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Auditor Report of Fulford (India) Ltd. Company
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Auditor Report of Fulford (India) Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of Fulford (India) Limited (the "company"), which comprise the Balance Sheet as at 31st March, 2015, 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

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

Auditors' Responsibility

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 and the Rules made thereunder including the accounting standards and matters which are required to be included in the auditors' report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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.

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

7. 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

8. I n 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

9. As required by 'The Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to as the "Order") and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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, except that the back-up of the books of accounts and other books and papers maintained in electronic mode has not been maintained on servers physically located in India.

(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 31st March, 2015 and 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 Auditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

(i) The company has disclosed the impact, if any, of pending litigations as at 31st March, 2015 on its financial position in its standalone financial statements - Refer Note 19(a);

(ii) The company has long-term contracts as at 31st March, 2015 for which there were no material foreseeable losses. The company did not have derivative contracts as at 31st March, 2015; and

(iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the company during the year ended 31st March, 2015.

Referred to in paragraph 9 of the Independent Auditors' Report of even date to the members of Fulford (India) Limited on the standalone financial statements as of and for the year ended 31st March, 2015

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

2. (a) The inventory has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. In our opinion, the discrepancies noticed on physical verification of inventory as compared to book records were not material.

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. Accordingly, the provisions of Clause 3(iii)(a) and 3(iii)(b) of the Order are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that except for certain items of inventory purchased which are of special/proprietary nature for which suitable alternative sources do not exist, there is an adequate internal control system 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. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. The company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

6. We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been specified under sub-section (1) of Section 148 of the Act and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

7. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues in respect of value added tax and service tax, though there has been a slight delay in a few cases and is regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales tax, wealth tax, duty of customs, duty of excise and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of wealth-tax, service-tax, duty of customs and duty of excise which have not been deposited on account of any dispute. The particulars of dues of income-tax, sales tax and value added tax as at 31st March, 2015 which have not been deposited on account of a dispute, are as follows:

Name of the Nature of dues Amount statute Rupees

The Income- Income-tax 248,623,109 tax Act, 1961 including interest, as applicable

The Central Sales tax and 185,117,794 Sales Tax value added Act, 1956 tax including and Local interest and Sales Tax penalty, as Acts applicable 177,152

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

The Income Tax Act 1961 Assessment Years Tribunal 1997-1998, 1999-2000, 2002-2003, 2004-2005 to 2007-2008 and 2009-2010 to 2010-2011

The Central Sale Tax Several demands Appellate Acy 1956 pertaining to the period Authority 1992-1993 to 1995-1996, - up to 2000-2001, 2002, 2003-2004, Commissioner's 2007-2008, 2009-2010 and level 2010-2011

Several demands pertaining Tribunal to the period 2001-2002 and 2004-2005

* Net of amounts paid including under protest.

# Excluding a demand of Rs. 223,087,639 (net of payment) for Assessment Year 2011-2012, received subsequent to the year end, which is pending before the Dispute Resolution Panel.

(c) The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act, 1956 and the rules made thereunder.

8. The company has no accumulated losses as at the end of the financial year and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

9. As the company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the Balance Sheet date, the provisions of Clause 3(ix) of the Order are not applicable to the company.

10. In our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the company.

11. The company has not raised any term loans. Accordingly, the provisions of Clause 3(xi) of the Order are not applicable to the company.

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

For Lovelock & Lewes Firm Registration No. 301056E Chartered Accountants

Himanshu Goradia Partner Mumbai, 25th May, 2015 Membership No. 45668


Dec 31, 2012

1. We have audited the attached Balance Sheet of Fulford (India) Limited (the ''company''), as at 31st December, 2012, and the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 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 (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 (together the ''Order'') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956'' of India (the ''Act'') and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 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, 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 dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on 31st December, 2012 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st December, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the company as at 31 st December, 2012;

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

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

[Referred to in paragraph 3 of the Auditors'' Report of even date to the members of Fulford (India) Limited on the financial statements as of and for the year ended 31st December, 2012]

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies have been noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. In our opinion, the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of Clauses 4(iii)(b) to 4(iii)(d) of the Order are not applicable to the company.

(b) The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of Clauses 4(iii)(f) and 4(iii)(g) of the Order are not applicable to the company.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that except for certain items of inventory purchased which are of special/proprietary nature for which suitable alternative sources do not exist, there is an adequate internal control system 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. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanations given to us, in respect of the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year, we are unable to comment whether these transactions have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time as there are no comparable market prices available since these transactions are of specialised/proprietary nature.

6. The company has not accepted any deposits from the public within the meaning of Section 58A of the Act and the rules framed there under.

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

8. We have broadly reviewed the books of account maintained by the company in respect of the products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues in respect of provident fund, investor education and protection fund, income- tax, sales tax and service tax though there has been a delay in a few cases and is regular in depositing undisputed statutory dues including employees'' state insurance, wealth tax, customs duty, excise duty and other material statutory dues, as applicable, with the appropriate authorities. The extent of the arrears of provident fund outstanding as at 31st December, 2012, for a period of more than six months from the date they became payable are as follows -

Name of the Nature of dues Amount statute Rs.

The Employees'' Provident Fund 6,324 Provident Funds and Miscellaneous Provisions Act, 1952

Name of the Statute Period to which Due date Date of the amount payment relates

The Employees July 2012 16th August, 16th February, Provident 2012 2013 Funds and Miscellaneous Provisions Act, 1952

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of wealth-tax, service tax, customs duty and excise duty which have not been deposited on account of any dispute. The particulars of dues of income- tax and sales tax as at 31st December, 2012 which have not been deposited on account of a dispute, are as follows -

Name of the Nature of Amount* statute dues Rs.

The Income-tax Income-tax 29,654,169 Act, 1961 including interest, as applicable

130,696,878

The Central Sales tax 18,677,968 Sales Tax Act, including 1956 and Local interest, as Sales Tax Acts applicable

771,484

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

The Income-tax Act, 1961 Assessment Years Appellate Authority - 2002-2003 and up to Commissioner''s 2006-2007 level

Assessment Years Tribunal 1997-1998, 1999-2000, 2004-2005, 2005-2006, 2007-2008 and 2008-2009

The Central Sales Tax Act,1956 and Local Sales Tax Acts Several demands Appellate Authority - pertaining to the up to Commissioner''s period 1992-1993 to level 1995-1996, 2000-2001, 2003-2004, 2005-2006, 2007-2008, 2008-2009 and 2009-2010

Several demands Tribunal pertaining to the period 2001-2002 and 2004-2005

* Net of amounts paid including under protest.

10. The company has no accumulated losses as at the end of the financial year and it has incurred cash losses in the financial year ended on that date but has not incurred any cash losses in the immediately preceding financial year.

11. As the company does not have any borrowings from any financial institution or bank nor has it issued any debentures as at the Balance Sheet date, the provisions of Clause 4(xi) of the Order are not applicable to the company.

12. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of Clause 4(xii) of the Order are not applicable to the company.

13. As the provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company, the provisions of Clause 4(xiii) of the Order are not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4(xiv) of the Order are not applicable to the company.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, the provisions of Clause 4(xv) of the Order are not applicable to the company.

16. The company has not raised any term loans. Accordingly, the provisions of Clause 4(xvi) of the Order are not applicable to the company.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year. Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the company.

19. The company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning of the year and at the year end. Accordingly, the provisions of Clause 4 (xix) of the Order are not applicable to the company.

20. The company has not raised any money by public issues during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the company.

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

For Lovelock & Lewes

Firm Registration No. 301056E

Chartered Accountants

Himanshu Goradia

Partner

Mumbai, 25th February, 2013 Membership No. 45668


Dec 31, 2010

1. We have audited the attached Balance Sheet of Fulford (India) Limited (the company), as at 31st December, 2010, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 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 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 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 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, 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on 31st December, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st December, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the company as at 31 st December, 2010;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE TO AUDITORS REPORT [Referred to in paragraph 3 of the Auditors Report of even date to the members of Fulford (India) Limited on the financial statements for the year ended 31st December, 2010]

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

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

(c) On the basis of our examination of the inventory records, in our opinion, the company is maintaining proper records of inventory. In our opinion, the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(b) to (iii)(d) of paragraph 4 of the Order are not applicable to the company for the current year.

(b) The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, clauses (iii)(f) and (iii)(g) of paragraph 4 of the Order are not applicable to the company for the current year.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system 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. Further, on the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) In our opinion and according to the information and explanations given to us, 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 to us, in respect of the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rupees Five Lakhs in respect of any party during the year, prevailing market prices at the relevant time are not available as these transactions are of a special nature.

6. The company has not accepted any deposits from the public within the meaning of Section 58A of the Act and the rules framed there under.

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

8. We have broadly reviewed the books of account maintained by the company in respect of the products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities in India.

(b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of wealth-tax, service tax, customs duty, excise duty and cess which have not been deposited on account of any dispute. The particulars of dues of income-tax and sales tax as at 31st December, 2010 which have not been deposited on account of a dispute, are as follows -

Name of the Nature of dues Amount* statute

The Income-tax Income-tax 12,641,850 Act, 1961 including interest, as applicable

27,086,795



67,642,422

The Central Sales tax 1,193,173 Sales Tax Act, including interest, 1956 and Local as applicable Sales Tax Acts 1,850,664



Namem of the statue Period to which the Forum where the amount relates dispute is pending

The Income-tax Act, 1961 Assessment Years Appellate Authority - 2002-2003, 2004- up to Commissioners 2005 and 2005- level 2006

Assessment Years Tribunal 1997-1998, 1999- 2000 and 2006- 2007

Assessment Year Dispute Resolution 2007-2008 Panel

The Central Sales Tax Act, 1956 and Local Sales Tax Acts Several demands Appellate Authority - pertaining to the up to Commissioners period 1992-1993 to level 1995-1996, 2000- 2001, 2003-2004, 2005-2006 and 2007-2008

Several demands Tribunal pertaining to the period 2001-2002, 2003-2004 and 2004-2005

* Net of amounts paid including under protest

10. The company has no accumulated losses as at 31st December, 2010 and 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 the 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. The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

16. The company has not obtained any term loans.

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, there are no funds raised on short-term basis which have been used for long-term investment.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. The company has not issued any debentures.

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

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

For Price Waterhouse

Firm Registration No. 301112E

Chartered Accountants

Vilas Rane

Partner

Mumbai, 21st February, 2011 Membership No. F-33220




Dec 31, 2009

1. We have audited the attached Balance Sheet of Fulford (India) Limited, (the Company"), as at December 31, 2009, the Profit and Loss Account and also the Cash Flow Statement 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 misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Statement on 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, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

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

(ii) in our opinion, proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

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

(iv) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) on the basis of written representations received from directors as on December 31, 2009 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on December 31, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) in our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies and Notes thereon, 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 December 31, 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 the Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF THE AUDITORS REPORT ON THE ACCOUNTS OF FULFORD (INDIA) LIMITED

1. In respect of its fixed assets:

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

(b) Physical verification of fixed assets is being conducted in a phased programme by the management designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and the nature of assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the books of account.

(c) Although some of the fixed assets have been disposed off during the year, in our opinion and accoiuing to the information and explanations given to us, the ability of the company to continue as a going concern is not affected.

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 are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and the discrepancies noticed on such physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.

3. According to the information and explanations given to us, the company has not granted or taken any loan secured or unsecured to /or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly sub clauses (a), (b), (c), (d), (e), (f) and (g) of clause (iii) are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and 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. To the best of our knowledge and belief and according to the information and explanations given to us, there were no transactions 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 within the meaning of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public.

7. In our opinion, the internal audit functions carried out during the year by an external entity appointed by the management have been commensurate with the size of the Company and nature of its business.

8. We have broadly reviewed the books of account and records maintained by the Company relating to the manufacture of formulations, pursuant to the Order made by the Central Government for the maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed records have been maintained and the prescribed accounts are in the process of being made up. We have however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

9. In respect of statutory dues:

(a) According to the information and explanations given to us the Company has been generally regular in depositing undisputed statutory 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 any other material statutory dues with the appropriate authorities during the year, except for outstanding EDLI dues amounting to Rs. 23,37,567/-, pertaining to the year 1993 to 2008, based on show cause notice received from the Provident Fund authorities. Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, details of disputed income tax, excise duty, sales tax and customs duty, which have not been deposited as on December 31, 2009 on account of any dispute are given below:

Nature of Nature of Dues Amount Period to Statute In Rupees which the Amount relates

Central Sales Demand raised by Sales 690,563 1992-93 to Tax Act, 1956 Tax, Daman due to 1995-96 differences in tax rates.

Central Sales Non-Submission of form F 154,690 2000-01 Tax Act, 1956 for inter branch transfer.

West Bengal Sales tax demand in 745,463 2001-02 & Sales tax Act, regular assessment. 2004-05 1944

Delhi Sales Demand raised by Sales 172,615 2003-04 Tax Act,1975 tax in respect of sample conversion for free distribution to doctors.

Rajasthan Sales Sales tax demand in 153,615 2004-05 Tax Act, 1994 respect of free goods.

Central Excise Modvat Credit not allowed 6,282,782 2001-02 Act, 1944

Income Tax Disallowance on account 2,904,410 A.Y. 1992-93 to Act, 1.961 of undervaluation of closing 2001-02 inventory on account of freight insurance etc. Unproved liabilities (Sales performance commission, legal fees, miscellaneous exp., interest, professional fees, forward exchange contract), foreign traveling expenses, registration fees & contribution to scientific symposium/ institutions.

Income Tax Disallowance on account of 9,839,028 A.Y.2002-03 Act, 1961 undervaluation / write off of inventory and addition u/s 68 in case of security deposits.

Income Tax Disallowance u/s 92CA 19,180,717 A.Y.2003-04 Act, 1961 relating to transfer pricing, and A.Y. 2004-05 un utilized modvat credit & interest on deposits.

Name of the Statue Forum where dispute is pending

Central Sales Tax Act, 1956 Assistant Commissioner Appeals

Central Sales Tax Act, 1956 Assistant Commissioner Appeals

West Bengal Sales tax Act, 1944 Commercial taxes & Revision Board.

Delhi Sales Tax Act ,1975 Deputy Commissioner (Appeal IV)

Rajasthan Sales Tax Act, 1994 Sales tax officer

Central Excise Act, 1944 Assistant Commissioner Appeals

Income Tax Act, 1.961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Commissioner (Appeals) Income tax

Income Tax Act, 1961 Commissioner (Appeals) Income tax



Nature of Nature of Dues Amount Period to Statute In Rupees which the Amount relate

Income Tax Disallowance u/s 92CA 9,568,668 A.Y. 2005-06 Act, 1961 relating to purchase of raw materials.

Drug Price Demand raised by 19,462,000 1979-84 Control Order Government of India for payment into Drug price Equalization Account.

Income Tax Disallowance u/s 92CA 23,298,885 A.Y. 2006-07 Act, 1961 relating to purchase of raw materials.



Name of the Forum where dispute Statue is pending

Income Tax Act, 1961 Commissioner (Appeals) Income tax

Drug Price Control Order Supreme Court

Income Tax Act, 1961 Assistant Commissioner of Income Tax (OSD) -2 (1)

There were no disputed dues which remained unpaid in respect of custom duty, wealth tax, service tax and cess during the year.

10. The Company does not have any accumulated losses as at the end of the financial year. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not obtained any borrowings from any banks or financial institutions or by way of debentures.

12. In our opinion, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a Nidhi/mutual benefit fund / society. Therefore the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

14. In our opinion the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

16. The Company has not obtained any term loans during the year.

17. According to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, funds raised on short term basis have prima-facie, not been used during the year for long term investment.

18. According to the information and explanation given to us, the Company has not made any preferential allotment of shares to parties or companies covered in the Register maintained under section 301 of the Companies Act, 1956 during the year.

19. The Company has not issued any debentures during the year.

20. The Company has not raised any money by public issues during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For Deloitte Haskins & Sells

Chartered Accountants (Reg. No. 117366W)

K. A. Katki

Partner Mumbai, February 23, 2010 (Membership No. 038568)

 
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