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Auditor Report of Gabriel India Ltd.

Mar 31, 2015

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

Management''s Responsibility for the 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. Our responsibility is to express an opinion on these 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 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. 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 of the state of affairs of the Company as at March 31, 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 (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 purpose of our audit;

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

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

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

e. on the basis of 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 Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), 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 28 to the financial statements

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Referred to in paragraph 9 of the Independent Auditor''s Report of even date to the members of Gabriel India Limited on the financial statements as of and for the year ended March 31, 2015.

i. (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.

ii. (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. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

iii. The Company had during the year granted unsecured loan of H14, 00, 00,000/-, to a Company covered in the register maintained under Section 189 of the Act. The loan was repaid during the year.

The Company has not granted other secured or unsecured loans to any other party.

iv. 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 been informed of, any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73, 74, 75 and 76 or any other relevant provisions of the Act and the Rules framed thereunder to the extent notified, with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

vi. 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.

vii. (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 regular in depositing the undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts in respect of provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year-end for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, wealth tax, service tax, duty of customs and duty of excise duty, value added tax or cess as at March 31, 2015, which have not been deposited on account of a dispute, areas follows:

Name of the Amount Period to which Statute (rs Million) the amount relates

Income Tax Act, 1961 41.44 Assessment Year 1997 to 2005

Income Tax Act, 1961 28.44 Assessment Year 2009-10

Income Tax Act, 1961 8.78 Assessment Year 2010-11

Income Tax Act, 1961 8.00 Assessment Year 2011-12

Income Tax Act, 1961 3.18 Assessment Year 2012-13

U.P. Trade Tax Act, 1948 2.58 Financial Year 2002-03, 2005-06 and 2008-09

U.P. Trade Tax Act, 1948 5.49 Financial Year 2004-05, 2006-07 and 2007-08

Kerala VAT Act 2003 0.52 Financial Year 2005-06 and 2006-07

Delhi VAT Act, 2004 0.45 Financial Year 2008-09

Central Sales Tax Act, 1956 53.96 Financial Year 2007-2008, 2008-09 and 2009-10

MVAT Act 2002 13.95 Financial Year 2007-08

Central Excise Act, 1944 1.22 Financial Year 2008 -09 to 2011-12

Central Excise Act, 1944 43.35 Financial Year 2002-03 to 2006-07

Central Excise Act, 1944 1.98 Financial Year 2003-04 to 2010-11

Central Excise Act, 1944 12.32 Financial Year 2004-05 to 2010-11

Central Excise Act, 1944 0.95 Financial Year 2010 -11

Central Excise Act, 1944 3.04 Financial Year 2010 -11- to 2014-15

Central Sales Tax Act, 1956 0.56 Financial Year 2006-07 and 2008-09

Central Sales Tax Act, 1956 20.80 Financial Year 2005-2006, 2011-12 and 2012-13

Central Excise Act, 1944 1.43 Financial Year 2006 -07 to 2010-11

Central Excise Act, 1944 0.15 Financial Year 2008- 09 and 2009-10

HP Entry Tax Act, 2010 16.31 Financial Year 2011-12 to 2014-15

Central Excise Act, 1944 8.55 Financial Year 2005-06 to June 2010

Income Tax Act, 1961 27.51 Assessment Year 2009-10 to 2014-15

Name of the Statute Forum

Income Tax Act, 1961 High Court, Mumbai

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Commissioner of Income Tax (A)

Income Tax Act, 1961 Commissioner of Income Tax (A)

Income Tax Act, 1961 Commissioner of Income Tax (A)

U.P. Trade Tax Act, 1948 Additional Commissioner (A) Commercial tax Lucknow

U.P. Trade Tax Act, 1948 Commercial tax Tribunal bench Lucknow

Kerala Vat Act 2003 Assistant Commissioner, Special Circle Ernakulum

Delhi VAT Act 2004 Additional Commissioner, Department of trade and taxes, New Delhi

Central Sales Tax Act 1956 Deputy Commissioner of sales tax appeal Pune MVAT Act 2002 Deputy Commissioner of sales tax, Pune

Central Excise Act 1944 Additional Commissioner, Central Excise & Custom, Pune

Central Excise Act, 1944 Commissioner, Central Excise & Custom, Pune

Central Excise Act, 1944 Commissioner (A), Bhopal

Central Excise Act, 1944 CESTAT, New Delhi

Central Excise Act, 1944 Commissioner (A), Indore

Central Excise Act, 1944 Additional Commissioner, Indore

Central Sales Tax Act, 1956 Commercial Tax Board, Bhopal

Central Sales Tax Act, 1956 Additional Commissioner (Sales Tax), Indore

Central Excise Act, 1944 Deputy Commissioner, Central Excise, Nashik

Central Excise Act, 1944 CESTAT, Mumbai

HP Entry Tax Act, 2010 High court, HP

Central Excise Act 1944 Commissioner of Central Excise- Delhi

Income Tax Act 1961 ITO (TDS)

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.

viii. 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.

ix. According to the records of the Company and information and explanations given to us and the information, the Company has not defaulted in repayment of dues to any bank as at the balance sheet date. There were loans from financial institutions and no issue or outstanding debentures at the end of the balance sheet date.

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

xi. 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 B. K. Khare & Co. Chartered Accountants Firm''s Registration Number 105102W

Naresh Kumar Kataria Place, Mumbai Partner Dated: May 20, 2015 Membership Number: 037825


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

1. 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") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

2. 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.

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

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

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

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

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

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements

6. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (here in after 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 4 and 5 of the Order.

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

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

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

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

d. In our opinion, the Balance Sheet, the Statements of Profit and Loss and Cash Flow Statement dealt with by this report, comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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

ANNEXURE REFERRED TO IN PARAGRAPH 5 OF OUR REPORT OF EVEN DATE:

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

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed during the verification were not material and have been properly dealt with in the books of accounts.

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

ii) (a) Inventory has been physically verified during the year by the management at regular intervals. In our opinion, the frequency of verification is reasonable. In respect of stocks of raw materials lying with converters, the management has obtained confirmation certificates with regard to the respective closing stock.

(b) In our opinion, the procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. Having regard to the size of the operations of the Company and the nature of stocks held, the discrepancies noticed on verification between physical stocks and book records been properly dealt with in the books of accounts.

iii) (a) The Company has not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company has granted unsecured loans of Rs.32,00,00,000/- to a Company covered in the register maintained under section 301 of the Companies Act, 1956. The outstanding amount at the year end is Rs.NIL.

(i) The rate of interest and other terms of the loans granted to a Company covered in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interests of the Company.

(ii) The payment of interest and principal is generally regular. There is no overdue amount of the loans granted.

iv) In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed asset and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control procedures.

v) (a) Based on audit procedures applied by us, we are of the opinion that the 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, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) In our opinion, Company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules 1975, with regard to the deposits accepted from the public. We are further informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal intimating the contravention of the said provisions.

vii) In our opinion, the Company has an internal audit system commensurate with the size and the nature of its business.

viii) We have broadly reviewed the books of accounts 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 prescribed under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We however have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

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

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom duty, Excise duty and Cess on account of dispute are as follows :

Name of the Statue Amount Rs. Period to which it pertains in Million

Income Tax Act, 1961 41.44 Assessment Year 1997 to 2003

Income Tax Act, 1961 28.44 Assessment Year 2009-10

Income Tax Act, 1961 8.78 Assessment Year 2010-11

Income Tax Act, 1961 10.50 Assessment Year 2011 -12

UP Trade tax Act, 1948 1.25 2002-03 to 2006-07

UP Trade tax Act, 1948 9.10 2007 - 08

Kerala VAT Act 2003 0.52 2005-06 and 2006-07

Delhi VAT Act, 2004 0.45 2008-09

Central Excise Act, 1944 1.43 2007 to 2011

Central Excise Act, 1944 0.15 2008- 09 and 2009-10

Central Sales tax Act, 1956 81.31 2005-06

Central Sales tax Act, 1956 10.45 2008-09

Central Sales tax Act, 1956 3.86 2009-10

Central Excise Act, 1944 1.22 2008 to 2012

Central Excise Act, 1944 19.84 2003 to 2007

Central Excise Act, 1944 1.06 2004 to 2011

Central Excise Act, 1944 12.32 2005 to 2011

Central Excise Act, 1944 0.95 2011

Central Excise Act, 1944 1.74 2011 to 2013

Central Sales tax Act, 1956 0.56 2008-09

HP Entry tax Act, 2010 4.86 2011-12 to 2013-14

Income Tax Act, 1961 7.13 2009-10 to 2012-13

Central Excise Act, 1944 6.26 2005-06 to June 2010

Name of the Statue Forum

Income Tax Act, 1961 High Court, Mumbai

Income Tax Act, 1961 Commissioner of Income Tax (A)

Income Tax Act, 1961 Commissioner of Income Tax (A)

Income Tax Act, 1961 Commissioner of Income Tax (A)

UP Trade tax Act, 1948 Additional commissioner (A)-1, Commercial tax Lucknow

UP Trade tax Act, 1948 Commercial tax tribunal bench 1, UP. Lucknow

Kerala VAT Act 2003 Assistant Commissioner, Special Circle 1, Emakulam

Delhi VAT Act, 2004 Additional commissioner, Department of trade and taxes, New Delhi

Central Excise Act, 1944 Deputy Commissioner, Central Excise, Nashik Division II

Central Excise Act, 1944 CESTAT, Mumbai

Central Sales tax Act, 1956 Deputy commissioner of sales tax, Pune

Central Sales tax Act, 1956 Deputy Commissioner of sales tax appeal-2, pune

Central Sales tax Act, 1956 Deputy commissioner of sales tax, Pune

Central Excise Act, 1944 Additional Commissioner, Central Excise & Custom, Pune-III

Central Excise Act, 1944 Commissioner, Central Excise & Custom, Pune-III

Central Excise Act, 1944 Additional commissioner Central excise, Indore

Central Excise Act, 1944 CESTAT, New Delhi

Central Excise Act, 1944 Commisssioner (A), Indore

Central Excise Act, 1944 Appeal filed with ADDL COMM, Indore

Central Sales tax Act, 1956 Appeal filed with MP. Comm. Tax Board, Bhopal

HP Entry tax Act, 2010 High court, HP

Income Tax Act, 1961 ITO(TDS), Delhi

Central Excise Act, 1944 Commissioner of Central Excise-Delhi

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

xi) Based on our audit procedures, we are of the opinion that the Company has not defaulted in the repayment of dues to Financial Institutions and Banks.

xii) According to the information and explanations given to us, in our opinion the Company has maintained adequate documentation with respect to loan granted on the basis of security by way of pledge of shares, debentures and other securities.

xiii) 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 (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

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

xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

xvi) Based on the information and explanations given to us, term loans were, prima facie, applied for the purpose for which the loans were obtained.

xvii) On an overall examination of the Balance Sheet and the Cash Flow of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii)The Company has not made any preferential allotment of shares during the year.

xix) The Company has not issued any debentures during the year.

xx) During the year, the Company has not raised any money by public issue.

xxi) 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 B. K. Khare & Co.

Chartered Accountants FRN : 105102W

Naresh Kumar Kataria

Place : Mumbai Partner

Date : May 14, 2014 M. No. 37825


Mar 31, 2013

1. Report on the Financial Statements

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

2. 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 sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor''s Responsibility

3.1 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.

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

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

4. Opinion

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

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

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

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

5. Report on Other Legal and Regulatory Requirements

5.1 As required by ''the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 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 4 and 5 of the Order.

5.2 As required by section 227(3) of the Act, we report that:

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE REFERRED TO IN PARAGRAPH 5 OF OUR REPORT OF EVEN DATE :

i) FIXED ASSETS :

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

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed during the verification were not material and have been properly dealt with in the books of accounts.

(c) We are of the opinion that, Company has not disposed off substantial part of fixed assets during the year.

ii) INVENTORY : -

(a) Inventory has been physically verified during the year by the management at regular intervals. In our opinion, the frequency of verification is reasonable. In respect of stocks of raw materials lying with converters, the management has obtained confirmation certificates with regard to the respective closing stock.

(b) In our opinion, the procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory. Having regard to the size of the operations of the Company and the nature of stocks held, the discrepancies noticed on verification between physical stocks and book records been properly dealt with in the books of accounts.

iii) LOANS AND ADVANCES GRANTED / TAKEN FROM CERTAIN ENTITIES :

(a) The Company has not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company has granted unsecured loans of Rs. 7,00,00,000/- to a Company covered in the register maintained under section 301 of the Companies Act, 1956. The outstanding amount at the year end is Rs. 2,00,00,000/-.

(c) The rate of interest and other terms of the loans granted to a Company covered in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interests of the Company.

(d) The payment of interest and principal is generally regular. There is no overdue amount of the loans granted.

iv) INTERNAL CONTROL SYSTEM :

In our opinion and according to the information and explanation given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed asset and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control procedures.

v) CONTRACTS OR ARRANGEMENT REFERRED TO IN THIS SECTION 301 OF THE COMPANIES ACT,1956 :

(a) Based on audit procedures applied by us, we are of the opinion that the 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, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) PUBLIC DEPOSITS :

In our opinion, Company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules 1975, with regard to the deposits accepted from the public. We are further informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal intimating the contravention of the said provisions.

vii) INTERNAL AUDIT SYSTEM :

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

viii) COST RECORDS :

We have broadly reviewed the books of accounts 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 prescribed under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We however have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

ix) STATUTORY DUES :

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

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom duty, Excise duty and Cess on account of dispute are as follows :

Name of the Statue Nature of Dues Amount Rs. in Period to which it Forum Million pertains

Income Tax Act, 1961 Income Tax 41.44 Assessment Year High Court, 1997 to 2003 Mumbai

Income Tax Act, 1961 Income Tax 4.94 Assessment Appeal filed with Commissioner of Year 2009-10 Income Tax (A)

Income Tax Act, 1961 Income Tax 23.66 Assessment Commissioner of Income Tax (A) Year 2010-11

U.P Trade Tax Act, 1948 Central sales tax 2.99 2002-03 and Additional commissioner (A)- 1, 2005-06 Commercial tax Lucknow

U.P Trade Tax Act, 1948 Central sales tax 7.54 2004-05 and Commercial tax tribunal bench 1, 2006-07 U.P. Lucknow

U.P Trade Tax Act, 1948 Value added tax 18.74 2006 - 07 Commercial tax tribunal bench 1, U.P. Lucknow

x) ACCUMULATED LOSSES

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

xi) DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS :

Based on our audit procedures, we are of the opinion that the Company has not defaulted in the repayment of dues to Financial Institutions and Banks.

xii) SECURITY FOR LOANS & ADVANCES GRANTED :

According to the information and explanations given to us, in our opinion the company has maintained adequate documentation with respect to loan granted on the basis of security by way of pledge of shares, debentures and other securities.

xiii) SPECIAL STATUTE :

In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Hence, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

xiv) DEALINGS/TRADING IN SHARES, SECURITIES , DEBENTURES AND OTHER INVESTMENTS :

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 Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

xv) GUARANTEES GIVEN :

The Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

xvi) TERM LOANS :

Based on the information and explanations given to us, term loans were, prima facie, applied for the purpose for which the loans were obtained.

xvii) UTILISATION OF FUNDS :

According to the information and explanation given to us and on an overall examination of the Balance Sheet and the Cash Flow of the Company, we report that no funds raised on short-term basis have, prima facie,been used during the year for long term investments.

xviii)PREFERENTIAL ALLOTMENT OF SHARES :

The Company has not made any preferential allotment of shares during the year.

xix) SECURITY FOR DEBENTURES ISSUED :

The Company has not issued any debentures during the year.

xx) PUBLIC ISSUE OF EQUITY SHARES :

During the year, the Company has not raised any money by public issue.

xxi) FRAUDS NOTICED :

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 B K KHARE & CO

Chartered Accountants

(FRN : 105102W)

Padmini Khare Kaicker

Place: Mumbai Partner

Date: May 27th, 2013 Membership No. 44784


Mar 31, 2012

1. We have audited the attached Balance Sheet of GABRIEL INDIA LIMITED as at 31st March, 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 with 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, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, 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 enclose in the Annexure a statement on the matters specified in paragraph 4 & 5 of the said 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 these 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 said Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with, the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(e) On the basis of written representations received from the directors 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 clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(f) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; and

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

(iii) 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 OUR REPORT OF EVEN DATE: i) FIXED ASSETS:

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

(b) All the assets have not been physically verified by the management during the year but there is a regular programme of verification, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. Discrepancies noticed during the verification were not material and have been properly dealt with in the books of accounts.

(c) Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern status of the company.

ii) INVENTORY: -

(a) Inventory has been physically verified during the year by the management at reasonable intervals. In respect of stocks of raw materials lying with Job workers, the management has obtained confirmation certificates with regard to the respective closing stock.

(b) In our opinion, the procedure of physical verification of stocks followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) No material differences were observed on physical verification of inventories at the plants except in Chakan where the differences observed have been adjusted in the books.

iii) LOANS AND ADVANCES GRANTED / TAKEN FROM CERTAIN ENTITIES:

According to the information and explanations given to us, the Company has not taken or granted secured or unsecured loans from/to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

iv) INTERNAL CONTROL SYSTEM:

In our opinion, the internal control system is commensurate with the size of the Company and the nature of its business with regard to purchase of fixed asset and for the sale of goods and services and in the process of being strengthened with respect to purchase of inventory to address the control weaknesses.

v) CONTRACTS OR ARRANGEMENT REFERRED TO IN THIS SECTION 301 OF THE COMPANIES ACT,1956 :

(a) Based on audit procedures applied by us, we are of the opinion that the 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, the transactions made in pursuance of such contracts or arrangements entered in the register maintained under Section 301 and exceeding the value of Rs. 5,00,000/- in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi) PUBLIC DEPOSITS:

In our opinion, Company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposit) Rules, 1975, with regard to the deposits accepted from the public. We are further informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal intimating the contravention of the said provisions.

vii) INTERNAL AUDIT SYSTEM:

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

viii) COST RECORDS:

We have broadly reviewed the books of accounts 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 prescribed under section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have

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

ix) STATUTORY DUES:

(a) Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues applicable to it.

(b) There are no dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Custom duty, Excise duty and Cess which have not been deposited on account of dispute except following:

Name of the Statue Nature of Dues Amount Period to Forum Rs.in which it Million pertains

Income Tax Act, 1961 Disallowance of Interest 41.44 Assessment Dept. filed appeal with High Court, apportioned to interest free loan Year 1997 Mumbai given to Subsidary company to 2003

Income Tax Act, 1961 Disallowance made in Income 44.63 Assessment Appeal filed with Commissioner of

Tax Assessment Year 2009-10 Income Tax (A)

Central Excise Act, 1944 Service Tax 0.46 2005-06 Appeal filed with Commissioner of

Income Tax (A)

Central Excise Act, 1944 Service Tax 2.60 1999 to 2003 CESTAT, Mumbai

Bombay Sales Tax Act,1959 Tax Liability on purchase return 0.25 1996-97 Maharashtra Sales Tax Appellate

Tribunal,Mumbai

Central Excise Act, 1944 Service Tax 0.15 2008-09 CESTAT, Mumbai and 2009-10

Central Excise Act, 1944 Service Tax 1.42 2007 TO 2011 Central Excise Department

Assam Value Added Value Added Tax 0.04 2004-05 and The Superintendent of Taxes, Assam

Tax Act, 2003 2005-06 Unit B, Kar Bhawan Guwahati

Central Sales Tax Act,1956 Non submission of Sales Tax Form 0.43 2004-05 The Superintendent of Taxes, Assam Unit B, Kar Bhawan Guwahati

Central Sales Tax Act,1956 Non submission of Sales Tax Form 0.06 2003-04 Commercial Tax Officer, Namapally,

Hyderabad

Kerala VAT Act, 2003 Value Added Tax 0.54 2005-06 and Assistant Commissioner, Special 2006-07 Circle 1, Ernakulam

Central Excise Act, 1944 Service Tax 5.01 2005 to 2009 CESTAT, New Delhi

Central Sales Tax Act,1956 Non submission of Sales Tax Form 0.65 2006-07 MP Commercial Tax Board, Bhopal

Central Sales Tax Act,1956 Non submission of Sales Tax Form 0.81 2008-09 Additional Commissionor Sales Tax, Indore

Haryana Value Added Value Added Tax 0.16 2006-07 DETC, Gurgaon

Tax Act, 2003

Central Sales Tax Act,1956 Non submission of Sales Tax Form 1.52 2005-07 DETC, Gurgaon

Central Excise Act, 1944 CENVAT 6.26 2006 TO 2010 Commissioner of Central Excise, Delhi

Income Tax Act, 1961 Tax Deducted at Source 1.76 2008-09 and ITO(TDS), Delhi 2009-10

ESIC Act, 1948 ESC 0.27 1993 TO 2000 CJM,Gurgaon_

Central Sales Tax Act,1956 Non submission of Sales Tax Form 2.53 2004-05 Deputy Commissioner - Appeal (I) Lucknow

Central Sales Tax Act,1956 Non submission of Sales Tax Form 42.53 2005-06 & Deputy Commissioner -

2006-07 Appeal(I)Lucknow

Central Sales Tax Act,1956 Non submission of Sales Tax Form 3.75 2007-08 Deputy Commissioner - Appeal (I) Lucknow

x) ACCUMULATED LOSSES:-

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

xi) DUES TO FINANCIAL INSTITUTIONS, BANKS AND DEBENTURE HOLDERS:

Based on the records examined by us and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to any financial Institutions or banks.

xii) SECURITY FOR LOANS & ADVANCES GRANTED:

Based on the records examined by us and according to the information and explanations given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) SPECIAL STATUTE:

The company is not a chit fund/nidhi/mutual benefit fund/society and therefore, the provisions of any special statute applicable to these institutions are not applicable to the Company.

xiv) DEALINGS/TRADING IN SHARES, SECURITIES, DEBENTURES AND OTHER INVESTMENTS :

Based on the records examined by us and according to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures and other investments.

xv) GUARANTEES GIVEN:

Based on the records examined by us 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.

xvi) TERM LOANS:

According to the information and explanations given to us, the term loans were applied for the purpose for which the loans were taken.

xvii) UTILISATION OF FUNDS:

On an overall examination of the Balance Sheet and the Cash Flow of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

xviii) PREFERENTIAL ALLOTMENT OF SHARES:

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

xix) SECURITY FOR DEBENTURES ISSUED:

Company has not issued any debentures during the year and therefore the provisions of this clause are not applicable.

xx) PUBLIC ISSUE OF EQUITY SHARES:

During the year Company has not raised any money by public issue.

xxi) FRAUDS NOTICED:

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 B.K.KHARE & CO. Chartered Accountants (FRN : 105012W)

Devdatta Mainkar

Place: Mumbai Partner

Date: 30th May, 2012 Membership No. 109795


Mar 31, 2010

1. We have audited the attached Balance Sheet of Gabriel India Limited (the "Company") as at March 31, 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 March 31, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 March 31, 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 Gabriel India Limited on the financial statements for the year ended March 31, 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 off by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) 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 other than at two locations. Except for the two locations where reconciliation between inventories determined based on physical verification and book records was not performed and therefore the differences cannot be evaluated, the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has granted unsecured loans to one company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year and the year end balance of such loans aggregates to Rs. 97.5 million and Rs. Nil respectively.

(b) In our opinion, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the company.

(c) In respect of the aforesaid loans, the parties are repaying the principal amounts as stipulated and are also regular in payment of interest, where applicable.

(d) In respect of the aforesaid loans, there is no overdue amount more than Rupees One Lakh.

(e) 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.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchases are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, 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, 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 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, 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 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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 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 the undisputed statutory 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 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, the particulars of dues of income-tax, sales-tax, wealth-tax, service-tax, customs duty, excise duty and cess as at balance sheet date which have not been deposited on account of a dispute, are as indicated in note 4 on Schedule 19.

10. The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders as at the balance sheet date.

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. 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 or financial institutions during the year, are not prejudicial to the interest of the Company.

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

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 a 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 during the year.

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, except as indicated in Note 32 on Schedule 19, regarding an identified case of fraud against the Company during the year by three vendors of the Company (against whom legal action has been initiated by the Company for recovery of the amounts) involving fraudulent purchases of stores and consumables through falsification of records and documents that involved payments aggregating to Rs. 4.1 Million, we have not come across any instance of fraud on or by the Company, noticed or reported during the year.

For Price Waterhouse & Co.

Firm Registration Number: 007567S

Chartered Accountants

Jeetendra Mirchandani

Place: Mumbai Partner

Date: May 29, 2010 Membership Number F 48125

 
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