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Auditor Report of Garware Synthetics Ltd.

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the act') with respect to 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 principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014. This responsibility 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; design, implementation and maintenance of adequate internal financial controls, that are 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 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 there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements, that give 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 accounting policies used and the reasonableness of the accounting estimates made by the Company's management and Board of 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.

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 of the state of affairs of the Company as at 31st March 2015, its profit/loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order.

As required by section 143(3) of the Act, we further 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 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 aforesaid financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014.

e) on the basis of written representations received from the directors as on March 31, 2015, and 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) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014;

i. The Company has disclosed the impact of pending litigations as at March 31, 2015 on its Financial Position on its Financial Statements. ii. The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise. iii. There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.

Annexure referred to in paragraph 9 of the Independent Auditors Report of even date to the members of Garware Synthetics Limited on the Financial Statements as of and for the year ended March 31, 2015.

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

1. In respect of fixed assets

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

(b) As explained to us , Fixed Assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification. However the fixed assets include land & Building. The title of the same is under dispute and the case is pending with the court of law.

(c) In our opinion and according to the information and explanations given to us, no substantial fixed asset has been disposed off during the year and therefore does not affect the going concern assumption.

2. In respect of inventories

(a) As explained to us by the management and as observed by us, the inventory of raw material, finished goods stores and spares etc. has been physically verified during the year and specifically at the year-end by the management. In our opinion, the frequency of physical verification is reasonable having regard to the size and nature of business of the company.

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

(c) On the basis of examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory and no material discrepancy was noticed on physical verification of the same.

3. In respect of loans covered under Section 189 of the Companies Act,2013.

The company has not granted any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 189 of the Act.

4. In respect of internal control system

In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and for the sale of 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, no major weakness has not been noticed or reported.

5. The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013.

6. As informed to us, the Central Government has not prescribed maintenance of cost records under sub-section

(1) of Section 148 of the Act.

7. In respect of Statutory Dues

(a) According to the information and explanations given to us and based on the records of the company examined by us, the company is regular in depositing the undisputed statutory dues, including Provident Fund, , Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues, as applicable, with the appropriate authorities in India, except Profession Tax for the year amounting to Rs. 1,66,100 & Employer ESIC contribution for the year amounting to X 3,22,398.

(b) According to the information and explanations given to us and based on the records of the company examined by us, the particulars of dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes are as follows,

Sr. Financial Bombay Sales Central Sales Forum No. Year Tax (BST) Tax (CST) where Dispute is pending

1 2001 - 02 34,80,294 7,70,246 Deputy Commissioner of Sales Tax

2 2002 - 03 33,16,840 11,15,852 Deputy Commissioner of Sales Tax

3 2003 - 04 62,22,840 50,98,890 Deputy Commissioner of Sales Tax

4 2004 - 05 19,48,300 9,46,532 Deputy Commissioner of Sales Tax

5 2008 - 09 6,21,248 12,04,432 Deputy Commissioner of Sales Tax

(c) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise.

8. Company's accumulated losses at the end of the financial year are more than fifty per cent of its net worth and the company has incurred cash losses in this financial year but not in preceding financial year.

9. According to the records of the company examined by us and as per the information and explanations given to us, the company has not availed of any loans from any financial institution or banks and has not issued debentures.

10. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from a bank or financial institution during the year.

11. In our opinion, and according to the information and explanations given to us, the company has not raised any term loans during the year.

12. During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

For B.V.SHAH & ASSOCIATES

Chartered Accountants

Firm Registration No 109511W



Sd/-

BHARAT V. SHAH

Proprietor

Membership Number 040210

Place : Mumbai

Date : 30/05/2015


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act subject to point no 1.18 (iv) of significant accounting policy and 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, 2014;

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

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

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 theAnnexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards 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, 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.

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 to Independent Auditors'' Report

Referred to in paragraph 1 of "Report on Other Legal and Regulatory Requirements" of Our Report of even date.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. In respect of its fixed assets:

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

b. As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification. However the fixed assets include land & Building. The title of the same is under dispute and the case is pending with the court of law.

c. In our opinion and according to the information and explanations given to us, no substantial fixed asset has been disposed off during the year and therefore does not affect the going concern assumption.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. In respect of loans covered under Section 301 of the Companies Act, 1956.

a. As per the information and explanation given to us and the records produced to us for our verification, the company has not granted loans, secured or unsecured, to any Company, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b. The Company has not taken loans, secured or unsecured, during the current financial year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 whose terms are not prejudicial to the interest of the company except reimbursement of expenses which are in the nature of current account.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b. As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. In respect of statutory dues:

a. According to the information and explanations given to us, undisputed statutory dues including Provident Fund, E.S.I.C., Profession Tax, Investor Education and Protection Fund, Income Tax, TDS, Wealth Tax, Custom Duty, Cess and other material statutory dues applicable to it have been deposited late with the appropriate authorities.

b. According to the information and explanation given to us, undisputed amounts payable in respect of income tax, wealth

tax, customs duty, excise duty and cess and various other authorities were in arrears as at 31.03.2014 for a period of more than six months from the date they became payable is Rs. 208.47 lakhs.

c. According to the information and explanation given to us, there are no dues to sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute, except the cases give below

Sr Year Bombay Sales Central Forum where No. Tax (BST) Sales Tax Dispute is pending (CST)

1 2001 - 02 34,80,294 7,70,246 Deputy Commissioner of Sales Tax

2 2002 - 03 33,16,840 11,15,852 Deputy Commissioner of Sales Tax

3 2003 - 04 62,22,840 50,98,890 Deputy Commissioner of Sales Tax

4 2004 - 05 19,48,300 9,46,532 Deputy Commissioner of Sales Tax

5 2008 - 09 6,21,248 12,04,432 Deputy Commissioner of Sales Tax

10. In our opinion, the accumulated losses are more than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered in the audit and also in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company has not traded Shares. Proper records & timely entries have been maintained in this regard.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For B. V. Shah and Associates Chartered Accountants

Bharat V. Shah Proprietor M. No.: 040210

Place: Mumbai Date: 30th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of GARWARE SYNTHETICS 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 ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act subject to point no 1.18 of significant accounting policy and 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 Profit and Loss Account, of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards 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 j by the Company.

Referred to in paragraph 1 of "Report on Other Legal and Regulatory Requirements" of Our Report of even date. 1

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. In respect of its fixed assets:

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

b. As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification. However the fixed assets include land & Building. The title of the same is under dispute and the case is pending with the court of law.

c. In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. In respect of its inventories:

a. As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. In respect of loans covered under Section 301 of the Companies Act, 1956.

a. As per the information and explanation given to us and the records produced to us for our verification, the company has granted/taken interest-free loans, to a Company listed in the register maintained under Section 301 in which no stipulation has been made as to repayment of principal.

b. The Company has taken any loans, secured or unsecured, during the current financial year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 to repay its outstanding bank liabilities.

c. The loan given by the Company are not prima facie prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a. Based on the audit procedures applied by us and according to the information and explanations provided*by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b. As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

6. The Company has not accepted any deposits from the public covered under section 58A and 58AA of the Companies Act, 1956.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have not been made and maintained.

9. In respect of statutory dues:

a. According to the information and explanations given to us, undisputed statutory dues including Provident Fund, E.S.I.C., Profession Tax, Investor Education and Protection Fund, Income Tax, TDS, Wealth Tax, Custom Duty, Cess and other material statutory dues applicable to it have not been regularly deposited with the appropriate authorities.

b. According to the information and explanation given to us, undisputed amounts payable in respect of income tax, wealth tax, customs duty, excise duty and cess and various other authorities were in arrears as at 31.03.2013 for a period of more than six months from the date they became payable is Rs. 218.07 lakhs.

c. According to the information and explanation given to us, there are no dues to sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute, except the cases give below :

Sr. Name of the Statute Nature of dues Amount of Forum where dispute is pending No. Dispute (Net) (In Lakhs)

1 Sales Tax '' Sales Tax 4.21 Deputy Commis- sioner of Sales Tax



Sr. Bombay Central Sales No. Year Sales Tax Tax (CST) Forum where Dispute is pending (BST)

1 2001 - 02 34,80,294 7,70,246 Deputy Commissioner of Sales Tax

2 2002 - 03 33,16,840 11,15,852 Deputy Commissioner of Sales Tax

3 2003 - 04 62,22,840 50,98,890 Deputy Commissioner of Sales Tax

4 2004 - 05 19,48,300 9,46,532 Deputy Commissioner of Sales Tax

10. In our opinion, the accumulated losses are more than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered in the audit and also in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company has not traded Shares. Proper records & timely entries have been maintained in this regard.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

16. Based on our audit procedures and on the information given by the management, we report that the company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short- term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For B.V. Shah & Associates

Chartered Accountants

Bharat V. Shah

Proprietor

M No. 040210

Place: Mumbai

Date : 05/09/2013


Mar 31, 2012

1. We have audited Balance Sheet of GARWARE SYNTHETICS LIMITED as at 31st March, 2012 and also the annexed Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our Audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards required 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to in paragraph 2 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 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 the books of account.

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in compliance with the accounting standards referred to in sub section (3c) of Section 211 of the Companies Act, 1956.

e) As per the information and explanation given to us, all the Directors of the Company are qualified from being appointed as Directors in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

5. We further report that -

a) The Accounts have been prepared on going concern basis.

b) Subject to Para (a) above, we are of the opinion, that to the best of our information and according to the explanation given to us the accounts read together with the accounting policies and the notes thereon, give 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.

c) In the case of Balance Sheet of the State of affairs of the Company as at 31.03.2012 and

d) In the case of the Profit and Loss Account, of the Profit for the year ended on that date.

e) In so far as it relates to the Cash Flow Statement of the Cash Flow for the year ended on that date.

ANNEXURE REFFERED TO IN PARAGRAPH 3 OF AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF GARWARE SYNTHETICS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST

MARCH, 2012. 1. In respect of its fixed assets:

a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of information available.

b. According to the information and explanations given to us, the fixed assets have been physically verified by the management during the year in a phased periodic manner, which in our opinion is reasonable, having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification. However the fixed assets include land & Building. The title of the same is under dispute and the case is pending with the court of law.

c. The Company has not disposed off any substantial part of fixed assets that would affect the going concern status of the Company.

2. In respect of its inventories:

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

b. The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company has maintained proper records of inventory. As explained to us, the discrepancies noticed in physical verification of the stock as compared to book records were not material and the same have been properly dealt with in the books of accounts.

3. In respect of loans covered under Section 301 of the Companies Act, 1956.

a. As per the information and explanation given to us and the records produced to us for our verification, the company has granted/taken interest-free loans, to a Company listed in the register maintained under Section 301 and also to directors in which no stipulation has been made as to repayment of principal.

b. The Company has taken any loans, secured or unsecured, during the current financial year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956 to repay its outstanding bank liabilities.

c. The loan given by the Company are not prima facie prejudicial to the interest of the Company.

4. 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 the purchases of inventories, fixed assets and with regard to sale of goods. As per the information given to us, no major weaknesses in the internal controls have been identified by the management during the year. During the course of our audit, nothing had come to our notice that may suggest a major weakness in the internal control systems of the company;

5. In respect of transactions covered under Section 301 of the Companies Act, 1956.

a In our opinion and according to the information and explanations given to us, no any such the transactions made in pursuance of contracts or arrangements, that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, there are no transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000/- (Rupees Five Lakhs Only) or more in respect of any party.

6. During the year the Company has not accepted any deposits under the provisions of Section 58 A, 58 AA of the Companies Act 1956 and the Rules framed there under.

7. The Company has Internal Audit system, which in our opinion is commensurate with the size and nature of its business.

8. As per the explanation given to us, the company has not prepared the Cost records pursuant to the Rules made by the Central Government for maintenance of cost records under Section 209(l)(d) of the Companies Act, 1956 for the year 2010-11.

9. In respect of statutory dues:

a. According to the information and explanations given to us, undisputed statutory dues including Provident Fund, E.S.I.C., Profession Tax, Investor Education and Protection Fund, Income Tax, TDS, Wealth Tax, Custom Duty, Cess and other material statutory dues applicable to it have not been regularly deposited with the appropriate authorities.

b. According to the information and explanation given to us, undisputed amounts payable in respect of income tax, wealth tax, customs duty, excise duty and cess and various other authorities were in arrears as at 31.03.2012 for a period of more than six months from the date they became payable is Rs.223.67 lakhs.

c. According to the information and explanation given to us, there are no dues to sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute, except the cases give below :

Sr. Name of the Nature of Amount of Forum where dispute is No Statute dues Dispute (Net) pending (In Lakhs)

1. Sales Tax Sales Tax 4.21 Deputy Commissioner of Sales Tax

Sr Bombay Sales Tax Central Sales Tax Forum where No Year (bst) (CST) Dispute is pending

Deputy Commissioner 1 2001 - 02 34,80,294 7,70,246 of Sales Tax

Deputy Commissioner 2 2002-03 33,16,840 11,15,852 of Sales Tax

Deputy Commissioner 3 2003-04 62,22,840 50,98,890 of Sales Tax

Deputy Commissioner 4 2004-05 19,48,300 9,46,532 of Sales Tax

10 in our opinion, the accumulated losses are more than fifty percent of its net worth, the company has incurred cash losses during the financial year covered in the audit and also in the immediately preceding

financial year.

11. -me Company has not defaulted in repayment of dues to a financial institutions and bank. The Company , has not issued any Debentures.

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

13 In our opinion, the company is not a chit fund / nidhi / mutual benefit fund / society therefore the provision of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

14. The Company has not dealt or traded in shares, securities, debentures or other investments during the year.

15. As per the information and explanation given to us the Company has given guarantees for loan taken from im, the terms and conditions whereof are prima facie prejudicial to the interest of the company. However, the said loan is defaulted.

16. The Company has not raised any new term loan during the year. -

17 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on long term basis have been used for short term investment and funds raised on short term basis have been used for short term purposes except to the extent of accumulated losses.

18. According to the information and explanations given to us, the Company has not made preferential allotment of equity and preference shares to companies covered in the register maintained under Section 301 of the Companies Act 1956.

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

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

21. As per the information and explanations given to us and on the basis of examination of records, no material fraud on or by the company was noticed or reported during the year.

For B.V. Shah & Associates

Chartered Accountants

Sd/-

Bharat V. Shah

Proprietor

M No. 040210

Place : Mumbai

Date : 24th August, 2012


Mar 31, 2011

1. We have audited Balance Sheet of GARWARE SYNTHETICS LIMITED as at 31st March, 2011 and also the annexed Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our Audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards required 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to in paragraph 2 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 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 the books of account.

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in compliance with the accounting standards referred to in sub section (3c) of Section 211 of the Companies Act, 1956.

e) As per the information and explanation given to us, all the Directors of the Company are disqualified from being appointed as Directors in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

5. We further report that -

a) The Accounts have been prepared on going concern basis as explained in the Note no.1 of Schedule Q.

b) Subject to Para (a) above, we are of the opinion, that to the best of our information and according to the explanation given to us the accounts read together with the accounting policies and the notes thereon, give 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.

c) In the case of Balance Sheet of the State of affairs of the Company as at 31.03.2011 and

d) In the case of the Profit and Loss Account, of the Profit for the year ended on that date.

e) In so far as it relates to the Cash Flow Statement of the Cash Flow for the year ended on that date.



For B.V.Shah & Associates

Chartered Accountants

Bharat V. Shah

Proprietor

M No. 040210

Place : Mumbai

Date : 29/08/2011

ANNEXURE REFFERED TO IN PARAGRAPH 3 OF AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF GARWARE SYNTHETICS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2011.

1. In respect of its fixed assets:

a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of information available.

b. According to the information and explanations given to us, the fixed assets have been physically verified by the management during the year in a phased periodic manner, which in our opinion is reasonable, having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification. However the fixed assets include land & Development. The title of the same is under dispute and the case is pending with the court of law.

c. The Company has not disposed off any substantial part of fixed assets that would affect the going concern status of the Company.

2. In respect of its inventories:

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

b. The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company has maintained proper records of inventory. As explained to us, the discrepancies noticed in physical verification of the stock as compared to book records were not material and the same have been properly dealt with in the books of accounts.

3. In respect of loans covered under Section 301 of the Companies Act, 1956.

a. As per the information and explanation given to us and the records produced to us for our verification, the company has granted/taken interest-free loans, to a Company listed in the register maintained under Section 301 and also to directors in which no stipulation has been made as to repayment of principal.

b. The Company has not taken any loans, secured or unsecured, during the current financial year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

c. The loan given by the Company are prima facie prejudicial to the interest of the Company.

d. There are overdue amount to the extent of Rs. 3,53,957/-.

4. 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 the purchases of inventories, fixed assets and with regard to sale of goods. As per the information given to us, no major weaknesses in the internal controls have been identified by the management during the year. During the course of our audit, nothing had come to our notice that may suggest a major weakness in the internal control systems of the company;

5. In respect of transactions covered under Section 301 of the Companies Act, 1956.

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, there are no transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000/ - (Rupees Five Lakhs Only) or more in respect of any party.

6. During the year the Company has not accepted any deposits under the provisions of Section 58 A, 58 AA of the Companies Act 1956 and the Rules framed there under.

7. The Company has Internal Audit system, which in our opinion is commensurate with the size and nature of its business.

8. As per the explanation given to us, the company has not prepared the Cost records pursuant to the Rules made by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for the year 2010-11.

9. In respect of statutory dues:

a. According to the information and explanations given to us, undisputed statutory dues including Provident Fund, E.S.I.C., Profession Tax, Investor Education and Protection Fund, Income Tax, TDS, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it have not been regularly deposited with the appropriate authorities.

b. According to the information and explanation given to us, undisputed amounts payable in respect of income tax, wealth tax, customs duty, excise duty and cess and various other authorities were in arrears as at 31.03.2011 for a period of more than six months from the date they became payable is Rs.282.71 lakhs.

c. According to the information and explanation given to us, there are no dues to sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute, except the cases give below :

Sr. No Name of Nature of Amount of Forum where the Statute dues Dispute dispute is (Net) (In pending Lakhs)

1 Sales Tax Sales Tax 4.21 Deputy Commissioner of Sales Tax

10. In our opinion, the accumulated losses are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered in the audit and also in the immediately preceding financial year.

11. The Company has defaulted in repayment of dues to a financial institutions and bank. The Company has not issued any Debentures.

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

13. In our opinion, the company is not a chit fund / nidhi / mutual benefit fund / society therefore the provision of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

14. The Company has not dealt or traded in shares, securities, debentures or other investments during the year.

15. As per the information and explanation given to us the Company has given guarantees for loan taken from banks or financial institutions, the terms and conditions whereof are prima facie prejudicial to the interest of the company. However, the said loan is defaulted.

16. The Company has not raised any new term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on long term basis have been used for short term investment and funds raised on short term basis have been used for short term purposes except to the extent of accumulated losses.

18. According to the information and explanations given to us, the Company has not made preferential allotment of equity and preference shares to companies covered in the register maintained under Section 301 of the Companies Act 1956.

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

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

21. As per the information and explanations given to us and on the basis of examination of records, no material fraud on or by the company was noticed or reported during the year.

For B.V. Shah & Associates

Chartered Accountants

Bharat V. Shah

Proprietor M No. 040210

Place : Mumbai

Date : 29/08/2011


Mar 31, 2010

1. We have audited Balance Sheet of GARWARE SYNTHETICS LIMITED as at 31st March, 2010 and also the annexed Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our Audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards required 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

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

4. Further to our comments in the Annexure referred to in paragraph 2 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 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 the books of account.

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in compliance with the accounting standards referred to in sub section (3c) of Section 211 of the Companies Act, 1956.

e) As per the information and explanation given to us, all the Directors of the Company are disqualified from being appointed as Directors in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

5. We further report that -

a) The Accounts have been prepared on 'going concern' basis as explained in the Note no.1 of Schedule Q.

b) Subject to Para (a) above, we are of the opinion, that to the best of our information and according to the explanation given to us the accounts read together with the accounting policies and the notes thereon, give 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.

c) In the case of Balance Sheet of the State of affairs of the Company as at 31.03.2010 and

d) In the case of the Profit and Loss Account, of the Profit for the year ended on that date.

e) In so far as it relates to the Cash Flow Statement of the Cash Flow for the year ended on that date.

ANNEXURE REFFERED TO IN PARAGRAPH 3 OF AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF GARWARE SYNTHETICS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH, 2010.

1. In respect of its fixed assets:

a. The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of information available.

b. According to the information and explanations given to us, the fixed assets have been physically verified by the management during the year in a phased periodic manner, which in our opinion is reasonable, having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification. However the fixed assets include land & Development. The title of the same is under dispute and the case is pending with the court of law.

c. The Company has not disposed off any substantial part of fixed assets that would affect the going concern status of the Company.

2. In respect of its inventories:

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

b. The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company has maintained proper records of inventory. As explained to us, the discrepancies noticed in physical verification of the stock as compared to book records were not material and the same have been properly dealt with in the books of accounts.

3. In respect of loans covered under Section 301 of the Companies Act, 1956.

a. As per the information and explanation given to us and the records produced to us for our verification, the company has granted/taken interest-free loans, to a Company listed in the register maintained under Section 301 and also to directors in which no stipulation has been made as to repayment of principal.

b. The Company has not taken any loans, secured or unsecured, during the current financial year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

c. The loan given by the Company are prima facie prejudicial to the interest of the Company.

d. There are overdue amount to the extent of Rs. 3,53,957/-.

4. 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 the purchases of inventories, fixed assets and with regard to sale of goods. As per the information given to us, no major weaknesses in the internal controls have been identified by the management during the year. During the course of our audit, nothing had come to our notice that may suggest a major weakness in the internal control systems of the company;

5. In respect of transactions covered under Section 301 of the Companies Act, 1956.

a. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b. In our opinion and according to the information and explanations given to us, there are no transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000/ - (Rupees Five Lakhs Only) or more in respect of any party.

6. During the year the Company has not accepted any deposits under the provisions of Section 58 A, 58 AA of the Companies Act 1956 and the Rules framed there under.

7. The Company has Internal Audit system, which in our opinion is commensurate with the size and nature of its business.

8. As per the explanation given to us, the company has not prepared the Cost records pursuant to the Rules made by the Central Government for maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for the year 2006-2007

9. In respect of statutory dues:

a. According to the information and explanations given to us, undisputed statutory dues including Provident Fund, E.S.I.C., Profession Tax, Investor Education and Protection Fund, Income Tax, TDS, Wealth Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it have not been regularly deposited with the appropriate authorities.

b. According to the information and explanation given to us, undisputed amounts payable in respect of income tax, wealth tax, customs duty, excise duty and cess and various other authorities were in arrears as at 31.03.2010 for a period of more than six months from the date they became payable is Rs.282..71 lakhs.

c. According to the information and explanation given to us, there are no dues to sales tax, income tax, customs duty, wealth tax, excise duty and cess which have not been deposited on account of any dispute, except the cases give below :

Sr. No Name of Nature of Amount of Forum where the Statute dues Dispute dispute is (Net) (In pending Lakhs)

1 Sales Tax Sales Tax 4.21 Deputy Commissioner of Sales Tax

10. In our opinion, the accumulated losses are more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered in the audit and also in the immediately preceding financial year.

11. The Company has defaulted in repayment of dues to a financial institutions and bank. The Company has not issued any Debentures.

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

13. In our opinion, the company is not a chit fund / nidhi / mutual benefit fund / society therefore the provision of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

14. The Company has not dealt or traded in shares, securities, debentures or other investments during the year.

15. As per the information and explanation given to us the Company has given guarantees for loan taken from banks or financial institutions, the terms and conditions whereof are prima facie prejudicial to the interest of the company. However, the said loan is defaulted.

16. The Company has not raised any new term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on long term basis have been used for short term investment and funds raised on short term basis have been used for short term purposes except to the extent of accumulated losses.

18. According to the information and explanations given to us, the Company has not made preferential allotment of equity and preference shares to companies covered in the register maintained under Section 301 of the Companies Act 1956.

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

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

21. As per the information and explanations given to us and on the basis of examination of records, no material fraud on or by the company was noticed or reported during the year.

For B.V. Shah & Associates

Chartered Accountants

Bharat V. Shah

Proprietor

M No. 040210

Place : Mumbai

Date : 19/08/2010

 
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