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Auditor Report of Forbes & Company Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of FORBES & COMPANY LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) ofthe 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 prescribed under section 133 ofthe Act, as applicable.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness ofthe 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 and the Order under section 143(11) of the Act.

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. We draw attention to Note 50 to the standalone financial statements relating to loans given to The Svadeshi Mills Company Limited, aggregating Rs.4,391.78 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under section 143(1)(a) oftheAct.

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

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

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

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

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 ofthe Act, as applicable.

e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of section 164(2) ofthe Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29 to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 41B to the standalone financial statements;

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

3. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

ANNEXURE "B" TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in paragraph 3 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date to the members of Forbes & Company Limited on the standalone financial statements for the year ended March 31, 2016)

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

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

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date, except those in the table below. In respect of immovable properties of land that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. Immovable properties of land and buildings whose title deeds have been pledged as security for loans are held in the name of the Company based on the confirmations directly received by us from lenders.

Particulars Amount Remarks of the land (Rs. in lakhs) and building [Carrying amount as at March 31, 2016]

Freehold land and 44.34 The title deeds are in the name of building located at Fal Industries Limited, erstwhile Chennai admeasuring Company that was merged with 0.538 acres and 6,084 the Company under Section 391 Sq.ft, respectively. to 394 of the Companies Act, 1956 in terms of the approval of the Honorable High Court of judicature at Bombay.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

Further, in our opinion and according to the information and explanations given to us, having regard to the nature of inventory related to the property development activity, the physical verification by way of verification of title deeds, site visits by the Management and certification of extent of work completion by competent persons, are at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act.

(iv) The Company has not granted any loans, made investments or provided guarantees to which provisions of sections 185 and 186 of the Act, and hence, reporting under clause (iv) of the Order is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. In respect of unclaimed deposits, the Company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014, as amended. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act for the Engineering Division and the Property Development Division. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under section 148(1) of Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable, except as disclosed below.

Name of statute Nature of dues Amount involved Period to which the amount relates Due date

('' in Lakhs)

Mumbai Municipal Corporation Act, 1988 Property Tax 30.51 April 1, 2013 to March 31, 2015 Various

(c) Details of dues of income-tax, sales tax, service tax, customs duty, excise duty, and, value added tax which have not been deposited as on March 31, 2016 on account of disputes are given below:

Name of Statute Nature of dues Forum where dispute is pending

Income-Tax Act, Income-Tax Income-Tax Appellate Tribunal 1961

Commissioner of Income-Tax (Appeals)

The Central Excise Excise Duty Custom Excise & Service Tax Act, 1944 (including interest and Appellate Tribunal penalty)

Commissioner of Central Excise (Appeals)

Additional Commissioner of Central Excise.

Assistant Commissioner of Central Excise

Sales Tax Laws Sales Tax (including Madras High Court interest and penalty) Sales Tax Appellate Tribunal

Joint Commissioner of Appeals Sales Tax

Assistant Commissioner of Commercial Taxes

Deputy Commissioner of Appeals

Commercial Tax Officer

The Finance Act, Service Tax Commissioner of Service Tax 1994

The Customs Act, Penalty Commissioner (Appeals) 1962

Custom Excise & Service Tax Appellate Tribunal

Karnataka Tax on Entry Tax Custom Excise & Service Tax Entry of Goods, Appellate Tribunal 1979

Wealth Tax Act, Wealth Tax Commissioner of Income Tax 1957 (Appeals)

Mumbai Municipal Property Tax Assistant Assessor and Collector Corporation Act, 1888*

Name of Statute Period to which Amount Amount the amount relates involved unpaid (Rs. In Lakhs) (Rs. In Lakhs)

Income Tax Act,1961 Financial Years: 398.07 144.66 2002-03, 2003-04,and 2004-05

Financial Years: 229.22 201.64 1997-98, 2000-01 and 2012-13

The Central Excise Act,1944 Financial Years: 4,635.88 4,635.88 1995-96, 1999-00, 2003 to 2007.

December 2003 to December 58.90 30.54 2004 and November 2006 to February 2007, 2010-11, April 2011 to September 2012

Financial Years: 54.99 54.99 2000 to 2003

Financial Years: 5.86 4.86 2000 to 2004

Sales Tax Laws Financial Years: 474.38 435.09 1989-90, 1998-99 and 1999-00

Financial Years: 133.38 91.62 1990-91,1991-92, 1992-93, 1993-94, 1994-95,1998-99, 2001-02 and 2002-03

Financial Years: 7,287.90 1,304.03 2005-06,2006-07, 2008-09, 2009-10 and 2010-11.

Financial Years: 172.75 172.75 2000-01, 2001-02, 2002-03, 2003-04, 2004-05 and 2005-06.

Financial Years: 66.36 65.23 1987-88, 1993-94, 1999-00, 2002-03, 2005-06 and 2006-07

Financial Years: 3.95 3.95 2004-05

The Finance Act,1994 Financial Years: 688.38 688.38 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13

The Customs Act,1962 Financial Year: 1.00 0.93 2012-13

August, 2012 1.00 0.90

Karnataka Tax on Entry of Goods, 1979 Financial Years: 76.90 38.45 2001-02, 2002-03, 2003-04, 2004-05, 2006-07, 2007-08, 2008-09

Wealth Tax Act,1957 Financial Years: 2007-08, 409.86 394.92 2008-09, 2009-10 and 2010-11

Mumbai Municipal Corporation Act,1888 Financial Years: 671.60 671.60 2005-06, 2006-07, 2007-08, 2008-09, 2009-10

* Property tax not deposited pending resolution of the representation made by the Company to the Assistant Assessor and Collector, Municipal Corporation of Greater Mumbai against the enhanced rateable value assessed by the said authority.

(viii)In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and dues to debenture holders. The Company has not taken any loans or borrowings from government.

(ix) During the year, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence, reporting under clause (ix) ofthe Order is not applicable.

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

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence, reporting under clause (xii) of the Order is not applicable.

(xiii)In our opinion and according to the information and explanations given to us, the Company is in compliance with sections 188 and 177 of the Act, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv)During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence, reporting under clause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year, the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence, provisions of section 192 of the Act are not applicable.

(xvi)The Company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act, 1934.

For Deloitte Haskins & Sells LLP

Chartered Accountants

(Firm''s Registration No.117366W/W-100018)

Nilesh Shah

(Partner)

(Membership No. 49660)

MUMBAI, May 30, 2016


Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

2. 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 provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. 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.

5. 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 standalone financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal financial control relevant to the Company's preparation and fair presentation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the standalone financial statements.

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

Opinion

7. 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 March 31, 2015, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

9. We draw attention to Note 49 to the standalone financial statements relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,756.77 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 143(1)(a) of the Act.

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

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

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

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

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the directors as on March 31,2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 29 to the standalone financial statements;

ii. The Company has made provision, as required under the applicable accounting standards, for material foreseeable losses, on long-term contracts including derivative contracts - Refer Note 40B to the standalone financial statements;

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

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 8 under "Report on Other Legal and Regulatory Requirements" section of our report of even date to the members of Forbes & Company Limited on the standalone financial statements for the year ended March 31, 2015)

1. In respect of its fixed assets:

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

(b) The fixed assets have not been physically verified by the Management during the year but the Company has a system of verifying the fixed assets once in every two years. In our opinion, the frequency of verification is at reasonable intervals.

2. In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has generally maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

3. 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 Act and accordingly the sub-clauses (a), and (b) of clause (iii) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, the internal control system is generally commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit,we have not observed any major weakness in such internal control system.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014,as amended. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

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

7. According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax,value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and other material statutory dues in arrears, as at March 31,2015 for a period of more than six months from the date they became payable, except as disclosed below.

Name of Nature of Amount Period to Due date statute dues involved which the (Rs. in amount Lakhs) relates

Mumbai Property 10.45 October 1, 2012 December Municipal Tax to March 31, 2013 31, 2012 Corporation Act, 1888 10.45 April 1, 2013 to September September 30, 2013 13, 2013

10.45 October 1, 2013 December to March 31, 2014 31, 2013

(c) Details of dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax and cess which have not been deposited as on March 31,2015 on account of disputes are given below:

Name of Statute Nature of dues

Income-Tax Act, Income-Tax 1961

The Central Excise Excise Duty Act, 1944 (including interest and penalty)

Sales Tax Laws Sales Tax (including interest and penalty)

The Finance Act, Service Tax 1994

The Customs Act, Customs duty (including 1962 penalty)

Karnataka Tax on Entry Tax Entry of Goods, 1979

Mumbai Municipal Property Tax Corporation Act, 1888*



Name of Statute Forum where dispute is pending

Income-Tax Act, Income-Tax Appellate Tribunal 1961

Commissioner of Income-Tax (Appeals)

The Central Excise Additional Commissioner of Central Excise Act, 1944 Custom Excise & Service Tax Appellate Tribunal, New Delhi Custom Excise & Service Tax Appellate Tribunal, Chennai

Custom Excise & Service Tax Appellate Tribunal, Mumbai

Assistant Commissioner of Central Excise Commissioner of Central Excise, Chennai

Commissioner of Central Excise, Mumbai-II

Commissioner of Central Excise, Mumbai-II

Sales Tax Laws Commercial Tax Officer, Chennai Madras High Court

Sales Tax Appellate Tribunal, Cuttack

Sales Tax Appellate Tribunal, Patna

Joint Commissioner of Appeals Sales Tax, Delhi

Joint Commissioner of Appeals Sales Tax, Ahmedabad

Joint Commissioner of Appeals Sales Tax, Kolkata

Joint Commissioner of Appeals Sales Tax, Bangalore

Deputy Commissioner of Appeals, Mumbai

Deputy Commissioner of Appeals, Kolkata

Deputy Commissioner of Appeals, New Delhi

Sales Tax Appellate Tribunal, Mumbai

Asst. Commissioner of (CT) Thiruvanmiyar Assessment Circle

Joint Commissioner of Sales Tax (Appeals), Mumbai

The Finance Act, Commissioner of Service Tax - I, Mumbai 1994

The Customs Act, Commissioner (Appeals), Chandigarh 1962 Custom Excise & Service Tax Appellate Tribunal, Ahmedabad

Karnataka Tax on Karnataka Appellate Tribunal Entry of Goods, 1979

Mumbai Municipal Assistant Assessor and Collector Corporation Act, 1888*



Name of Statute Period to which the amount Amount relates involved (Rs. In Lakhs)

Income-Tax Act, Financial Years: 144.66 1961 2002-03 and 2004-05

Financial Years: 2,644.50 1997- 98; 2000-01 and 2011-12

The Central Excise Financial Years: 2000 to 2003 54.99 Act, 1944 Financial Years: 2003 to 2007 4,624.87

Financial Years: 1995-96 9.38

Financial Years: 1999-00 1.63

Financial Years: 2000 to 2004 4.86

December 2003 to December 21.53 2004 and November 2006 to February 2007

Financial Years: 2010-2011 6.25

April 2011 to September 2012 2.76

Sales Tax Laws Financial Years: 2004-05 3.95

Financial Years: 1989-90, 435.08 1998-99, 1999-00

Financial Years: 1992-93 3.76

Financial Years:1990-91 to 45.66 1993-94

Financial Years: 15.64 2008-09 to 2010-11

Financial Years: 2008-09 1.52

Financial Years: 2009-10 12.72

Financial Years: 2005-06 2.82

Financial Years: 1993-94, 41.50 1999-00

Financial Years: 23.29 2002-03, 2005-06 to 2006-07

Financial Years: 1987-88 0.44

Financial Years: 1994-95, 42.20 1998- 99, 2001-02 to 2002-03

Financial Years: 172.75 2000-01 to 2005-06

Financial Years: 2008-09 1,271.33

The Finance Act, Financial Years: 2007-08 to 688.38 1994 2012- 13

The Customs Act, Financial Years: 2012-13 0.93 1962 Financial Years: 2012-13 0.90

Karnataka Tax on Financial Years: 2001-02 to 38.45 Entry of Goods, 2008-09 1979

Mumbai Municipal Financial Years: 2005-06 to 671.60 Corporation Act, 2009-10 1888*

* Property tax not deposited pending resolution of the representation made by the Company to the Assistant Assessor and Collector, Municipal Corporation of Greater Mumbai against the enhanced rateable value assessed by the said authority.

(d) The Company has been regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder within time.

8. The accumulated losses of the Company as at the end of the financial year are less than fifty percent of its net worth and the Company has not incurred cash losses during the financial year covered by our audit and has incurred cash losses in the immediately preceding financial year.

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

10. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

11. In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

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

For Deloitte Haskins & Sells LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Nilesh Shah Partner (Membership No.49660)

MUMBAI, May 26, 2015


Mar 31, 2014

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

2. We draw attention to Note 50 to the financial statements relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,756.77 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 227(1A)(a) of the Companies Act, 1956.

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

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

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

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

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

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

(i) Having regard to the nature of the Company''s business / activities results during the year, clauses (xii), (xiii), (xiv), (xviii) and (xx) of paragraph 4 of the Order are not applicable.

(ii) In respect of its fixed assets:

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

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

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

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has generally maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, the internal control system is generally commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

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

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

(b) Such transactions in excess of Rs. 5 Lakhs are only in respect of reimbursement of expenses where the question of comparision with prevalent market prices at the relevant time does not arise.

(vii) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

(viii) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(ix) 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 made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable except as disclosed below

Name Nature Amount Period to Due Date of of Involved which the Statute Dues ( Rs. in Amount Lakhs) Relates

Muncipal Property 10.45 1-April- 13th Corporation Tax 2013 to September, of Greater 30-September- 2013 Mumbai 2013

(c) Details of statutory dues that have not been deposited as at 31st March, 2014 on account of disputes which relate to Income Tax, Sales Tax, Wealth Tax, Excise Duty, Service tax and other material statutory dues (being property tax) are given below:

Statute Nature of dues Forum where dispute is pending Period to which the amount Amount relates (Rs. In Lakhs)

Income- Tax Act, Income-Tax Income-Tax Appellate Tribunal Assessment Years :- 144.66 1961 2003-04 to 2005-06

Commissioner of Income-Tax (Appeals) Assessment Years :- 118.04 1998-99 and 2001-02

Sales Tax Laws Sales Tax (including Commercial Tax Officer, Chennai 2004-05 3.95 interest and penalty) Madras High Court 1989-90, 1998-99, 1999-00 435.08

Sales Tax Appellate Tribunal, Cuttak 1992-93 3.76

Sales Tax Appellate Tribunal, Patna 1990-91 to 1993-94 45.66

Joint Commissioner of Appeal Sales Tax, Delhi 2008-09 to 2010-11 17.30

Joint Commissioner of Appeal Sales Tax, 2008-09 1.52 Ahmedabad

Joint Commissioner of Appeal Sales Tax, 2009-10 12.72 Kolkata

Joint Commissioner of Appeal Sales Tax, 2005-06 2.82 Bangalore

Deputy Commissioner of Appeals, Mumbai 1993-94, 1999-00 41.50

Deputy Commissioner of Appeals, Kolkata 2002-03, 2005-06 to 2006-07 23.29

Deputy Commissioner of Appeals, New Delhi 1987-88 0.44

Sales Tax Appellate Tribunal, Mumbai 1994-95,1998-99, 2001-02 to 42.20

2002-03

Asst. Commissioner of (CT) Thiruvanmiyar 2000-01 to 2005-06 172.75 Assessment Circle

The Central Excise Excise Duty Additional Commissioner of Central Excise 2000 to 2003 54.99 Act, 1944 (including interest and Custom Excise & Service Tax Appellate 2003 to 2007 4,624.87 penalty) Tribunal, New Delhi

Custom Excise & Service Tax Appellate 1995-96 9.38 Tribunal, Chennai

Custom Excise & Service Tax Appellate 1999-00 1.63 Tribunal, Mumbai

Assistant Commissioner of Central Excise 2000 to 2004 4.86

Commissioner of Central Excise, Chennai December 2003 to December 21.53 2004 and November 2006 to February 2007

Commissioner of Central Excise, Mumbai-II 2010-2011 6.25

The Finance Act, Service Tax Commissioner of Service Tax - I, Mumbai 2007-08 to 2012- 13 688.90

1994 Commissioner of Central excise, Aurangabad October 2009 to September 2.11 2011

Karnataka Tax on Entry Tax Karnataka Appellate Tribunal 2001-02 to 2008-09 38.45 Entry of Goods, 1979

Muncipal Property Tax Assistant Assessor & Collector, 2005-06 to 2009-10 671.60 Corpora tion of Greater Mumbai*

* Property tax not deposited pending resolution of the representation made by the Company to the Assistant Assessor & Collector, Municipal Corporation of Greater Mumbai against the enhanced ratable value assessed by the said authority.

(xi) The accumulated losses of the Company at the end of the financial year are less than fifty per cent of its net worth and the Company has incurred cash losses during the financial year covered by our audit but has not incurred cash losses in the immediately preceding financial year.

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

(xiii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xiv) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xv) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis aggregating approximately Rs. 211.08 lakhs have been used for long-term investments.

(xvi) According to the information and explanations given to us, the Company has created security in respect of debentures issued.

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



For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm''s Registration No. 117366W/W-100018)



Rajesh K. Hiranandani

Partner

(Membership No.36920)

MUMBAI, 27th May, 2014


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

2. We draw attention to Note 49 to the financial statements relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,756.77 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 227(1A)(a) of the Companies Act, 1956.

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

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

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

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

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

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

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

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

i. Having regard to the nature of the Company''s business / activities / results during the year, clauses (xii), (xiii), (xiv), (xv), (xviii) and (xx) of paragraph 4 of the Order are not applicable.

ii. In respect of its fixed assets:

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

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

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

iii. In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has generally maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iv. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

v. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, the internal control system is generally commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

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

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

(b) Such transactions in excess of Rs. 5 Lakhs are only in respect of reimbursement of expenses where the question of comparison with prevalent market prices at the relevant time does not arise.

vii. According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

viii. In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

ix. 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.

x. According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Customs Duty, Excise Duty and other material statutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable except for the following:

Name of the Statute Nature Amount (Rs. In Lakhs) Due Date

The Bombay Labour Welfare Fund Act, 1953 Unpaid Wages and Bonus 0.38 Prior to 31st December 2009

(c) Details of statutory dues that have not been deposited as at 31st March, 2013 on account of disputes which relate to Income Tax, Sales Tax, Wealth Tax, Excise Duty and Service tax are given below:

Statute Nature of dues Forum where dispute is pending Period to which the amount Amount relates (Rs. In Lakhs)

Income- Tax Act, Income-Tax Income-Tax Appellate Tribunal Assessment Years:- 562.88 1961 1989-90, 1997-98, 2004-05 to 2006-07

Commissioner of Income- Tax Assessment Years:- 505.51 (Appeals) 1991-92, 1992-93, 1998-99, 2001-02, 2007-08, 2008-09

Wealth Tax Act, Wealth Tax Commissioner of Wealth Tax Assessment Years:- 19.74 1957 (Appeals) 1996-97 to 2000-01

The aforesaid dues exclude property tax of Rs. 551.60 Lakhs not deposited pending resolution of the representation made by the Company to the Assistant Assessor & Collector, Municipal Corporation of Greater Mumbai against the enhanced ratable value assessed by the said authority.

xi. The accumulated losses i.e. deficit in the statement of profit and loss of the Company as at the end of the financial year, deducted from the Reserves and Surplus, are less than fifty per cent of its net worth and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

xiii. In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

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

xv. According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 60 debentures of Rs. 100 Lakhs each and 400 debentures of Rs. 10 Lakhs each. The Company has created security in respect of the debentures issued.

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 117366W)

Rajesh K Hiranandani

Partner

MUMBAI, 28th May, 2013 (Membership No. 36920)


Mar 31, 2012

1. We have audited the attached Balance Sheet of FORBES & COMPANY LIMITED ("the Company") as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and the 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.

3. Attention is invited to Note 50 to the financial statements relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,756.77 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 227(1A)(a) of the Companies Act, 1956.

4. Without qualifying our opinion, we draw attention to Note 39 to the financial statements regarding provision not having been made in the previous year for the loss of Rs. 513.33 lakhs, materialised during the period 1st April, 2011 to 30th June, 2011, by way of charge to the Statement of Profit and Loss for that year, arising out of a commitment made by the Company pursuant to a standby charter agreement entered with SCI Forbes Limited (SFL), a joint venture entity, to charter vessels from SFL, at charter-hire charges specified in the aforesaid agreement, in the event the vessels are not on charter with a lender approved third party. This matter was referred to in our audit report on the financial statements for the previous year as a subject matter of qualification. During the current year, with effect from 1st July, 2011, the aforesaid standby charter agreement has been suspended. Had the provision, as aforesaid, been made in the previous year, the profit for the current year ended 31st March, 2012 would have been higher by Rs. 513.33 lakhs; however, this has no impact on the Reserves and Surplus as at 31st March, 2012.

5. Without qualifying our opinion, we draw attention to Note 51 to the financial statements regarding no provision for diminution having been made on the Company's investments in equity shares and preference shares aggregating Rs. 7,090 Lakhs in its Joint Venture Company, viz. SCI Forbes Limited, held as non-current, for the reasons stated in the said Note.

6. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

7. The financial statements are subject to adjustments that may arise on completion of detailed review and reconciliation, by the Management, of account balances of trade payables and other current liabilities aggregating Rs. 2,386.15 lakhs and, trade receivables, long-term / short- term loans & advances and other current assets aggregating Rs. 1,321.48 lakhs, relating to the Company's Shipping and Logistics segment, the effect of which could not be determined on the profit for the year and the reserves and surplus as at the year end. Our audit report for the year ended 31st March, 2011 contained a similar qualification. [See Note 52 to the financial statements].

8. Further to our comments in the Annexure referred to in paragraph 6 above and read with paragraphs 3 to 5 above, we report that:

(i) subject to the matter stated in paragraph 7 above, 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;

(ii) subject to the matter stated in paragraph 7 above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

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

(iv) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(v) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and subject to the matter stated in paragraph 7 above, 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 of the Company for the year ended on that date; and

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

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

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 6 of our report of even date)

(i) Having regard to the nature of the Company's business/activities/result, clauses (xii), (xiii), (xiv), (xv), (xviii), (xix) and (xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by a firm of Chartered Accountants appointed by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. As explained to us, the discrepancies noticed on verification between the physical assets and book records were material and appropriately dealt with in the books of account.

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

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

(c) In our opinion, the Company has generally maintained proper records of its inventories and the discrepancies noticed on physical verification, as identified by the Management and according to the information and explanations given to us, are not considered to be material taking into account the nature of the Company's business.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, the internal control system is generally commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

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

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

(b) Such transactions in excess of Rs. 5 Lakhs are only in respect of professional fees, where, having regard to the explanations that such service is of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, we are unable to comment whether the transaction was made at the prevailing market price at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

(viii) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(ix) 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.

(x) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues applicable to it with the appropriate authorities except in case of Tax Deducted at Source and Service tax relating to the Company's shipping and logistics segment, wherein the Company is generally not regular in depositing dues with the appropriate authorities and there have been substantial delays.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty and other material statutory dues in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable except for the following:

Name of the Statute Nature Amount (Rs. in Lakhs) Due Date

The Bombay Labour Welfare Fund Act 1953 Unpaid Wages and Bonus 1.57 Prior to 1st April 2009

(c) Details of dues of Income Tax, Sales Tax, Wealth Tax and Excise Duty which have not been deposited as at 31st March, 2012 on account of disputes, are given below:

Statute Nature of dues Forum where Period to which Amount dispute is pending the amount relates (Rs.in Lakhs)

Income-Tax Act, 1961 Income-Tax Income-Tax Appellate Assessment Years :- 520.68 Tribunal 1989-90, 1997-98,

2003-04 to 2005-06

Commissioner of Income- Assessment Years :- 701.02 Tax (Appeals) 1990-91 to 1993-94,

1995-96, 1998-99,

2001-02,2002-03, 2005- 06 to 2008-09

Wealth Tax Act, 1957 Wealth Tax Commissioner of Wealth Assessment Years :- 19.74

Tax (Appeals) 1996-97 to 2000-01

Sales Tax Laws Sales Tax Commercial Tax Officer, 2004-05 3.95 (including interest Chennai and penalty) Madras High Court 1989-90, 1998-99, 435.08 1999-00

Sales Tax Appellate 1992-93 3.76 Tribunal, Cuttak

Sales Tax Appellate 1990-91 to 1993-94 45.66 Tribunal, Patna

Deputy Commissioner of 1993-94, 1999-00 41.50 Appeals, Mumbai

Deputy Commissioner of 2002-03, 23.29 Appeals, Kolkata 2005-06 to 2006-07

Deputy Commissioner of 1987-88, 2003-04 1.48 Appeals, New Delhi

Sales Tax Appellate 1994-95, 43.88

Tribunal, Mumbai 1997-98 to 2002-03

Asst. Commissioner of 2000-01 to 2005-06 172.75 (CT) Thiruvanmiyar Assessment Circle

The Central Excise Act, Excise Duty Additional Commissioner 2000 to 2003 54.99 1944 (including interest of Central Excise and penalty)

Custom Excise & Service 2003 to 2007 4,624.87 Tax Appellate Tribunal, New Delhi

The Central Excise Act, Excise Duty Custom Excise & Service 1995-96 9.38 1944 (including interest Tax Appellate Tribunal, and penalty) Chennai

Assistant Commissioner 2000 to 2004 6.95 of Central Excise

Commissioner of Central December 2003 to 28.42

Excise, Chennai December 2004 and

November 2006 to

February 2007

Commissioner of Central 2010-2011 6.25 Excise, Mumbai-II

The aforesaid disputed dues exclude property tax of Rs. 1,195.85 Lakhs not deposited pending resolution of the representation made by the Company to the Assistant Assessor & Collector, Municipal Corporation of Greater Mumbai against the enhanced ratable value assessed by the said authority.

(xi) The accumulated losses i.e. deficit in the statement of profit and loss of the Company as at the end of the financial year, deducted from the Reserves and Surplus, are less than fifty per cent of its net worth.

(xii) The Company has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xiii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company has not issued any debentures.

(xiv) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

(xv) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis amounting to Rs. 4,905.18 Lakhs have, prima facie, been used for long-term investments.

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117366W)

Rajesh K Hiranandani

Partner

(Membership No. 36920)

MUMBAI, 29th May, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of FORBES & COMPANY LIMITED ("the Company") as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the 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.

3. Attention is invited to Note 16 on Schedule 13 to the accounts relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,742.44 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 227(1A)(a) of the Companies Act, 1956. Our report on the financial statements for the year ended 31st March, 2010 contained a similar modification.

4. Without qualifying our opinion, we invite attention to Note 19(2) on Schedule 13 to the accounts relating to managerial remuneration of Rs. 50.33 lakhs paid in excess of the limits specified in Schedule XIII of the Companies Act, 1956 and is subject to the approval of the Central Government. Our report on the financial statements for the year ended 31st March, 2010 contained a similar modification where approval of the Central Government has since been received by the Company.

5. Without qualifying our opinion, we report that transactions for sale of goods and services of a value aggregating Rs. 2.44 lakhs have been entered into, with two private limited companies in which one of the directors of this Company is also a director of those private limited companies, without obtaining previous approval of the Central Government. This is not in compliance with the provisions of Section 297 of the Companies Act, 1956. Our report on the financial statements for the year ended 31st March, 2010 contained a similar modification.

6. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

7. Pursuant to standby charter agreements entered with SCI Forbes Limited (SFL), a joint venture entity, the Company and its joint venture partner, Shipping Corporation of India Limited (SCI), together, Promoters, have committed to charter vessels from SFL, at charter-hire charges specified in the aforesaid agreements, in the event the vessels are not on charter with a lender approved third party, until SFL repays its borrowings which is spread over a period of twelve years. As represented to us by the Management, subsequent to the year end, with effect from 1st July, 2011, the aforesaid standby charter agreements have been suspended. In our opinion, as required under Accounting Standard 29, 'Provisions, Contingent Liabilities and Contingent Assets', notified under the Companies Act, 1956, provision for the loss of Rs. 515.97 lakhs materialised during the period 1st April, 2011 to 30th June, 2011, should have been made by way of a charge to the Profit and Loss Account. Our audit report dated 13th August, 2010 on the accounts for the year ended 31st March, 2010 contained a similar qualification wherein we had opined that provision for the loss of Rs. 735.80 lakhs materialised subsequent to 31st March, 2010 and until the date of approval of the accounts by the Board of Directors on the said date should have been made by way of charge to the profit and loss account. Had the provision, as aforesaid, been made in both the years, the profit, before and after tax, would have been higher by Rs. 219.83 lakhs, (2010: the loss, before and after tax, would have been higher by Rs. 735.80 lakhs) and the reserves and surplus would have been lower by Rs. 515.97 lakhs (2010: Rs. 735.80 lakhs) [See Note 17(a) on Schedule 13 to the accounts].

8. The financial statements are subject to adjustments that may arise on completion of detailed review and reconciliation, by the Management, of account balances of sundry creditors / customers' credit balances / advances aggregating Rs. 1,781.67 lakhs; sundry debtors aggregating Rs. 838.62 lakhs and loans and advances aggregating Rs. 953.88 lakhs relating to the Company's Shipping and Logistics segment, the effect of which could not be determined on the profit for the year and the reserves and surplus as at the year end [See Note 17(b) on Schedule 13 to the accounts].

9. Further to our comments in the Annexure referred to in paragraph 6 above and read with paragraphs 3 to 5 above, we report that:

(i) 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;

(ii) subject to the matters stated in paragraphs 7 and 8 above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(iii) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) subject to the matter stated in paragraph 7 above, in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(v) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and subject to the matters stated in paragraphs 7 and 8 above, 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 of the Company for the year ended on that date; and

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

10. On the basis of the written representations received from the Directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 6 of our report of even date)

(i) Having regard to the nature of the Company's business/activities/result,clausesviii, xii, xiii, xiv, xv, xviii, xix and xx of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. As explained to us, the discrepancies noticed on verification between the physical assets and book records were material and appropriately dealt with in the books of account.

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

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

(c) In our opinion, the Company has generally maintained proper records of its inventories and the discrepancies noticed on physical verification, as identified by the management and according to the information and explanations given to us, are not considered to be material taking into account the nature of the Company's business.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, the internal control system is generally commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

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

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

(b) Such transactions in excess of Rs. 5 lakhs are only in respect of professional fees, where,having regard to the explanations that such service is of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, we are unable to comment whether the transaction was made at the prevailing market price at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

(viii) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business

(ix) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities except in case of Tax Deducted at Source relating to the Company's shipping and logistics segment, wherein the Company is generally not regular in depositing dues with the appropriate authorities and there have been substantial delays; arrears of such dues as at the year end aggregate Rs. 7.52 lakhs[See Note 17(c) on Schedule 13 to the accounts].

(b) There were no undisputed amounts payable in respect of Income-Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other

material statutory dues in arrears as at31st March, 2011 for a period of more than six months from the date they became payable except for the following:

Name of the Statute Nature Amount (Rs.in Lakhs) Due Date

The Bombay Labour WelfareFund Act, 1953 Unpaid Wages & Bonus 5.21 Prior to 1st April, 2006

* Rs. 1.27 lakhs paid subsequently

(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, and Excise Duty which have not been deposited as at 31st March, 2011 on account ofdisputes, are given below:

Statute Nature of Dues Forum disputeis pending

Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal

Commissioner of Income Tax (Appeals)

Wealth Tax Act, 1957 Wealth Tax Commissioner of Wealth Tax (Appeals)

Sales Tax Laws Sales Tax Commercial Tax Officer, (including interest Chennai and penalty)

Madras High Court

Sales Tax Appellate Tribunal, Cuttack

Sales Tax Appellate Tribunal, Patna

Various Appellate Authorities

Asst. Commissioner of (CT) Thiruvanmiyar Assessment Circle

The Central Excise Excise Duty Custom Excise & Act, 1944 Service Tax Appellate Tribunal, Chennai

Additional Commissioner of Central Excise

Custom Excise & Service Tax Appellate Tribunal, New Delhi

Custom Excise & Service Tax Appellate Tribunal, Chennai

Assistant Commissioner of Central Excise

Commission of Central Excise, Chennai

Statue Period to which where Amount the amount relates involved (Rs. In lakhs)

Income Tax Act, 1961 Assessment Years:- 520.68 1989-90,1997-98, 2003-04 to 2005-2006

Assessment Years:- 753.06 1991-92, 1992-93, 1998-99, 2001-02,

2002-03,

2005-06 to 2008-09

Wealth Tax Act,1957 Assessment Years:- 19.74 1996-97 to 2000-01

Sales Tax Laws 2004-05 3.95

1989-90, 1998-99, 474.38 1999-00

1992-93 3.76

1990-91 to 1993-94 45.66

1994 to 2002 110.15

2000-2001 to 222.92 2005-2006

The Central Excise Nov 2002 to June 2003 20.44 Act,1944

2000 to 2003 54.99

2003 to 2007 4,624.87

1995-96 9.38

2000 to 2004 6.95

December 2003 to 28.42

December 2004 and November 2006 to February 2007

The aforesaid disputed dues exclude property tax of Rs. 934.07 lakhs not deposited pending resolution of the representation made by the Company to the Assistant Assessor & Collector, Municipal Corporation of Greater Mumbai against the enhanced ratable value assessed by the said authority.

(x) The Company does not have any accumulated losses as at 31st March 2011, the debit balance in Profit and Loss Account being set-off against uncommitted reserves. The Company has not incurred cash losses in the financial year and in the immediately preceding financial year.

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

(xii) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

(xiii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis amounting to Rs. 4,873.85lakhs have, prima facie, been used for long-term investments.

(xiv) According to the information and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the year except an instance of fraud on the Company during the year in the nature of payments being made against fictitious invoices at one of the locations of the shipping and logistics segment of the Company. The Company has terminated the employment of the concerned employee. The Management has estimated the amount involved atRs. 33.00 lakhs and recovered the same from the perpetrators of the fraud.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No. 117366W)

Rajesh K Hiranandani

Partner MUMBAI, 19th July, 2011 (Membership No. 36920)



 
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