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Auditor Report of Dynamic Industries Ltd.

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these 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 provision 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 control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on 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 31st 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 of the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.

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

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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, the 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 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 written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 and to our best of our information and according to the explanations given to us :

(i) The Company has disclosed pending litigations which would impact its financial position - Refer Note 35 to the financial statements;

(ii) The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in our Report of even date to the members of Dynamic Industries Limited)

(i) (a) The Company is in the process of compiling fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that all major items of fixed assets were physically verified by the Management at the end of the year and that no discrepancy was noticed on such verification, which on account of proper records being still under compilation, could not be verified.

(ii) (a) The Management of Company has conducted physical verification of inventory at reasonable intervals.

(b) In our opinion, the procedures of physical verification of stocks followed by the management of Company 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 inventories records, in our opinion, the Company is maintaining the proper records of inventories and no material discrepancies were noticed on physical verification.

(iii) 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. Accordingly the clause 3(iii)(a) and 3(iii)(b) of the Order are not applicable to the Company.

(iv) In our opinion and according to information and explanation given to us; there is adequate internal control system commensurate with the size of the Company and the nature of its business, with regard to purchase of inventory and fixed assets and with regard to sale of goods and services. Further on the basis of our examination of books and records of the Company, and according to the information and explanations given to us, we have not observed any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) The Company has not accepted any deposits as defined in The Companies (Acceptance of Deposits) Rules 2014. Accordingly, the provisions of Clause 3(v) of the Order are not applicable to the Company.

(vi) According to information and explanations given to us, the Central Government has not prescribed maintenance of cost records under section (1) of Section 148 of the Companies Act, 2013.

(vii) (a) According to the information given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues and Company had no arrears of such outstanding statutory dues as at 31st March, 2015 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the Company has no disputed outstanding statutory dues as at to 31st March, 2015 other than those stated below

Name of the Statute Nature of Amount Dues Rs. in lacs

Income Tax Act, 1961 Income Tax 59.33

2.11

1.89

Customs Act, 1962 Customs Duty 171.14

Customs Act, 1962 Customs Duty 5.51

Finance Act, 1994 Service Tax 3.2

Name of the Statute Period to which the Forum where amount relates dispute is pending

Income Tax Act, 1961 2002-2003 ITAT, Ahmedabad

2007-2008 CIT(A), Ahmedabad

2012-2013 CIT(A), Ahmedabad

Customs Act, 1962 2006-2007 CESTAT, Ahmedabad & 2007-2008

Customs Act, 1962 2007-2008 CESTAT, Mumbai

Finance Act, 1994 2012-2013 Commissioner (Appeal) Ahmedabad

(c) According to the information and explanations given to us, the amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provision of the Companies Act,1956(1 of 1956) and rules thereunder 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 during the financial year end in the immediately preceding financial year.

(ix) According to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks or debenture holders during the year.

(x) According to the information and explanation given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xi) According to the information and explanation given to us, the Company has applied term loans for the purpose for which the loans were obtained.

(xii) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year under review.

FOR, G. K. CHOKSI & CO. [Firm Registration No. 101895W] Chartered Accountants

Place : Ahmedabad Sd/- Date : 30th May, 2015 ROHIT K. CHOKSI Partner Membership No. 31103


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance of the company in accordance with the Accounting Standards notified under 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.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 audit opinion.

Opinion

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

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

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

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 of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

(b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

(c) the Balance Sheet, Statement of Profit and Loss and 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 notified under 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.

(e) on the basis of written representations received from the directors as on March 31st, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March, 31st, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in our report of even date to the members of Dynamic Industries Limited)

1 (a) The Company is in the process of compiling fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that all major items of fixed assets were physically verified by the Management at the end of the year and that no discrepancy was noticed on such verification, which on account of proper records being still under compilation, could not be verified.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory has been conducted by the management at reasonable intervals.

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

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained u/s.301 of the Companies Act, 1956. Accordingly the clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the report are not applicable.

(b) As per the information and explanations given to us, the Company has taken loans from one party covered in the register maintained u/s. 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs. 60,00,000 (PY Rs. Nil) and the year end balance is Rs. NIL (PY. Rs. NIL).

(c) In our opinion, the rate of interest and other terms and conditions on which the loans have been availed from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are prima facie not prejudicial to the interest of the company.

(d) As per the information and explanations given to us, principal amount and interest thereon has been repaid during the year.

4 In our opinion and according to information and explanation given to us; there is adequate internal control system commensurate with the size of the Company and the nature of the business, with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5 (a) According to information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given by the management, transactions exceeding Rs. 5 lacs made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6 In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8 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 cost records with a view to determine whether they are accurate or complete.

9 (a) According to the information given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues and the Company had no arrears of such outstanding statutory dues as at 31st March, 2014 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the Company had no disputed outstanding statutory dues as at 31st March, 2014 other than those stated below:

Name of the Statute Nature of Amount Period Dues Rs. in lacs Which the amount relates

Income Tax Act, 1961 Income Tax 78.29 2003-2004 2006-2007 Customs Act, 1962 Customs Duty 171.14 & 2007-2008

Customs Act, 1962 Customs Duty 5.51 2007-2008 Finance Act, 1994 Service Tax 28.67 2006-2007 & 2007-2008



Name of the Statute Forum where dispute is pending

Income Tax Act,1961 CIT(A), Ahmedabad

Customs Act, 1962 CESTAT, Ahmedabad Customs Act, 1962 CESTAT, Mumbai

Finace Act, 1994 Gujarat High Court

10 The Company does not have any accumulated losses as at 31st March, 2014 and it has not incurred any cash loss in the financial year ended on that date or in the immediately preceding financial year.

11 According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12 As per the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/Societies are not applicable to the company.

14 According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

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

16 In our opinion, the term loans have been applied for the purpose for which they were raised.

17 On the basis of an overall examination of the balance sheet of the company in our opinion and according to the information and explanations given to us, the company has not utilised any funds raised on short term basis for long term investments.

18 The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the period under review.

20 The company has not raised any money by public issues during the year under review.

21 According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period under review.

FOR, G. K. CHOKSI & CO. [Firm Registration No. 101895W] Chartered Accountants

Place : Ahmedabad Sd/- Date : 30th May,2014 ROHIT K. CHOKSI Partner Membership No. 31103


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 audit opinion.

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31 st, 2013;

b) in the case of the Statement of Profit and Loss, of the profit forthe 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. 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 of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we reportthat:

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

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books.

c) the Balance Sheet, Statement of Profit and Loss and 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 sub-section (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31 st, 2013 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31st, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in our report of even date to the members of Dynamic Industries Limited)

1 (a) The Company is in the process of compiling fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that all major items of fixed assets were physically verified by the Management at the end of the year and that no discrepancy was noticed on such verification, which on account of proper records being still under compilation, could not be verified.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory has been conducted by the management at reasonable intervals.

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

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956. Accordingly the clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the report are not applicable.

(b) As per the information and explanations given to us, the Company has not taken any loans from parties covered in the register maintained u/s 301 of the Companies Act, 1956. Hence, this clause is not applicable.

4 In our opinion and according to information and explanation given to us; there is adequate internal control system commensurate with the size of the Company and the nature of the business, with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5 (a) According to information and explanations provided by the management, there are no contracts or arrangements referred to in section 301 of the act which required to be entered in the register maintained under that section.

(b) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into transactions, which required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956.

6 In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA orother relevant provisions of the act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8 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 facia the prescribed cost records have been maintained. We have however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9 (a) According to the information given to us, the Company is generally regular in depositing with appropriate

authorities undisputed statutory dues and the Company had no arrears of such outstanding statutory dues as at 31st March, 2013 for a period more than six months from the date they became payable.

10 The Company does not have any accumulated losses as at 31s'' March, 2013 and its has not incurred any cash loss in the financial year ended on that date or in the immediately preceding financial year.

11 According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12 As perthe information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit Fund, Nidhi or Mutual Benefit Funds / Societies are not applicable to the company.

14 According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

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

16 In our opinion, the term loans have been applied for the purpose for which they were raised.

17 On the basis of an overall examination of the balance sheet of the company in our opinion and according to the information and explanations given to us, the company has not utilized any funds raised on short term basis for long term investments.

18 The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 ofthe Companies Act, 1956.

19 The Company has not issued any debentures during the period under review.

20 The company has not raised any money by public issues during the year under review.

21 According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period under review.

FOR, G. K. CHOKSI & CO.

[Firm Registration No. 101895W]

Chartered Accountants

Place : Ahmedabad Sd/-

Date : 30th May, 2013 ROHIT K. CHOKSI

Partner

Membership No. 31103


Mar 31, 2012

1. We have audited the attached Balance Sheet of Dynamic Industries Limited as at 31st March, 2012 and statement of Profit and Loss and 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 misstatements. 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 statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Particular attention is drawn:

The company has not yet compiled the requisite information, related to suppliers who have registered themselves under the Micro, Small and Medium Enterprises Development Act, 2006. In the absence of relevant information the requisite disclosures are not made in the financial statements.

5. Further to our comments in the Annexure referred at para 3 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 purposes of our audit.

b. In our opinion, subject to matters stated at para 4 above and 1(a),1(b) and 8 of annexure to the auditors' report below, proper books of account have been kept by the Company as required by law 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 sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representation received from the directors of the company as at 31st March, 2012 and taken on record by the board of directors, we report that none of the directors is disqualified from being appointed as director of company 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 explanations given to us, the said accounts, subject to para 4 above, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view; in conformity with the accounting principles generally accepted in India:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012

b. In the case of the Statement of Profit and Loss, of the profit for the year ended on that date.

and

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

ANNEXURE TO THE AUDITORS' REPORT

Re: Dynamic Industries Limited

Referred to in paragraph 3 of our report of even date,

1 (a) The Company is in the process of compiling fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that all major items of fixed assets were physically verified by the Management at the end of the year and that no discrepancy was noticed on such verification, which on account of proper records being still under compilation, could not be verified.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory has been conducted by the management at reasonable intervals.

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

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained u/s.301 of the Companies Act, 1956. Accordingly the clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the report are not applicable.

(b) (i) As per the information and explanations given to us, the Company has taken unsecured loan from one party covered in the register maintained u/s.301 of the Companies Act, 1956. The balance outstanding on ac- count of this loans as at the end of the year was t Nil and the maximum amount involved during the year wereRs. 15.42 lacs.

(ii) The terms and conditions of the above loans are prima facie not prejudicial to the interest of the Company.

(iii) As per the information and explanations given to us, repayment of principal amounts as well as interest have been regular during the year, whenever it is fallen due for repayment.

4 In our opinion and according to information and explanation given to us; there is adequate internal control system commensurate with the size of the Company and the nature of the business, with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5 (a) According to information and explanations provided by the management, there are no contracts or arrangements referred to in section 301 of the act which required to be entered in the register maintained under that section.

(b) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into transactions (expect loans as mentioned in paragraph 3(b) above), which required to be entered in the register maintained in pursuance of section 301 of the Companies Act, 1956.

6 In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8 On the basis of examination of records, in our opinion, the company has not updated and maintained cost records which' has been prescribed under section 209(1) (d) of the Companies Act, 1956.

9 (a) According to the information given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues and the Company had no arrears of such outstanding statutory dues as at 31st March, 2012 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the Company had no disputed outstanding statutory dues as at 31st March, 2012 other than those stated below:

Particulars Amount Period to which Forum where (Rs. in Lacs) the amount relates dispute is pending

Commissioner of Income Tax Act, 1961 5.06 2000-2001 Income Tax (Appeal)

Income Tax Act, Commissioner of 1961 7.24 2007-2008 Income Tax (Appeal)

Income Tax Act, 1961 78.29 2003-2004 Assessing Officer

2006-2007 & Appropriate Custom & Excise Duty 171.14 2007-2008 Authorities

10 The Company does not have any accumulated losses as at 31st March, 2012 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11 According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12 As per the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/Societies are not applicable to the company.

14 According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

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

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. On the basis of an overall examination of the balance sheet of the company in our opinion and according to the information and explanations given to us, the company has not utilised any funds raised on short term basis for long term investments.

18 The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the period under review.

20. The company has not raised any money by public issues during the year under review.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period under review.

FOR, G. K. CHOKSI & CO.

[Firm Registration No. 101895W] Chartered Accountants

ROHIT K. CHOKSI Place: Ahmedabad. Partner

Date: 30th May, 2012 Membership No. 31103


Mar 31, 2011

1. We have audited the attached Balance Sheet of Dynamic Industries Limited as at 31 st March, 2011 and Profit and Loss Account and 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 misstatements. An audit includes examining, on a test basis evidence supporting, the amounts and disclo- sures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Particular attention is drawn:

(i) Adhering to significant accounting policy, as referred to para (i) of schedule -12 ieave encashment payable on retirement has been provided in the books based on computation made by the company and not in accordance with actuarial valuation. Thus, the provision made is not in compliance with Accounting Standard 15 (Revised) "Employee Benefits" issued by Institute of Chartered Accountants of India the differential impact is not presently ascertained.

(ii) The company has not yet compiled the requisite information, related to suppliers who have registered themselves under the Micro, Small And Medium Enterprises Development Act, 2006. In the absence of relevant information the requisite disclosures are not made in the financial statements.

5. Further to our comments in the Annexure referred at para 3 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 purposes of our audit.

b. In our opinion, subject to matters stated at para 4 above and 1(a),1(b) and 8 of annexure to the auditors' report below, proper books of account have been kept by the Company as required by law so far as appears from our examination of those books.

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agree- ment with the books of account.

d. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the account- ing standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except para 4(i) above regarding leave encashment payable at the time of retirement in accordance with Accounting Standard-15.

e. On the basis of written representation received from the directors of the company as at 31st March, 2011 and taken on record by the board of directors, we report that none of the directors is disqualified from being appointed as director of company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

g. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to para 4 above, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view; in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011

b. in the case of the Profit and Loss Account, of the profit for the year ended on that date

and

c. in the case of Cash Flow Statement, of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT Re: Dynamic Industries Limited Referred to in paragraph 3 of our report of even date,

1. (a) The Company is in the process of compiling fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that all major items of fixed assets were physically verified by the Management at the end of the year and that no discrepancy was noticed on such verification, which on account of proper records being still under compilation, could not be verified.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory has been conducted by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verifica- tion of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained u/s.301 of the Companies Act, 1956. Accordingly the clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the report are not applicable.

(b) (i) As per the information and explanations given to us, the Company has taken unsecured loan from two parties covered in the register maintained u/s.301 of the Companies Act, 1956. The balance outstanding on account of this loans as at the end of the year was Rs. 14.15 lacs and the maximum amount involved during the year were Rs. 26.54 lacs.

(ii) The terms and conditions of the above loans are prima facie not prejudicial to the interest of the Company.

(iii) As per the information and explanations given to us, repayment of principal amounts as well as interest have been regular during the year, whenever it is fallen due for repayment.

4. In our opinion and according to information and explanation given to us; there is adequate internal control system commensurate with the size of the Company and the nature of the business, with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangement referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursu- ance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act,1956 and exceeding the value of Rs.5,00,000/- in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for items stated to be of specialized nature, where no comparison is possible.

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the act.

7. In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8. On the basis of examination of records, in our opinion, the company has not updated and maintained cost records which has been prescribed under section 209(1 )(d) of the Companies Act, 1956.

9. (a) According to the information given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues and the Company had no arrears of such outstanding statutory dues as at 31st March, 2011 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the Company had no disputed outstanding statutory dues as at 31st March, 2011 other than those stated below:

Particulars Amount Period to Forum where (Rs.) which the dispute is amount relates pending

Income Tax Act, 1961 5,06,003 2000-2001 Commissioner of Income (Appeals)

Income Tax Act, 1961 7,23,930 2007-2008 Commissioner of Income (Appeals)

10. The Company does not have any accumulated losses as at 31st March, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. As per the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/Societies are not applica- ble to the company.

14. According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanation given to us, the company has not given any guaran- tee for loans taken by others from banks and financial institutions during the year.

16. In our opinion, the term loans have been applied for the purpose for which they were raised.

17. On the basis of an overall examination of the balance sheet of the company in our opinion and according to the information and explanations given to us, we report that company has not utilised any funds raised on short term basis for long term investments.

18. The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures during the period under review.

20. The company has not raised any money by public issues during the year under review.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period under review.

FOR, G. K. CHOKSI & CO. Firm Registration No. 101895W Chartered Accountants ROHIT K. CHOKSI Partner Membership No. 31103

Place Ahmedabad. Date 14th May, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Dynamic Industries Limited as at 31 st March, 2010 and Profit and Loss Account and 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.

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 misstatements. 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 statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

4. Particular attention is drawn:

(i) Adhering to significant accounting policy, as referred to para (i) of schedule -12 leave encashment payable on retirement has been provided in the books based on computation made by the company and not in accord- ance with actuarial valuation. Thus, the provision made is not in compliance with Accounting Standard 15 (Revised) "Employee Benefits" issued by Institute of Chartered Accountants of India the differential impact is not presently ascertained.

(ii) The company has not yet compiled the requisite information, related to suppliers who have registered them- selves under the Micro, Small And Medium Enterprises Development Act, 2006. In the absence of relevant information the requisite disclosures are not made in the financial statements.

5. Further to our comments in the Annexure referred at para 3 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 purposes of our audit.

b. In our opinion, subject to matters stated at para 4(i) and 4 (ii) above and 1 (a),1 (b) and 8 of annexure to the auditors report below, proper books of account have been kept by the Company as required by law so far as appears from our examination of those books.

c. The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agree- ment with the books of account.

d. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the ac- counting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except para 4(1) above regarding leave encashment payable at the time of retirement in accordance with Accounting Standard - 15.

e. On the basis of written representation received from the directors of the company as at March 31 st, 2010 and taken on record by the board of directors, we report that none of the directors is disqualified from being appointed as director of company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

g. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to para 4 above, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view; in conformity with the accounting principles generally accepted in India:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2010

b. in the case of the Profit and Loss Account, of the profit for the year ended on that date. and

c. in the case of Cash Flow Statement, of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT Re: Dynamic Industries Limited Referred to in paragraph 3 of our report of even date,

1 (a) The Company is in the process of compiling fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that all major items of fixed assets were physically verified by the Management at the end of the year and that no discrepancy was noticed on such verification, which on account of proper records being still under compilation, could not be verified.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory has been conducted by the management at reasonable inter- vals.

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

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of ihventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained u/s.301 of the Companies Act, 1956. Accordingly the clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the report are not applicable.

(b) (i) As per the information and explanations given to us, the Company has taken unsecured loan from one party covered in the register maintained u/s.301 of the Companies Act, 1956. The balance outstanding on account of these loans as at the end of the year was Rs. 20.24 lacs and the maximum amount involved during the year were Rs. 30.51 lacs.

(ii) The terms and conditions of the above loans are prima facie not prejudicial to the interest of the Com- pany.

(iii) As per the information and explanations given to us, repayment of principal amounts as well as interest have been regular during the year, whenever it is fallen due for repayment.

4 In our opinion and according to information and explanation given to us; there is adequate internal control system commensurate with the size of the Company and the nature of the business, with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5 (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or

arrangement referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursu- ance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000/- in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for items stated to be of specialized nature, where no comparison is possible.

6 In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8 On the basis of examination of records, in our opinion, the company has not updated and maintained cost records which has been prescribed under section 209(1 )(d) of the Companies Act, 1956.

9 (a) According to the information given to us, the Company is generally regular in depositing with appropriate

authorities undisputed statutory dues and the Company had no arrears of such outstanding statutory dues as at 31st March, 2010 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the Company had no disputed outstanding statutory dues as at 31 st March, 2010 other than those stated below :

Particulars Amount Period to which Forum where (Rs.) the amount relates dispute is pending

Income Tax Act, 1961 1,12,820 2007-2008 Commissioner of Income Tax (Appeals)

10 The Company does not have any accumulated losses as at 31st March, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11 According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12 As per the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/Societies are not applicable to the company.

14 According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

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

16 In our opinion and according to the information and explanations given to us, the company has not obtained any term loans during the year under review. Accordingly clause 4(xvi) of the order is not applicable.

17 On the basis of an overall examination of the balance sheet of the company in our opinion and according to the information and explanations given to us, we report that company has not utilised any funds raised on short term basis for long term investments.

18 The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the period under review.

20. The company has not raised any money by public issues during the year under review.

21. According to the information and explanations given to us, no fraud on or by the Company has .been noticed or reported during the period under review.



FOR, G. K. CHOKSI & CO.

Firm Registration No. 101895W Chartered Accountants

ROHIT K. CHOKSI

Place: Ahmedabad. Partner

Date :29th May, 2010 Membership No. 31103






Mar 31, 2009

1. We have audited the attached Balance Sheet of Dynamic Industries Limited as at 31 st March, 2009 and Profit a| Loss Account and Cash Flow Statement of the company for the year ended on that date annexed thereto. The! financial statements are the responsibility of the companys management. Our responsibility is to express an op| ion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standard require that we plan and perform the audit to obtain reasonable assurance about whether the financial statement are free of material misstatements. An audit includes examining, on a test basis evidence supporting, the amount 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 statement presentation. believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in tern of sub-section (4A) of section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to information and explanations given to us, we enclose in the Annexure a statement of the matters specified in paragraph 4 and 5 of the said order.

4. Particular attention is drawn:

(i) Adhering to significant accounting policy, as referred to para (i) of schedule -12 leave encashment payable of retirement has been provided in the books based on computation made by the company and not in accorcd ance with actuarial valuation. Thus, the provision made is not in compliance with Accounting Standard 1 (Revised) "Employee Benefits" issued by Institute of Chartered Accountants of India the differential impact i not presently ascertained.

(ii) The company has not yet compiled the requisite information, related to suppliers who have registered then selves under the Micro, Small And Medium Enterprises Development Act, 2006. In the absence of relevant information the requisite disclosures are not made in the financial statements.

(iii>. Further to our comments in the Annexure referred at para 3 above, we report that:

a. we have obtained all the information and explanations, which, to the best of our knowledge and belief, wen necessary for the purposes of our audit.

b. In our opinion, subject to matters stated at para 4(i) and 4 (ii) above and 1 (a),1 (b) and 8 of annexure to the auditors report below, proper books of account have been kept by the Company as required by law so far a appears from our examination of those books.

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

d. In our opinion the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the ac counting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, except pan 4(i) above regarding leave encashment payable at the time of retirement in accordance with Accounting Standard -15.

e. On the basis of written representation received from the directors of the company as at March 31 st, 2009 and taken on record by the board of directors, we report that none of the directors is disqualified from being appointed as director of company under clause (g) of sub-section (1) of Section 274 of the Companies Act 1956.

g. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, subject to para 4 above, 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 it India:

a. in the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2009

b. in the case of the Profit and Loss Account, of the profit for the year ended on that date. and -

c. in the case of Cash Flow Statement, of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT Re: Dynamic Industries Limited Referred to in paragraph 3 of our report of even date,

1 (a) The Company is in the process of compiling fixed assets records to show full particulars, including quantitative details and situation of fixed assets.

(b) We were informed that all major items of fixed assets were physically verified by the Management at the end of the year and that no discrepancy was noticed on such verification, which on account of proper records being still under compilation, could not be verified.

(c) The Company has not disposed of any substantial part of its fixed assets during the year as would affect its going concern status.

2 (a) In our opinion, physical verification of inventory has been conducted by the management at reasonable inter vals.

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

(c) On the basis of our examination of records of inventory, in our opinion, the Company is maintaining proper records of inventory. No material discrepancy was noticed on physical verification of the inventory.

3 (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained u/s.301 of the Companies Act, 1956. Accordingly the clauses 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the report are not applicable.

(b) (i) As per the information and explanations given to us, the Company has taken unsecured loan from two parties covered in the register maintained u/s.301 of the Companies Act, 1956. The balance outstanding on account of these loans as at the end of the year was Rs. 30.51 lacs and the maximum amount involved during the year were Rs. 36.71 lacs.

(ii) The terms and conditions of the above loans are prima facie not prejudicial to the, interest of the Com- pany.

(iii) As per the information and explanations given to us, repayment of principal amounts as well as interest have been regular during the year, whenever it is fallen due for repayment.

4 In our opinion and according to information and explanation given to us; there is adequate internal control system commensurate with the size of the Company and the nature of the business, with regard to purchase of inventory and fixed assets, and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in the internal controls.

5 (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangement referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursu- ance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act,1956 and exceeding the value of Rs.5,00,000/- in respect of any party during the period have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for items stated to be of specialized nature, where no comparison is possible.

6 In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or other relevant provisions of the act.

7 In our opinion, the company has an adequate internal audit system commensurate with the size and the nature of its business;

8 On the basis of examination of records, in our opinion, the company has not updated and maintained cost records which has been prescribed under section 209(1 )(d) of the Companies Act, 1956.

9 (a) According to the information given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues and the Company had no arrears of such outstanding statutory dues as at 31st March, 2009 for a period more than six months from the date they became payable.

(b) According to the information and explanations given to us, the Company had no disputed outstanding statu- tory dues as at 31 st March, 2009 other than those stated below:

Particulars Amount Period to which Forum where (Rs.) the amount relates dispute is pending

Income Tax Act, 1961 17,06,422 2002-2003 Income Tax Appellate Tribunal

Commissioner of income Tax Act, 1961 59,32,963 2003-2004 Income Tax (Appeals)

10 The Company does not have any accumulated losses as at 31st March, 2009 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11 According to the records of the company examined by us and on the basis of information and explanations given to us, the company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12 As per the information and explanations given to us, the Company has not granted any loan or advance on the basis of security by way of pledge of shares, debentures and other securities.

13 The provisions of any special statute applicable to Chit fund, Nidhi or Mutual Benefit Funds/Societies are not appli- cable to the company.

14 According to the information and explanation given to us, the company does not deal or trade in shares, securities, debentures and other investments.

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

16. In our opinion and according to the information and explanations given to us, the company has not obtained any term loans during the year under review. Accordingly clause 4(xvi) of the order is not applicable.

17. On the basis of an overall examination of the balance sheet of the company in our opinion and according to the information and explanations given to us, we report that company has not utilised any funds raised on short term basis for long term investments.

18 The company has not made any preferential allotment to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

19 The Company has not issued any debentures during the period under review.

20. The company has not raised any money by public issues during the year under review.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the period under review.

FOR, G. K. CHOKSI & CO. Chartered Accountants

ROHIT K. CHOKSI

Place: Ahmedabad. Partner

Date : 30th June, 2009 Membership No. 31103

 
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