIFR.

XII. The Company has not granted any loan and advances on the basis of security by way of pledge of shares, debentures and other security.

XIII. In our opinion, the Company is not a chit fund or nidhi / mutual benefit fund / society. Therefore, the provisions of the clause 4 (XIII) of the said order 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 provision of clause 4 (XIV) of the Order is not applicable to the Company.

XV. The Company has not given any guarantee during the year for loan taken by others. Guarantees given in earlier years to group/associate companies in respect of loans taken by them from banks and financial institutions, considering the long term involvement with those companies when issued was not prima facie prejudicial to the interest of the Company.

XVI. As per the information and explanations given to us, no fresh term loan has been taken during the year.

XVII. According to the information and explanation given to us and in view of Note 8.1 of Schedule 12 and on an overall examination of the Balance Sheet of the Company, we report that funds amounting to Rs 75,615 lacs raised on short-term basis have been used for long term investment, i.e., for funding losses of the Company.

XVIII. The Company has not made any preferential allotment of shares to parties and companies required to be covered, in the Register maintained under Section 301 of the Act, during the year.

XIX. The Company has not issued any secured debentures during the year. Accordingly, clause 4 (XIX) of the order is not applicable to the company.

XX. The Company has not raised any money through a Public issue during the year.

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

2. As indicated in Note 7 of schedule 12, pending approval of the Draft Rehabilitation Scheme (DRS) by BIFR, the accounts have been prepared on a going concern basis. However, its ability to continue as a going concern is dependent upon the rehabilitation measures which are yet to be finalized and implemented and its future performance and the profitability, on which we are unable to express any opinion presently.

3. As indicated in Note 20 of Schedule 12, regarding loan given to a company and effective recovery thereagainst and resultant impact thereof on the losses if any is presently not ascertainable.

4. As indicated in Note 9 and 24 of Schedule 12, relevant records and details in respect of Fertilizer Division and certain records, confirmations and reconciliation for the purpose of the audit, were not available and certain year end verification exercises as such could not be carried out. In view of the above and in the absence of relevant details/records and/or full information/ reconciliations/confirmations, we are unable to express any opinion on the extent of adjustments arising there from and their impact on amounts of various assets and liabilities, contingent liabilities, expenses and income and impact thereof on the profit of the Company.

5. Attention is invited to the following Notes in Schedule 12 :

a) Note 12 regarding non provision of various employee related expenses amounting to Rs. 2546 lacs (including Rs.858 lacs for the year) and thereby profit for the year is higher to the extent of Rs. 858 lacs and the accumulated balance is lower to the extent of Rs. 2546 lacs.

b) Note 8.1(a), 8.1 (b)and Note 22.1 regarding non-provision of interest of Rs. 22888.26 lacs (including Rs. 5673.54 lacs for the year) on certain borrowings and Note 4 and 22.2 regarding differential/penal interest etc. on various statutory and other liabilities, borrowings, creditors, etc. due to the reason mentioned in Note 22.3. Impact with respect to the same on the accounts pending finalization of DRS is presently not ascertainable

c) Note 23(b) regarding non ascertainment of liability related to employee benefits under defined benefit plans pertaining to Fertilizer division and those related to Superannuation Fund thereof as required in terms of AS 15.

6. Further attention is also invited to the following Notes in Schedule 12, impacts whereof are presently not ascertainable:

a) Note 3.2 regarding non recognition of the liability for surcharge on electricity demanded by Kanpur Electric Supply Co;

b) Note 6.2 regarding non availability of details regarding micro, small and medium enterprise as defined under Micro, Small and Medium Enterprise Development Act,2006 ,

c) Note 8.3 regarding impact of the various proposals envisaged in the DRS pending sanction thereof by BIFR.

d) Note 18.5 regarding non-provision of Rs. 811.67 lacs demanded by the appropriate authorities as “Salami” on renewal of lease in certain circumstances; and

e) Note 32.2 regarding payment of managerial remuneration amounting to Rs 392.81 lacs (including Rs.47.54 lacs for the year) which is subject to approval of the Central Government.

7. We further report that, without considering Para 2 to 4,5(b) to (d) and 6 impacts of which on the companys profit for the year and the accumulated balance thereof have not been ascertained and as such cannot be commented upon by us, had the impact of items 5 (a ) above been considered, the profit for the year would have been Rs.132.75 lacs as against the reported profit of Rs.990.75 lacs and accumulated balance thereof would have been Rs.145719.27 lacs as against the reported figures of Rs.143173.27 lacs.

8. Further to above, we report that:

a) Subject to Para 4 and Para 6(b) above, 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) The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account;

c) In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of such books;

d) In our opinion, excepting provision/ascertainment of certain employee related expenses and disclosure in terms of Accounting Standard 15 on Employee Benefits as stated in Note 23(b) of Schedule 12 and non ascertainment of contingent liabilities and disclosures thereof in respect of Fertilizer Division as required in terms of Accounting Standard 29 on Provisions, Contingent Liabilities and Contingent Assets, the Balance Sheet, Profit and Loss Account, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section 3(c) of Section 211 of the Act;

e) In view of the defaults made in repayment of deposits and interest thereon reference is invited to Note 13 of schedule 12 regarding the Companys contention, for applicability of section 274(1)(g) of the Act. In view of the legal opinion received on which we have placed reliance, the Directors of the Company are not disqualified from being appointed as directors in terms of Section 274(1)(g) of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, subject to our remarks as given in Para 2 to 6 above whereby excepting as given in Para 7 above, we are unable to ascertain the impact on these accounts and read together with the other Notes thereon, these accounts 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:

i. in the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2010;

ii. in the case of the Profit and Loss Account, of the loss of the Company for the year ended on that date; and

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

For LODHA & CO.

Chartered Accountants

Firm ICAI Membership no. 301051E

R. P. Singh

Place: Kolkata Partner

Dated: 28th July, 2010 Membership No. 52438

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