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Auditor Report of Garware Polyester Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of GARWARE POLYESTER LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company's branch at London (United Kingdom).

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safe guarding 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

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to Note No. 30 relating to payment of remuneration to managerial personnel which is subject to sanction of the Central Government.

Our opinion is not modified in respect of this matter.

Other Matter

We did not audit the financial statements of one branch included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs. 32.58 Lakhs as at 31st March, 2015 and total revenues of Rs. 315.84 Lakhs for the year ended on that date, as considered in the standalone financial statements. The financial statements of this branch has been audited by the branch auditor whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of this branch, is based solely on the report of such branch auditor.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. 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.

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

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

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branch not visited by us.

(c) The reports on the accounts of the branch office of the Company audited under Section 143 (8) of the Act by branch auditor have been sent to us and have been properly dealt with by us in preparing this report.

(d) 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 and with the returns received from the branch not visited by us.

(e) 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.

(f) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements (Refer Note No. 37).

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts (Refer Note No. 39).

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

ANNEXURE TO THE AUDITORS' REPORT TO THE MEMBERS OF GARWARE POLYESTER LIMITED (Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

1. (a) The Company has maintained 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 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) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. The Company has not granted secured or unsecured loans, to companies, firms or other parties covered in the register maintained under Section 189 of the Act.

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

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public as per 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.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government of India for the maintenance of cost records 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 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.

According to the information and explanations given to us and the records of the Company examined by us, in our opinion, no undisputed amounts payable 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, as applicable were in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

(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, duty of customs duty of excise, value added tax or cess as at March 31, 2015 which have not been deposited on account of a dispute, are as follows:

Name of the Nature of Amount Financial Year to statute dues (Rs. in Lakhs) which the amount relates Income Tax Income Tax 31.52 2002-03 and 2005-06 Act, 1961

Income Tax Income Tax 3.70 2006-07 and 2007-08 Act, 1961

Income Tax Income Tax 1102.80 2009-10 Act, 1961

Income Tax Income Tax 14.57 2010-11 Act, 1961

Central Excise Excise Duty 5.33 1989-90 and 2006-07 Act, 1944

Central Excise Excise Duty 38.87 1994-95 and 2001-02 Act, 1944

Local Body Tax LBT 383.06 2012-13

Name of the Statute Forum where the dispute is pending

Income tax Act 1961 High Court

Income tax Act 1961 Income Tax Appellate Tribunal

Income tax Act 1961 Commissioner of Income Tax (A)

Income tax Act 1961 Assessing Officer

Income tax Act 1961 High Court

Central Excise Act Central Excise and Service Tax Appellate Tribunal 1944

Central Excise Act High Court 1944

(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. 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 as at the balance sheet date.

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.

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

12. According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Manubhai & Shah

Chartered Accountants (Firm's Registration No.: 106041W)

P. N. Shah Partner (Membership No.: 001738)

Place: Mumbai Date: 29th May, 2015


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including 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 Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Emphasis of Matter

We draw attention to Note No : 30 relating to payment of remuneration to managerial personnel which is subject to sanction of the Central Government.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

(d) in our opinion, the Balance Sheet, Statement of profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

(e) the report on the accounts of the branch offices audited under section 228 of the Act by a person other than the Company''s auditor has been forwarded to us as required by clause (c) of sub-section (3) of section 228 of the Act and have been dealt with in preparing our report in the manner considered necessary by us.

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

ANNEXURE TO THE AUDITORS'' REPORT TO THE MEMBERS OF GARWARE POLYESTER LIMITED (Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section 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) The Company has a regular programme of physical verifcation of its fixed assets by which all fixed assets are verifed in phased manner 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 certain fixed assets were physically verifed during the year and no material discrepancies were noted on such verifcation.

c) In our opinion, the Company has not disposed off a substantial part of the fixed assets during the year and the going concern status of the Company is not affected.

ii) a) The inventory has been physically verifed by the management during the year. In our opinion, the frequency of verifcation is reasonable.

b) The procedures of physical verifcation of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. No material discrepancies were noticed on physical verifcation.

iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory, purchase of fixed assets and also for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls in respect of these areas.

v) a) In our opinion and according to the information and explanations given to us, transactions that need to be entered in the register maintained under section 301 of the Act have been so entered.

b) According to the information and explanations given to us, 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 have been made at prices which are reasonable having regards to prevailing market prices at the relevant time in the opinion of management.

vi) The Company has not accepted any deposits from the public.

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 cost records maintained by the Company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209 (1) (d) of the Act, and are of the opinion that prima facie the prescribed cost records have been maintained. We have however not made a detailed examination of the cost records.

ix) a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted in the books of account in respect of undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax/ VAT, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. As at 31st March 2014 there are no undisputed statutory dues which are outstanding for a period exceeding six months from the date they became payable.

b) According to the information and explanations given to us, the following statutory dues have not been deposited by the Company on account of disputes:

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

Income Tax 2003-04 and Income Tax Income Tax 50.92 Act, 1961 2007-08 Appellate Tribunal

Income Tax Income Tax 20.95 2005-06 High Court Act, 1961

Income Tax Commissioner of Income Tax 1292.80 2009-10 Act, 1961 Income Tax

Central Excise Central Excise 1994-95 and Excise Duty 38.87 and Service Tax Act, 1944 2001-02 Appellate Tribunal

Central Excise 1989-90 and Excise Duty 5.33 High Court Act, 1944 2006-07

Central Excise 2007-08 to Commissioner of Excise Duty 423.89 Act, 1944 2011-12 Excise

Central Excise 2011-12 to Asst. Commiss -ioner Excise Duty 6.46 Act, 1944 2012-13 of Excise

Central Excise Central Excise Service Tax 2.61 2012-13 and Service Tax Act, 1944 Appellate Tribunal

Local Body Tax LBT 308.06 2012-13 High Court

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

xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to any financial institution or bank during the year.

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

xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures or other investments.

xv) 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 bank or financial institutions during the year.

xvi) In our opinion, and according to the information and explanations given to us, the term loans have been applied for the purpose for which they are raised.

xvii) According to the information and explanations given to us and on overall examination of the balance sheet of the Company, we report that the Company has not used funds raised on short term basis for long term investment during the year.

xviii) The Company has not made preferential allotment of shares during the year to companies/firms/parties covered in the register maintained under Section 301 of the Act.

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

xx) According to the information and explanations given to us, the Company has not raised any money by public issue during the year.

xxi) According to the information and explanations given to us and on the basis of the examination of the records, no fraud on or by the Company was noticed or reported during the course of our audit.

For Shah & Co.

Chartered Accountants

Firm Registration No: 109430W

P. N. Shah

Partner

Membership No.: 001738

Place : Mumbai Date : 29th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of GARWARE POLYESTER LIMITED ("the Company”)'' which comprise the Balance Sheet as at 31st March '' 2013'' the Statement of Proft and Loss and the Cash Flow Statement for the year then ended'' and a summary of the signifcant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position'' fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in Section 211(3C) 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 fnancial statements that give a true and fair view and are free from material misstatement'' whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these fnancial 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 fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fnancial statements. The procedures selected depend on the auditor’s judgment'' including the assessment of the risks of material misstatement of the fnancial 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 fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management'' as well as evaluating the overall presentation of the fnancial statements.

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

Opinion

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

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

(b) in the case of the Statement of Proft and Loss'' of the Proft of the Company for the year ended on that date; and

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

Emphasis of Matter

We draw attention to (a) Note No: 28 relating to revaluation of assets and adjustment of impairment of assets against the revaluation reserve and (b) Note No: 29 relating to payment of remuneration to managerial personnel which is subject to sanction of the Central Government.

Our opinion is not qualifed in respect of these matters.

Report on Other Legal and Regulatory Requirements

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

2. As required by Section 227(3) of the Act'' we report that:

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

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

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

(d) In our opinion'' the Balance Sheet'' the Statement of Proft and Loss'' and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act 1956.

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

i) a) The Company has maintained proper records showing full particulars'' including quantitative details and situation of fxed assets;

b) The Company has a regular programme of physical verifcation of its fxed assets by which all fxed assets are verifed in phased manner 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 certain fxed assets were physically verifed during the year and no material discrepancies were noted on such verifcation;

c) In our opinion'' the Company has not disposed off a substantial part of the fxed assets during the year and the going concern status of the Company is not affected;

ii) a) The inventory has been physically verifed by the management during the year. In our opinion'' the frequency of verifcation is reasonable;

b) The procedures of physical verifcation of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business;

c) The Company is maintaining proper records of inventory; No material discrepancies were noticed on physical verifcation;

iii) The Company has neither granted nor taken any loans'' secured or unsecured'' to or from companies'' frms or other parties covered in the register maintained under Section 301 of the Act;

iv) In our opinion and according to the information and explanations given to us'' there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to purchase of inventory'' purchase of fxed assets and also for the sale of goods and services. During the course of our audit'' we have not observed any continuing failure to correct major weaknesses in internal controls in respect of these areas;

v) a) In our opinion and according to the information and explanations given to us'' transactions that need to be entered in the register maintained under section 301 of the Companies Act'' 1956 have been so entered.

b) According to the information and explanation given to us'' the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act'' 1956 and exceeding the value of rupees fve lakhs in respect of any party during the year have been made at prices which are reasonable having regards to prevailing market prices at the relevant time in the opinion of management.

vi) The Company has not accepted any deposits from the public;

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 cost records maintained by the company pursuant to the companies (Cost Accounting Records) Rules'' 2011 prescribed by the Central Government under section 209(1)(d) of the Companies Act'' 1956'' and are of the opinion that prima facie the prescribed cost records have been maintained. We have however not made a detailed examination of the cost records.

ix) a) According to the information and explanation given to us and on the basis of our examination of the records of the Company'' amounts deducted in the books of account in respect of undisputed statutory dues'' including Provident Fund'' Employees’ State Insurance'' Income Tax'' Sales Tax/VAT'' Wealth Tax'' Service Tax'' Cess and other material statutory dues have been generally regularly deposited during the year by the company with the appropriate authorities. As at March 31'' 2013 there are no undisputed statutory dues which are outstanding for a period exceeding six months from the date they became payable;

b) According to the information and explanations given to us'' the following statutory dues have not been deposited by the Company on account of disputes:

Name of statute Nature of Amount Period to Forum where the Dues (Rs. in lakhs) which the dispute is amount pending relates

2003-04 and Assessment Income Tax Act'' 1961 Income Tax 68.30 2005-06 Offcer

Commissioner Income Tax Act'' 1961 Income Tax 3.57 2007-08 of Income Tax

Central Excise 1994-95 and and Service Central Excise Act'' 1944 Excise Duty 38.87 2001-02 Tax Appellate Tribunal

1989-90 and High Court Central Excise Act'' 1944 Excise Duty 5.33 2006-07

2007-08 to Commissioner Central Excise Act'' 1944 Excise Duty 161.67 2011-12 of Excise

Central Excise and Service Central Excise Act'' 1944 Service Tax 2.61 2012-13 Tax Appellate Tribunal

Central Sales Tax Act'' Deputy 1956 and Sales Tax Acts Sales Tax 4.88 1982-83 Commissioner of various states

Sales Tax Central Sales Tax Act'' 1984-85 & Assessing 1956 and Sales Tax Acts Sales Tax 12.25 1993-94 Offcer'' Delhi of various states and Noida

High Court of Judicature of Local Body Tax LBT 302.62 2012-13 Bombay'' Bench at Aurangabad

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

xi) In our opinion and according to the information and explanations given to us'' the Company has not defaulted in the repayment of dues to any fnancial institution or bank during the year;

xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares'' debentures and other securities;

xiii) In our opinion and according to the information and explanation given to us'' the Company is not a chit fund or a nidhi/mutual beneft fund/society;

xiv) According to the information and explanation given to us'' the Company is not dealing or trading in shares'' securities'' debentures or other investments;

xv) In our opinion and according to the information and explanation given to us'' the company has not given any guarantee for loans taken by others from bank or fnancial institutions during the year;

xvi) In our opinion'' and according to the information and explanation given to us'' the term loans have been applied for the purpose for which they are raised.

xvii) According to the information and explanation given to us and on overall examination of the balance sheet of the Company'' we report that the Company has not used funds raised on short term basis for long term investment during the year.

xviii) The Company has not made preferential allotment of shares during the year to companies/frms/parties covered in the register maintained under Section 301 of the Act;

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

xx) According to the information and explanations given to us'' the Company has not raised any money by public issue during the year;

xxi) According to the information and explanations given to us and on the basis of the examination of the records'' no fraud on or by the Company was noticed or reported during the course of our audit.

Shah & Co. Chaturvedi & Shah

Chartered Accountants Chartered Accountants

Firm Registration No: 109430W Firm Registration No: 101720W

P. N. Shah Parag D. Mehta

Partner Partner

Membership No.: 001738 Membership No.: 113904

Place : Mumbai Date : 29th May'' 2013


Mar 31, 2012

We have audited the attached Balance Sheet of GARWARE POLYESTER LIMITED as at 31st March, 2012 and also the Statement of profit and loss and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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.

As required by the Companies (Auditors' Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

Further to our comments in the Annexure referred to in paragraph (3) above, we state 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 the Cash Flow Statement referred to in this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of profit and loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) 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 as on the said date.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts read together with the 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.

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

(ii) In the case of the Statement of profit and loss, of the "Profit" of the Company for the year ended on that date.

AND

(iii) In the case of the Cash Flow Statement of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 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) A major portion of the assets has been physically verified by the management during the year. We are informed that no material discrepancies have been noticed by the management on such verification.

(c) The company has not disposed off substantial part of its fixed assets during the year. According to the information and explanations given to us, we are of the opinion that the disposal of fixed assets has not affected the going concern status of the company.

(ii) (a) The inventories have been physically verified during the year by the Management. in our opinion the frequency of verification is reasonable.

(b) 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) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material in relation to the operations of the company and have been properly dealt with in the books of account.

(iii) (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 Companies Act, 1956. Hence the provisions of Clause 4(iii) b, (c) and (d) of the order are not applicable for the year under report.

(b) The company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956. Hence the provisions of clauses 4 (iii) (f) and (g) of the order are not applicable for the year under report.

(iv) in our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) (a) in our opinion and according to the information and explanations given to us the transactions that need to be entered in the register maintained under section 301 of the companies Act, 1956 have been so entered.

(b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 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 prevailing market prices at the relevant time in the opinion of the management.

(vi) According to the information and explanations given to us, the company has not accepted during the year any deposits from the public as per the provisions of Sections 58 A and 58 AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975. To the best of our knowledge and 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.

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

(viii) We have broadly reviewed the cost records maintained by the company pursuant to the companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section 209(1) (d) of the companies Act, 1958, and are of the opinion that prima facie the prescribed cost records have been maintained. We have however not made a detailed examination of the cost records.

(ix) (a) According to the information and explanations given to us, 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, custom duty, excise duty, cess and other material statutory dues applicable to it. As explained to us, no undisputed amounts payable in respect of above were in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable.

(b) The following dues have not been deposited on account of dispute:

Nature of Dues Financial Year Amount Forum where dispute is

to which the (Rs.inlakhs) pending Dispute pertains

income Tax 2002 - 03 75.04 Commissioner of income Tax, Mumbai 2005 - 06 14.25 Commissioner of income Tax,

Mumbai

Excise Duty 1994 - 95 7.21 Customs, excise and Service

2001 - 02 31.40 Tax Appellate Tribunal, Mumbai

4.92 High Court, Aurangabad

Excise Duty 1989 - 90 0.41 High Court, Mumbai

Sales Tax 1982 - 83 4.88 Deputy Commissioner, Delhi

Sales Tax 1984 - 85 6.00 Sales Tax Assessing Officer,

1993 - 94 6.25 Delhi & Noida

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

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

(xii) 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) As the company is not a chit fund or a nidhi, mutual benefit fund or society, the provisions of clause 4(xiii) of the Companies (Auditors' report) Order, 2003 are not applicable to the company.

(xiv) As the company is not dealing in or trading in shares, securities, debentures and other investments, the provisions of clause

(xiv) Of the Companies (Auditors' report) Order, 2003 are not applicable to the company.

(xv) According to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from Bank or Financial institutions.

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

(xvii) According to the information and explanations given to us, the company has not applied short term borrowings for long term use.

(xviii) According to the information and explanations given to us, 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, except to the extent of shares allotted as per the Schemes of Amalgamation and

Arrangements of Great Design properties pvt. ltd. and Garware Chemicals ltd.

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

(xx) The company has not raised any money by way of public issue during the year.

(xxi) According to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the year. out of the above :

For Shah & Co.

Chartered Accountants (Registration No.109430W)

(P.N.Shah) Mumbai Partner

29th June, 2012 Membership No. 001738

 
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