Auditor Report of Gontermann Peipers (India) Ltd.

Mar 31, 2016

TO THE MEMBERS OF GONTERMANN-PEIPERS (INDIA) LIMITED

1. Report on the Financial Statements

We have audited the accompanying financial statements of GONTERMANN - PEIPERS (INDIA) LIMITED (CIN-L27106WB1966PLC101410) (“the company”) which comprises the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management’s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters 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 the Companies (Accounts) Rules, 2014, as amended. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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.

3. 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 true and fair view 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 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 financial statements.

4. Emphasis Matters

Without qualifying our opinion, we draw attention to the following notes to the financial statements:

a) Note No. 30 to the financial statements, relating to remuneration paid during financial year 2010-11 to Ex-Managing Director of the Company, in excess of the limits prescribed under section 198 read with Schedule XIII of the erstwhile Companies Act, 1956 amounting to Rs. 35.62 Lacs (after recovery of amount payable of Rs. 22.15 Lacs), accordingly, the said amount has been shown as recoverable under Short term Loans and Advances (Note No. 16). The company has initiated recovery process of such excess remuneration paid post rejection of application u/s 309(5B) of the Act by the Central Government during financial year 2014-15.

b) Note No. 32 to the financial statements, wherein, as explained, Corporate Debt Restructuring (CDR) Scheme is effective from 01st January 2012. The outstanding liabilities of the company have been substantially restructured under the aegis of CDR Scheme, which extends till financial year 2021, and highlighting the position relating to (i) pending creation of pari-passu charge (equitable mortgage) on the immovable assets of the company in favour of CDR lending banks, (ii) increase in working capital borrowings from CDR lenders on account of conversion and utilization of non-fund based limits into fund based limits (short term working capital facilities) and (iii) continuous defaults made by the company in repayment of principal and interest to the CDR lender banks, specially UCO bank (Lead bank), the account of which has become irregular.

c) Note No. 33 to the financial statements, relating to the Scheme of Amalgamation, the accounting treatment laid out in the scheme and consequential adjustments that would arise on necessary approval of Hon''ble High Court of Calcutta and Bombay will be dealt by the company in the financial statements, upon effectiveness of the scheme.

d) Note No. 34 to the financial statements indicating the basis and factors for complete erosion of net worth of the company on the reporting date:

i) incurring heavy negative operating cash flows for the past few years on account of economy slowdown, underutilization of installed production capacities and paucity of adequate working capital,

ii) the company''s current liabilities exceed its current assets by Rs. 8025.64 Lacs as at the balance sheet date, resulting into negative working capital gaps,

iii) cancellation of term loans by the CDR lenders as envisaged in the CDR scheme,

iv) continuously defaulting in repayment of interest and principal on borrowings and,

v) non-deposition and delays in deposition of statutory liabilities with Government Exchequer in stipulated time. These conditions, along with other matters set forth in the above referred note, indicates the existence of material uncertainty that casts significant doubt about the company''s ability to continue functioning as a going concern. However, management''s perspective of improved performance/ financial position is largely dependent upon other avenues of raising funds, large confirmed dispatch able orders in hand, company''s intention to monetize its identified non-core immovable properties and synergy benefits from ongoing amalgamation process under approval from Hon''ble High Courts and its implementation and accordingly, does not include any adjustments, relating to the recoverability and classification of recorded assets and classification of liabilities, that may be necessary if the entity is unable to continue as a going concern.

Under the circumstances, the financial statements of the company have been prepared by the management on a going concern basis and in the opinion of the management no adjustments are considered necessary to the carrying value of its assets and liabilities.

e) Note No. 35 to the financial statements, relating to receipt of promoters'' contribution during financial year 2014-15 in compliance of restructuring package by CDR lenders in foreign currency equivalent to Rs. 91.61 Lacs in the shape of advance against share application money which is outstanding and lying on the reporting date under current liabilities (Note No. 7) and basis and reasons stated in the said note restraining the company from allotting the shares and holding such amount in trust in terms of Companies (Acceptance of Deposits) Rules, 2014 pursuant to section 73 and 74 of the Companies Act, 2013.

f) Note No. 38 to the financial statements, relating to pending confirmation/ reconciliation of balances in respect of trade receivable and payable, advances to suppliers and from customers, consequential impact whereof cannot be ascertained presently.

5. Basis for Qualified Opinion

a) Long outstanding (i) capital advances (Note No. 12) of Rs. 1116.76 Lacs (including amount represented as trade receivable) and (ii) advances to suppliers (Note No. 16) of Rs. 630.75 Lacs (including Rs. 288.61 Lacs recoverable from related party) in respect of which no confirmation/acknowledgement, schedule of delivery and agreements are available and in the absence of initiation of concrete steps for recovery/settlement, non-availability of legal tenable rights and doubt about the inability to pay, besides other factors, equivalent provision for advances doubtful for recovery is necessary considering the magnitude of above factors coupled with considerable delay by these parties, non-creation of such provision is contrary to the requirements of Accounting Standard-4, “Contingencies and Events occurring after the Balance Sheet date”. Consequently, the loss for the year would be impacted by Rs. 1747.51 Lacs.

b) The company has recognized Net deferred tax asset (DTA) of Rs.3921.62. Lacs (including Rs. 1100.87 Lacs for the year) up to 31st March, 2016 on account of unabsorbed depreciation, carried forward business losses and disallowances under Income tax laws (Refer Note No. 11 and 51) based on the future profitability projections made by the management. The company has history of continuous losses for last 5 years and in the absence of virtual certainty supported by convincing evidence along with non-disclosure of nature of evidences supporting its recognition that sufficient taxable income will be available against which such deferred tax assets can be realized in near future, in our opinion, the recognition of deferred tax asset is in contravention to Accounting Standard-22 “Accounting for Taxes on Income” and impacted the loss for the year and financial position to that extent.

Had the impact of our opinion in para 5 a) and b) above been considered,

I) the Loss for the year would have been Rs. 5379.31 Lacs as against the reported Loss of Rs. 2530.93 Lacs and

II) balance in Reserve and Surplus would have been Rs. (7056.15 Lacs) as against the reported Reserve and Surplus of Rs. (1361.45 Lacs).

c) During the year, there are unfilled key positions in the management and non-availability of promoters-cum-directors in India and in view of only one executive director on the Board of the company, Mr. Buddhadeb Duari, independent director, has been authorized to sign the financial statements of the company as at 31st March 2016 for and on behalf of the Board of Directors.

6. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the State of Affairs of the Company as at March 31, 2016;

b) in the case of the Statement of Profit and Loss, of the LOSS 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.

7. Report on Other Legal and Regulatory Requirements

i) As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure-A, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable to the company relevant to this year.

ii) 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 appears from our examination of those books.

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

d) Except for the matters described in Basis for Qualified Opinion paragraphs above, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, as amended.

e) The matters described in Point No. 4 (a), (d), (e) and (f) of Emphasis Matters paragraph and our comments on clause vii) and viii) of Companies (Auditor''s Report) Order, 2016, annexed to this report, in our opinion, may have an adverse effect on the functioning of the company.

f) On the basis of written representations received from the directors as on 31st March 2016 and taken on record by the Board of Directors, none of the directors, are disqualified as on 31st March 2016, from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure-B. Our report expresses a Qualified Opinion on the adequacy and operating effectiveness of the company''s internal financial controls over financial reporting.

h) With respect to the other matters included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to our 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. 28 to the financial statements.

ii. The Company did not have any long-term contracts including derivatives contracts that require provision under any law or accounting standards for which there were any material foreseeable losses.

iii. The company has transferred unclaimed dividend amounting to Rs. 52,503/- for financial year 2007-08 to Investor Education and Protection Fund on 19th November 2015. There has been no delay in transferring amounts to the Investor Education and Protection Fund by the Company.

ANNEXURE - A TO THE AUDITOR’S REPORT TO THE MEMBERS OF GONTERMANN - PEIPERS (INDIA) LIMITED FOR THE YEAR ENDING 31ST MARCH 2016

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

Report on Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act

(i) In respect of its Fixed Assets:

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

(b) According to the information and explanation given to us, fixed assets have been physically verified by the management as at the end of the year; and no material discrepancies were noticed on such verification;

(c) The title deeds of Immovable Properties are held in the name of the company

(ii) In respect of its Inventories:

According to information and explanations given to us, physical verification of inventory has been conducted at reasonable intervals by the internal auditors/ external agency and as explained, no material discrepancies were noticed on such verifications.

(iii) Transactions with Related Parties u/s 189 of the Companies Act, 2013

According to information and explanations given to us and records of the company examined by us, the company has not granted any loans; secured or unsecured; to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

In view of what has been stated above, the question, (a) whether terms and conditions of grant of such loans is prejudicial to the company''s interest, (b) whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular, and (c) whether the amount is overdue, state the total amount overdue for more than ninety days, and whether reasonable steps have been taken by the company for recovery of the principal and interest, do not arise;

(iv) Section 185 and 186 of the Companies Act, 2013

In our opinion and according to the information and explanations given to us, the company has not advanced any loan to any of its directors or to any other person in whom director is interested or has not given any guarantee or has not provided any security in connection with any loan taken by such directors or such other person under section 185.

In our opinion and according to the information and explanations given to us, the company has given any loan or given any guarantee or provided any security or acquired by way of subscription, purchase or otherwise, the securities of any other body corporate, in compliance with the provision of section 186.

(v) Deposits from the Public

According to the information and explanations given to us, company has not accepted deposits from the public under the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.

However, a) the company had received promoters'' contribution in compliance of restructuring package by CDR lenders in foreign currency equivalent to Rs. 91.61 Lacs where promoter (company) has restrained the company to allot shares till finality of formal approval from its board/general meeting and b) credit balances of some of the customers which is outstanding in the normal course of business and pertains to the period prior to 1st April, 2015 which arises due to goods returned by customers for quality issue and company has issued credit notes in lieu of same till replacement is made or liability persist due to part lifting or delay in lifting of goods since production and turnover has been badly affected due to financial crises, accordingly, till such time the company is holding such amount in trust in terms of Companies (Acceptance of Deposits) Rules, 2014 pursuant to section 73 and 74 of the Companies Act, 2013, such balances are money received or held by the company in trust.

(vi) Maintenance of Cost Records

We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013 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 to ascertain whether they are accurate or complete.

(vii) Statutory Dues

(a) According to information and explanations given to us and records of the company examined by us, in our opinion, the company is not regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues to the appropriate authorities during the year and there have been serious delays in a large number of cases. The arrears of outstanding statutory dues as on 31st March 2016 concerned for a period of more than six months from the date they became payable, are given below;

Name of the Statute	Nature of the Dues	Amount (Rs. In Lacs)	Period to which the amount relates	Due Date	Date of Payment
Income tax Act, 1961	Tax Deducted and Collected at Source	3.20	April 2015	07-May-15	Not Paid
		5.07	May 2015	07-Jun-15	Not Paid
		4.07	June 2015	07-Jul-15	Not Paid
		5.28	July 2015	07-Aug-15	Not Paid
		6.14	August 2015	07-Sep-15	Not Paid
West Bengal State tax on Professions, Trades, Callings and Employments Act, 1979	Professional Tax	0.82	July 2015	21-Aug-15	Not Paid
		0.81	August 2015	21-Sep-15	Not Paid
Finance Act, 1994	Service Tax	4.87	March 2015	31-Mar-15	Not Paid
		3.72	April 2015	06-May-15	Not Paid
		4.80	May 2015	06-Jun-15	Not Paid
		2.28	June 2015	06-Jul-15	Not Paid
		2.26	July 2015	06-Aug-15	Not Paid
		5.42	August 2015	06-Sep-15	Not Paid
Employees'' Provident Fund & Misc. Provisions Act, 1952	Employer''s Contribution to Provident Fund	11.49	April 2015	20-May-15	Not Paid
		11.53	May 2015	20-Jun-15	Not Paid
		11.87	June 2015	20-Jul-15	Not Paid
		12.15	July 2015	20-Aug-15	Not Paid
		12.08	August 2015	20-Sep-15	Not Paid
Grand Total		107.89

b) According to information and explanations given to us, following disputed demands of income tax or sales tax or service tax or duty of excise have not been deposited, the details of disputed dues are:

Nature of the dues	Amount (Rs. in Lacs)	Period to which amount relates	Forum where dispute is pending
Excise Duty	209.09	1975 to 1986	Hon''ble High Court Calcutta
	4.66	1993-1994	Tribunal (Central Excise)
	1.39	2002-2003	Joint Commissioner (Central Excise)
	8.60	1998-1999	Tribunal (Central Excise)
	2.02	2007-2008	Tribunal (Central Excise)
	2.09	2006-2007	Tribunal (Central Excise)
	5.68	2007-2008	Tribunal (Central Excise)
	4.57	2008-2009	Tribunal (Central Excise)
	0.96	2008-2009	Tribunal (Central Excise)
	1.39	2007-2008	Tribunal (Central Excise)
	0.31	2008-2009	Tribunal (Central Excise)
	6.31	2008-2009	Tribunal (Central Excise)
	48.00	2011-2012	Commissioner (Appeal
	92.26	upto 1977	Hon''ble High Court Calcutta
Sales Tax	34.08	2007-2008	Revision Board of Commercial Tax
	84.82	2009-2010	Revision Board of Commercial Tax
	21.38	2010-2011	Revision Board of Commercial Tax
	9.91	2011-2012	Revision Board of Commercial Tax
	239.27	1994-1995	Hon''ble High Court Calcutta
	93.36	1994-1995	Hon''ble High Court Calcutta
Custom Duty	1.50	1997-1998	Hon''ble High Court Calcutta
Income Tax	12.41	2007-08 to 2014-15	TDS Officer
	177	A.Y. 1998-1999	Hon''ble High Court
	1539	A.Y. 2000-2001	Hon''ble High Court
Service Tax	11.17	2006-07 to 2008-09	Tribunal ( Central Excise )
	3.11	2011-2012	Commissioner (Central Excise)
	1.26	2010-11	Tribunal (Central Excise)
	85.57	2004-05 to 2007-08	Commissioner Appeal (Central Excise)
Total	2701.20

(viii) Repayment of dues of Financial Institutions, Banks, Government, Debentures Holders Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the company has defaulted in repayment of principal and interest to banks and the default is continuing throughout the year.

Based upon examination of the books of account and related records and according to the information and explanations given to us, 61 instances of delays were noted in repayment of principal on term loans, WCTL (Working Capital Term Loan) and FITL (Funded Interest Term Loan) to the banks ranging from 50 days to 275 days with amounts of default varying from Rs. 2.13 Lacs to Rs. 128.97 Lacs and 178 instances of delays were noted in repayment of interest thereon to the banks ranging from 19 days to 336 days with amounts of default varying from Rs. 0.26 Lacs to Rs. 34.89 Lacs (Refer Footnote 3 under Note No. 4A).

As on the Balance Sheet date, there is a default of Rs. 966.36 Lacs on account of principal and Rs. 733.48 Lacs on account of interest, the details are given below:

Period of Default	Principal (Rs. in Lacs)	Interest (Rs. in Lacs)
Less than 30 days	296.85	79.73
31 days to 60 days	-	137.05
61 days to 90 days	-	-
91 days and above	669.51	516.70
Total	966.36	733.48

Working capital facilities from banks generally remain overdrawn and the default is continuing throughout the year. As on the balance sheet date, there is a default of Rs. 915.07 Lacs on account of overdrawn amount and default of Rs. 227.00 Lacs on account of delay in interest.

The Company did not have any outstanding debentures or dues of loan or borrowings to the financial institutions or government during the year.

(ix) Initial Public Offer or Further Public Offer

According to information and explanations given to us, the company has not raised moneys by way of initial public offer or further public offer (including debt instruments) during the year.

(x) Fraud

During the course of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instances of fraud by the company, noticed or reported during the year under audit, nor have we been informed of any such case by the management of the company.

(xi) Managerial Remuneration

No managerial remuneration has been paid to any managerial person, accordingly, the requirements of complying with section 197 and 198 read with Schedule-V of the Companies Act, 2013, does not arise.

(xii) Nidhi Companies

The company is not a Nidhi company hence the question is not applicable.

(xiii) Compliance and Disclosure of Related Party Transactions

According to information and explanations given to us and records examined by us, the transactions with related parties are in compliance with sections 177 and 188 of Companies Act, 2013 and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) Allotment of Shares

According to information and explanations given to us and records of the company examined by us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and consequently the questions of complying with the requirements of section 42 of the Companies Act, 2013, and utilization of amount raised for the purposes for which it was raised, do not arise.

(xv) Non-Cash transactions

According to information and explanations given to us, the company has not entered into any non-cash transactions with directors or persons connected with him and accordingly the question of compliance of the provisions of section 192 of Companies Act, 2013 does not arise.

(xvi) Registration with RBI

The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 and accordingly, the question of obtaining registration does not arise.

ANNEXURE - B TO THE AUDITOR''S REPORT TO THE MEMBERS OF GONTERMANN - PEIPERS (INDIA) LIMITED FOR

THE YEAR ENDING 31ST MARCH 2016

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

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

1. We have audited the internal financial controls over financial reporting of Gontermann - Peipers (India) Limited (CIN: L27106WB1966PLC101410) (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

2. Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

3. Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, to the extent applicable to an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion on the Company''s internal financial controls system over financial reporting.

4. Meaning of Internal Financial Controls over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting & the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

5. Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

6. Qualified Opinion on adequacy (and therefore operating effectiveness) of Internal Financial Controls over Financial Reporting

According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31, 2016:

a) The Company did not have an appropriate internal control system for obtaining periodic balance confirmations of trade receivables, trade payables and advances to suppliers and from customers which could potentially impact the financial position and operating statement.

b) The Company did not have an appropriate internal control system for procurement, recording and consumption of inventory (raw material), re-order level and proper identification of surplus, slow moving and non-moving items of inventory which could potentially impact the financial position and operating statement.

c) The Company did not have an appropriate internal control system for control over information technology including SAP particularly relating to SAP support (including AMC of servers and UPS), non-availability of functional consultants for SAP and need of giving SAP training to un-trained staff which could potentially impact the company’s internal controls over book keeping, book closure and financial reporting.

A ''material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company''s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 financial statements of the Company, and these material weaknesses do not affect our opinion on the financial statements of the Company.

7. Qualified Opinion on operating effectiveness of Internal Financial Controls over Financial Reporting and unmodified opinion on adequacy of such controls

According to the information and explanations given to me and based on my audit, the following material weaknesses have been identified in the operating effectiveness of the Company''s internal financial controls over financial reporting as at March 31, 2016:

a) The Company’s internal financial controls over effective monitoring of action points and internal audit recommendations which could potentially result in rendering the system of internal controls as less effective.

A ''material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company''s annual or interim financial statements will not be prevented or detected on a timely basis.

In our opinion, the Company has, in all material respects, maintained adequate internal financial controls over financial reporting as of March 31, 2016, based on, for example, the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India, and except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company''s internal financial controls over financial reporting were operating effectively as of March 31, 2016.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in my audit of the March 31, 2016 financial statements of the Company, and these material weaknesses do not affect my opinion on the standalone financial statements of the Company.

For V. Malik & Associates

Chartered Accountants

ICAI Firm''s Reg. No. 000155N

Vipin Malik

Place of Signing: New Delhi (Proprietor)

Date: 20th May, 2016 Membership No. 080468

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Mar 31, 2015

We have audited the accompanying financial statements of GONTERMANN-PEIPERS (INDIA) LIMITED ("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 Company's Board of Directors is responsible for the matters 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 the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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 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 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 control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 financial statements.

Emphasis Matters

Without qualifying our opinion, we draw attention to the following notes to the financial statements:

a) Note No. 30 to the financial statements, relating to remuneration paid in earlier years to the Ex Managing Director of the Company, in excess of the limits prescribed under section 198 read with Schedule XIII to the Act and consequent initiation of recovery process of such excess remuneration after rejection of application u/s 309(5B) of the Companies Act, 1956 by the Central Government.

b) Note No. 31 to the financial statements, wherein as explained, Corporate Debt Restructuring (CDR) Scheme is effective from 1st January, 2012. The outstanding liabilities of the company have been substantially restructured under the aegis of CDR Scheme, which extends till 2021 and stipulation relating to creation of pari-passu charge on the immovable assets of the company is pending for which NOC for ceding first/second charge on the fixed assets of the company has been obtained from the existing charge holder so as to execute necessary legal documents but NDC has not yet been obtained.

c) Note No. 32 to the financial statements, relating to the Scheme of Amalgamation, the accounting treatment laid out in the scheme and consequential adjustments that would arise will be dealt by the company in the financial statements, upon effectiveness of the scheme.

d) Note No. 33 to the financial statements, which indicates the basis and factors for erosion of net worth of the company and position of accumulated losses in excess of net worth of the company. The company has incurred a net cash loss during the current year and in the previous year(s) and the company's current liabilities exceeded its current assets as at the balance sheet date and the company has defaulted in repayment of interest and principal on borrowings. This conditions along with other matters set forth in the above referred note, indicates that the existence of material uncertainty that casts significant doubt about the company's ability to continue as a going concern. However, based upon management's perspective of improved performance and financial position on account of expected enhancement of working capital limits/term loans from bank, infusion of promoter's contribution, diversification in business activities and synergy benefits on amalgamation after necessary approval from High Court and its implementation, the financial statements of the company have been prepared by the management on a going concern basis.

e) Note No. 34 to the financial statements, relating to non-confirmation and reconciliation of most of the parties relating to trade receivable and payable, advances to suppliers and from customers and its consequential impact on the financial statement.

f) The Board of Directors has authorized Mr. Dwijen Lahiri, Whole Time Director and Prof. Manoj Kumar Mitra, Independent Director of the company to sign the financial statements of the company as at 31st March, 2015 for and on behalf of the Board of Directors as the Managing Director is not available on medical grounds since considerable period.

Basis for Qualified Opinion

a) Capital Advances (Note No. 12) includes long outstanding advances to the tune of Rs. 1166.82 Lacs (Including amount represented as trade receivable) and Advances to Suppliers (Note No. 16- Other Loans & Advances) includes long outstanding advances to the tune of Rs. 630.75 Lacs in respect of which no Confirmation/ Acknowledgement/ Schedule of delivery was available, the consequential revenue impact, if any is not ascertainable. Accordingly, provision for advances doubtful for recovery/ adjustment is necessary and non-creation of such provision is contrary to the requirements of Accounting Standard-4, "Contingencies and Events occurring after the Balance Sheet date".

b) The company has recognized Net deferred tax asset (DTA) of Rs. 2820.74 Lacs (including Rs 1059.28 Lacs for the period) up to 31st March, 2015 on account of unabsorbed depreciation, carried forward business losses and disallowances under Income Tax laws (Refer Note No. 11 and 45) based on the future profitability projections made by the management. The company has history of recent losses and in the absence of virtual certainty supported by convincing evidence to the fact that sufficient taxable income will be available against which such deferred tax assets can be realized and also non- disclosure of its nature, in our opinion, the recognition of deferred tax asset is in contravention to Accounting Standard- 22 " Accounting for Taxes on Income".

Had the impact of item stated above been considered, the loss for the year would have been Rs. 4620.66 Lacs (after adjusting deferred tax assets of Rs.1445.82 Lacs recognized upto 31st March, 2014) as against the reported loss of Rs.2115.56 Lacs and balance in Reserve and Surplus would have been Rs. (1522.44) Lacs as against the reported Reserve and Surplus of Rs.1298.30 Lacs.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

b) in the case of the Statement of Profit and Loss, of the LOSS 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, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the annexure a statement on the matters specified in paragraphs 3 of the Order to the extent applicable to the company relevant to this year.

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 appears from our examination of those books.

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

d) Except for the matters described in Basis for Qualified Opinion paragraphs above, in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

f) With respect to the other matters included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit & Auditors) Rules, 2014, in our opinion and to our 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. 28 to the financial statement.

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

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

ANNEXURE TO THE AUDITOR'S REPORT TO THE MEMBERS OF GONTERMANN-PEIPERS (INDIA) LIMITED FOR THE YEAR ENDING 31ST MARCH 2015

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

(i) 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 available information.

(b) As explained to us, the Company has physically verified certain assets during the year in accordance with a programmer of verification, which in our opinion provides for physical verification of fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories:

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

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

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

(iii) Transactions with parties' u/s 189 of the Companies Act, 2013

a) The company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act. Hence the provisions of clause (iii) (a), (b) of paragraph 3 are not applicable to the Company. The company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act.

b) In view of what has been stated in para (iii) clause (a) above, the question of receipt/repayment of principal amount and interest thereof does not arise.

c) In view of what has been stated in para (iii) clause (a) above, the question of overdue amount more than rupees one lakh and reasonable steps for the recovery of principal amount and interest thereof does not arise.

(iv) Internal Control

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 purchase of inventory and fixed assets and for the sale of goods and services

(v) Deposits from the public

In our opinion and according to the information and explanations given to us, company has not accepted deposits from the public, the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under with regard to the deposits accepted from the public are not applicable.

(vi) Maintenance of Cost records

We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under sub-section (1) of section 148 of the Companies Act and are of the opinion that prima- facie, the prescribed accounts and records have been maintained. We have not, however made a detailed examination of the records to ascertain whether they are accurate or complete.

(vii) Statutory dues

a) According to information and explanations given to us and records of the company examined by us, in our opinion, the company is not regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales-tax, Wealth tax, Custom Duty, Excise Duty, Cess Duty, Cess and other statutory dues with the appropriate authorities during the year.

b) According to information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31st March 2015 for a period of more than six months from the date they became payable.

c) According to information and explanations given to us, following disputed demands have not been deposited, the details of disputed dues are:

c) According to information and explanations given to us, following disputed demands have not been deposited, the details of disputed dues are:

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

Excise Duty 209.09 1975 to 1986 Hon'ble High Court Calcutta

4.66 1993-1994 Tribunal (Central Excise) 1.39 2002-2003 Joint Commissioner (Central Excise)

8.60 1998-1999 Commissioner Appeal (Central Excise)

2.02 2007-2008 Commissioner Appeal (Central Excise)

2.09 2006-2007 CESTAT

5.68 2007-2008 CESTAT

4.57 2008-2009 CESTAT

0.96 2008-2009 Commissioner Appeal (Central Excise)

1.39 2007-2008 CESTAT

0.31 2008-2009 Commissioner Appeal (Central Excise)

6.31 2008-2009 Commissioner Appeal

92.26 up to 1977 Hon'ble High Court Calcutta

Sales Tax 34.08 2007-2008 Revision Board of Commercial Tax

84.82 2009-2010 Additional Commissioner

0.82 2010-2011 Senior Joint Commissioner of Sales Tax

20.56 2010-2011 Senior Joint Commissioner of Sales Tax

19.98 2011-12 Additional Commissioner

239.27 1994-1995 Hon'ble High Court Calcutta

93.36 2001-2002 Hon'ble High Court Calcutta

Custom 1.50 1997-1998 Hon'ble High Court Calcutta

Income Tax 177 A.Y.1998- 1999 Hon'ble High Court

1539 A.Y. 2000- 2001 Hon'ble High Court

Service Tax 11.17 2006-07 to 2008-09 Tribunal ( Central Excise )

5.38 2009-2010 Commissioner Appeal Central Excise

85.57 2004-05 to 2007-08 Commissioner Appeal Central Excise

d) In our opinion and according to the information and explanations given to us, there is no amount which required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act and rules made hereunder.

viii) Accumulated losses

The accumulated losses of the Company at the end of the financial year have exceeded the net worth of the Company. The Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

ix) Repayment of dues of financial institution or bank etc.

Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the company has defaulted in repayment of term loan dues to banks and the default is continuing throughout the year towards repayment of principal and interest. As on the Balance Sheet date, there is a default of Rs. 247.36 Lacs on account of principal and Rs. 218.18 Lacs on account of interest, the details are given below:

Period of Default Principal Interest (Rs. in Lacs) (Rs. in Lacs)

Less than 30 days 247.36 81.60

31 days to 60 days 0.00 72.76

61 days above 0.00 63.82

Total 247.36 218.18

Working capital loan from banks include Rs. 1206.20 Lacs continuing default towards repayment of working capital facilities (including interest default of Rs. 46.63 lacs, period of default 5 days). The Company did not have any outstanding debentures or dues to the financial institutions during the year.

(x) Loans and Advances

In our opinion and according to the records of the Company examined by us, the company has not given any guarantee for loans taken by others from bank or financial institutions where the terms and conditions are prejudicial to the interest of the company.

(xi) In our opinion and according to the records of the Company examined by us, the term loans were applied for the purpose for which the loans were obtained.

(xii) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during course of our audit, nor we have been informed of such case by the management.

For V. Malik & Associates Chartered Accountants

ICAI Firm's Reg. No. 000155N

Vipin Malik

Place: Camp Kolkata/New Delhi (Proprietor)

Date: 29th May, 2015 Membership No. 080468

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Mar 31, 2014

We have audited the accompanying financial statements of Gontermann-Peipers (India) Limited which comprise the Balance Sheet as at March 31,2014, 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 is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting standards notified under the Companies Act, 1956 (''the act'') read with the General Circular 15/2013 dated 13th 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.

Auditor''s 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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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 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 Statement of Profit and Loss, of the loss 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.

Emphasis of Matter

We draw attention to the following notes to the financial statements:

Note No. 30 to the financial statements, relating to remuneration paid in earlier years to the Ex -Managing Director of the Company, in excess of the limits prescribed under section 198 read with Schedule XIII to the Act.

Note No. 31 to the financial statements, wherein as explained, Corporate Debt Restructuring (CDR) Scheme is effective from 1st January, 2012. The outstanding liabilities of the company have been substantially restructured under the aegis of CDR Scheme, which extends till 2021.

Note No. 34 to the financial statements, relating to the Scheme of Amalgamation approved by the board, the accounting treatment laid out in the Scheme and consequential adjustments that would arise will be dealt with by the Company in the financial statements, upon effectiveness of the Scheme.

Our opinion is not qualified 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 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.

Attention is drawn to the fact that:

a) The outstanding advances for capital goods includes long outstanding advances to the tune of Rs.297.00 Lacs and advances to suppliers includes Rs. 446.61 Lacs in respect of which no confirmation / schedule of delivery was available, the consequential revenue impact, if any is not ascertainable. Accordingly, it was felt that the creation of no provision in respect of doubtful /advances is contrary to the requirements of AS 4.

b) Note No. (11) Regarding recognition of Net Deferred Tax Asset (DTA) of Rs.1445.82 lacs (including Rs (17.33) Lacs for the period) recognized up to 31st March, 2014 based on the future profitability projections made by the management. However, we are unable to express any opinion on the virtual certainty of achieving these projections as required by Accounting Standard 22 " Accounting for Taxes on Income" and consequential impact, if any, of the recognition on such deferred tax asset.

Had the impact of item stated above been considered, the loss for the year would have been Rs.2984.20 lacs (after adjusting deferred tax assets of Rs.1463.15 lacs recognized upto 31st March, 2013) as against the reported loss of Rs.1538.38 lacs and balance in Reserve and Surplus would have been Rs. 1586.66 Lacs as against the reported Reserve and Surplus of Rs. 3032.48 lacs.

2. As required by section 227(3) of the Act, we report that except for the effect of the observation in para 1 above :

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 notified under the Companies Act, 1956 (''the act'') 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 and;

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

ANNEXURE TO THE AUDITOR''S REPORT TO THE MEMBERS OF GONTERMANN-PEIPERS (INDIA) LIMITED FOR THE YEAR ENDED 31ST MARCH, 2014.

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

(i) The nature of the Company''s business/activities during the year is such that clause (xiii) and (xiv) of the paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the year ended 31st March 2014.

(ii) In respect of its fixed Assets:-

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

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

(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposals during the year.

(iii) In respect of its inventories:-

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

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

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

(iv) (a) As informed to us, the Company has not granted or taken any secured or unsecured loan to/from companies, firms or other parties listed in 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, the transactions made in pursuance of contracts and arrangements referred to in (iv)(a) above and exceeding the value of Rs. 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(v) 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, for the purchase of inventory and fixed assets and for the sale of goods.

(vi) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act 1956, to the best of our knowledge and belief and according to the information and explanations given to us, there are no transactions that need to be entered in the register.

(vii) As informed to us, the company has not accepted any deposits from the public within the purview of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

(ix) We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima- facie, the prescribed accounts and records have been maintained. We have not, however made a detailed examination of the records to ascertain whether they are accurate or complete.

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

a. The company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Sales-tax, Wealth tax, Custom Duty, Excise Duty, Cess Duty, Cess and other statutory dues with the appropriate authorities during the year.

b. According to information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31st March 2014 for a period of more than six months from the date they became payable except for Service Tax Rs. 1.05 lacs, Central Sales Tax Rs.8.77 lacs and ESI aggregating to Rs. 2.04 lacs.

c. Disputed dues in respect of :

Nature of the dues Amount (Rs.in Lacs) Period to which amount relates

Excise Duty 209.09 1975 to 1986

4.66 1993-1994

1.39 2002-2003

8.60 1998-1999

2.02 2007-2008

2.09 2006-2007

5.68 2007-2008

4.57 2008-2009

0.96 2008-2009

1.39 2007-2008

0.31 2008-2009

6.31 2008-2009

Sales Tax 34.08 2007-2008

84.82 2009-2010

0.82 2010-2011

20.56 2010-2011

239.27 1994-1995

93.36 2001-2002

Custom Duty 1.50 1997-1998

Income Tax 177.00 A.Y.1998-1999

1539.00 A.Y. 2000-2001

Service Tax 11.17 2006-2007 to 2008-2009

5.38 2009-2010

85.57 2004-2005 to 2007-2008



Nature of the Dues Forum where dispute is pending

Excise Duty Hon''ble High Court Kolkata

Tribunal (Central Excise)

Joint Commissioner (Central Excise)

Commissioner Appeal (Central Excise)

Commissioner Appeal (Central Excise)

CESTAT

CESTAT

CESTAT

Commissioner Appeal (Central Excise)

CESTAT

Commissioner Appeal (Central Excise)

Commissioner Appeal

Sales Tax Revision Board of Commercial Tax

Additional Commissioner

Senior Joint Commissioner of Sales Tax

Senior Joint Commissioner of Sales Tax

Hon''ble High Court Kolkata

Hon''ble High Court Kolkata

Custom duty Hon''ble High Court Kolkata

Income Tax Hon''ble High Court

Hon''ble High Court

Service Tax Tribunal (Central Excise)

Commissioner Appeal (Central Excise)

Commissioner Appeal (Central Excise)

Have not been deposited, since the matters are pending before relevant Appellate Authorities.

(xii) The accumulated losses of the Company at the end of the financial year are less than fifty per cent of its net worth. The Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xiii) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has defaulted in repayment of term loan dues to banks during the year as given below :

Period of Default Principal (Rs.In lacs) Interest (Rs. In lacs)

Less than 30 days 83.54 84.56

31 days to 60 days 0.00 15.57

Total 83.54 100.12

Working capital loan from banks include Rs.854.42 lacs continuing default towards repayment of working capital facilities, (including interest default of Rs.58.04 lacs, period of default 34 days).

The Company did not have any outstanding debentures or dues to the financial institutions during the year.

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

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

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were prima facie applied by the company during the year for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that short term funds to the extent of Rs. 5.73 Crores have been used in funding of a portion of losses.

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

(xix) The Company has not raised any money by public issues during the year.

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

For V. MALIK & ASSOCIATES Chartered Accountants Firm Registration No: 000155N

VIPIN MALIK Camp : Kolkata/New Delhi Proprietor Dated : 29th May, 2014 Membership No. 80468

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Mar 31, 2013

Report on the financial statements

We have audited the accompanying financial statements of Gontermann-Peipers (India) Limited which comprise the Balance Sheet as at March 31, 2013, 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

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.

Auditor''s 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 the management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

(b) in the case of the Statement of Profit and Loss, of the loss 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.

Attention is drawn to the fact that:

a) The outstanding advance for capital goods includes long outstanding advances to the tune of Rs.197.00 Lacs and advances to suppliers includes Rs.148.92 lacs in respect of which no confirmation/ schedule of delivery was available, the consequential revenue impact, if any is not ascertainable.

b) Note No. (11) Regarding recognition of net deferred tax asset (DTA) of Rs.1463.15 lacs (including Rs.1112.21 Lacs for the period) recognized up to 31st March, 2013 based on the future profitability projections made by the management. However, we are unable to express any opinion on the virtual certainty of achieving these projections as required by Accounting Standard 22 " Accounting for Taxes on Income" and consequential impact, if any, of the recognition on such deferred tax asset.

Had the impact of item stated above been considered, the loss for the year would have been Rs.3771.57 lacs (after adjusting deferred tax assets of Rs.350.94 lacs recognized upto 31st March, 2012) as against the reported loss of Rs.3420.63 lacs and balance in Reserve and Surplus would have been Rs.3269.74 Lacs as against the reported Reserve and Surplus of Rs.4732.89 lacs.

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 sub-section (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.

ANNEXURE TO THE AUDITOR''S REPORT TO THE MEMBERS OF GONTERMANN- PEIPERS (INDIA) LIMITED FOR THE YEAR ENDING 31ST MARCH 2013.

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

(i) The nature of the Company''s business/activities during the year is such that clause (xiii) and (xiv) of the paragraph 4 of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company for the year ended 31st March 2013.

(ii) In respect of its fixed Assets:

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

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

(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposals during the year.

(iii) In respect of its inventories:- (a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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

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

(iv) As informed to us, the Company has not granted or taken any secured or unsecured loan to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures 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.

(vi) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act 1956, to the best of our knowledge and belief and according to the information and explanations given to us, there are no transactions that need to be entered in the register.

(vii) As informed to us, the company has not accepted any deposits from the public within the purview of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

(ix) We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima- facie, the prescribed accounts and records have been maintained. We have not, however made a detailed examination of the records to ascertain whether they are accurate or complete.

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

The company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Sales-tax, Wealth tax, Custom Duty, Excise Duty, Cess Duty, cess and other statutory dues with the appropriate authorities during the year.

(xii) The Company does not have accumulated losses at the end of the financial year and it has incurred cash losses in the current and immediately preceding financial year.

(xiii) The defaults of the company towards repayment of the dues to banks has been adjusted upon reschedulement of loans in terms of the scheme for Corporate Debt Restructuring sanctioned, the effect of which has been given in the books of accounts during the period under review.

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

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

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were prima facie applied by the company during the year for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that short term funds to the extent of Rs. 29.00 Crores have been used in funding of a portion of losses.

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

(xix) The Company has not raised any money by public issues during the year.

(xx) To the best of our knowledge and according to information and explanations given to us, no fraud on or by the Company was noticed or reported during the year. For V. MALIK & ASSOCIATES

Chartered Accountants

Firm Registration No: 000155N

VIPIN MALIK

Camp : Kolkata/New Delhi Proprietor

Dated : 30th May, 2013 Membership No. 80468

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of Gontermann-Peipers (India) Limited as at 31st March, 2012 and also the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

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

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

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

(ii) In our opinion, subject to accounting policy as stated in Annexure 1 as (i) regarding non-accounting of certain income/expenses on accrual basis, proper books of account, as required by law, have been kept by the company so far as appears from our examination of those books;

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

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

(v) On the basis of written representations received from the directors as on 31st March 2012, we report that none of the director is disqualified as on 31st March 2012 from being appointed as director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act 1956. As regards institutional nominee directors, they are exempted from the provisions of Section 274(1 )(g) in view of general circular issued by Department of Company Affairs.

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

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

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT TO THE MEMBERS OF GONTERMANN-PEIPERS (INDIA) LIMITED FOR THE YEAR ENDING 31ST MARCH 2012

(i) The nature of the Company's business/activities during the year is such that clause (xiii) and (xiv) of the paragraph 4 of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company for the year ended 31st March, 2012.

(ii) In respect of its Fixed Assets :

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

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

(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposals during the year.

(iii) In respect of its inventories:-

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

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

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

(iv) As informed to us, the Company has not granted or taken any secured or unsecured loan to/from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures 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.

(vi) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act 1956, to the best of our knowledge and belief and according to the information and explanations given to us, there are no transactions that need to be entered in the register.

(vii) As informed to us, the company has not accepted any deposits from the public within the purview of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

(ix) We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima- facie, the prescribed accounts and records have been maintained. We have not, however made a detailed examination of the records to ascertain whether they are accurate or complete.

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

a. The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales-tax, Wealth tax, Custom Duty, Excise Duty, Cess Duty, cess and other statutory dues with the appropriate authorities during the year.

b. According to information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2012 for a period of more than six months from the date they became payable except for Gratuity aggregating to Rs.107.67 Lacs and ESI Rs.1.21 Lacs.

c. Disputed dues in respect of

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

Excise Duty 209.09 1975 to 1986 Hon'ble Calcutta High Court

4.66 1993-1994 Tribunal (Central Excise)

1.39 2002-2003 Joint Commissioner (Central Excise)

8.60 1998-1999 Commissioner Appeal (Central Excise)

2.02 2007-2008 Commissioner Appeal (Central Excise)

2.09 2006-2007 Commissioner Appeal (Central Excise)

5.68 2007-2008 Commissioner Appeal (Central Excise)

4.57 2008-2009 Commissioner Appeal (Central Excise)

0.96 2008-2009 Commissioner Appeal (Central Excise)

0.31 2007-2008 Commissioner Appeal (Central Excise)

6.31 2008-2009 Dy. Commissioner Excise

Sales Tax 34.08 2007-2008 Revision Board of Commercial Tax

15.28 2008-2009 Dy Commissioner of Commercial Tax

Service Tax 11.17 2006-2007 to 2008-2009 Tribunal (Central Excise)

5.38 2009-2010 Commissioner Appeal (Central Excise)

85.57 2004-2005 to 2007-2008 Commissioner Appeal (Central Excise)

have not been deposited since the matters are pending before relevant Appellate Authorities.

(xi) The Company does not have accumulated losses as at 31st March, 2012. The Company has incurred cash loss in the current year but has not incurred any cash loss in the immediately preceding financial year.

(xii) Based on our audit procedure and as per information and explanation given by the management, the company has delayed in repayment of dues to domestic financial institutions, banks during the year to the extent of Rs.1213.33 Lacs which includes Rs.558.10 Lacs towards working capital facilities (delay in such repayments for more than 60 days being Rs.535.09 Lacs). Further Rs.794.88 Lacs of such dues were in arrears as on the balance sheet date which includes Rs.371.81 Lacs towards working capital (the dues in arrears for a period more than 60 days being Rs.215.07 Lacs).

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

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

(xv) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were prima facie applied by the company during the year for the purpose for which the loans were obtained.

(xvi) According to the information and explanations given to us and on overall examination of the balance sheet of the company, in our opinion, funds raised on short term basis have not been used for long term investment.

(xvii) The Company has not made any preferential allotment during the year.

(xviii) The Company has not raised any money by public issues during the year.

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

For V. MALIK & ASSOCIATES

Chartered Accountants

Firm Registration No: 000155N

VIPIN MALIK

Camp : Kolkata Proprietor

Dated : 29th May, 2012 Membership No. 80468

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Gontermann-Peipers (India) Limited as at 31st March 2011 and also the Profit and Loss Account and Cash Flow Statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

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

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

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

(ii) In our opinion, subject to Note No.1 (i) on Schedule 18 regarding non-accounting of certain income/expenses on accrual basis, proper books of account, as required by law, have been kept by the company so far as appears from our examination of those books;

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

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

(v) On the basis of written representations received from the Directors as on 31st March 2011, we report that none of the director is disqualified as on 31st March 2011 from being appointed as director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act 1956. As regards institutional nominee directors, they are exempted from the provisions of Section 274 (1) (g) in view of general circular issued by Department of Company Affairs.

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

(i) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2011;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT TO THE MEMBERS OF GONTERMANN-PEIPERS (INDIA) LIMITED FOR THE YEAR ENDING 31ST MARCH 2011

(i) The nature of the Company's business/activities during the year is such that clause (xiii) and (xiv) of the paragraph 4 of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company for the year ended 31st March 2011.

(ii) In respect of its fixed Assets:

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

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

(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposals during the year.

(iii) In respect of its inventories:-

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

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

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

(iv) As informed to us, the Company has not granted or taken any secured or unsecured loan to/from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures 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.

(vi) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act 1956, to the best of our knowledge and belief and according to the information and explanations given to us, there are no transactions that need to be entered in the register.

(vii) As informed to us, the company has not accepted any deposits from the public within the purview of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

(ix) We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima- facie, the prescribed accounts and records have been maintained. We have not, however made a detailed examination of the records to ascertain whether they are accurate or complete.

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

a. The company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Custom Duty, Excise Duty, Cess Duty, cess and other statutory dues with the appropriate authorities during the year.

b. According to information and explanations given to us, no undisputed amount payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31st March 2011 for a period of more than six months from the date they became payable.

c. Disputed dues in respect of

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

Excise Duty 209.09 1975 to 1986 Hon'ble Calcutta High Court

4.66 1993-1994 Tribunal (Central Excise")

139 2002-2003 Joint Commissioner (Central Excise)

8.60 1998-1999 Commissioner Appeal ( Central Excise) 2.00 2007-2008 Asstt.Commissioner (Central Excise)

2.09 2006-2007 Dy.Commissioner Excise

5.68 2007-2008 Joint Commissioner (Central Excise)

4.57 2008-2009 Joint Commissioner (Central Excise)

0.31 2008-2009 Dy. Commissioner Excise

1.39 2007-2008 Dy.Commissioner Excise

0.96 2008-2009 Dy.Commissioner Excise

4.41 2008-2009 Dy.Commissioner Excise

Sales Tax 209.92 2006-2007 Dy.Commissioner Appeal.

34.13 2007-2008 Dy.Commissioner Appeal.

Service Tax 11.17 2006-2007 to Joint Commissioner 2008-2009 Service Tax 2.78 2009-2010 Joint Commissioner Service Tax

have not been deposited since the matters are pending before relevant Appellate Authorities.

(xi) The company does not have accumulated losses as at 31st March, 2011 and has not incurred cash losses during the financial year covered by our audit or in the immediately preceeding financial year.

(xii) According to information and explanations given to us, the company has not defaulted in repayment of dues to any financial institutions or bank.

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

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

(xv) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were prima facie applied by the company during the year for the purpose for which the loans were obtained.

(xvi) According to the information and explanations given to us and on overall examination of the balance sheet of the company, in our opinion, funds raised on short term basis have not been used for long term investment.

(xvii) The Company has not made any preferential allotment during the year.

(xviii)The Company has not raised any money by public issues during the year.

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



For V. MALIK & ASSOCIATES Chartered Accountants Firm Registration No: 000155N VIPIN MALIK Proprietor Membership No. 80468

Camp : Kolkata Dated : 30th May, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Gontermann-Peipers (India) Limited as at 31st March 2010 and also the Profit and Loss Account and Cash Flow Statement of the company for the year ended on that date annexed thereto. These financial statements are the responsibility of the management of the company. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall 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 Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

(ii) In our opinion, subject to Note No.1 (i) on Schedule 18 regarding non-accounting of certain income/expenses on accrual basis, proper books of account, as required by law, have been kept by the company so far as appears from our examination of those books;

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

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

(v) On the basis of written representations received from the directors as on 31st March 2010, we report that none of the director is disqualified as on 31st March 2010 from being appointed as director in terms of clause (g) of sub section (1) of Section 274 of the Companies Act 1956. As regards institutional nominee directors, they are exempted from the provisions of Section 274 (1) (g) in view of general circular issued by Department of Company Affairs.

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

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

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT TO THE MEMBERS OF GONTERMANN-PEIPERS (INDIA) LIMITED FOR THE YEAR ENDING 31ST MARCH 2010

(i) The nature of the Companys business/activities during the year is such that clause (xiii) and (xiv) of the paragraph 4 of the Companies (Auditors Report) Order, 2003 are not applicable to the Company for the year ended 31st March 2010.

(ii) In respect of its fixed Assets:

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

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

(c) In our opinion and according to the information and explanations given to us, the Company has not made any substantial disposals during the year.

(iii) In respect of its inventories:- (a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

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

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

(iv) As informed to us, the Company has not granted or taken any secured or unsecured loan to/from companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures 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.

(vi) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act 1956, to the best of our knowledge and belief and according to the information and explanations given to us, there are no transactions that need to be entered in the register.

(vii) As informed to us, the company has not accepted any deposits from the public within the purview of Section 58A of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

(ix) We have broadly reviewed the books of accounts maintained by the company pursuant to the order made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima- facie, the prescribed accounts and records have been maintained. We have not, however made a detailed examination of the records to ascertain whether they are accurate or complete.

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

a. The company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales-tax, Wealth tax, Custom Duty, Excise Duty, Cess Duty, cess and other statutory dues with the appropriate authorities during the year.

b. According to information and explanations given to us, no undisputed amount payable in respect of Income tax, Wealth tax, Sales tax, Custom Duty, Excise Duty and cess were in arrears, as at 31st March 2010 for a period of more than six months from the date they became payable.

c. Disputed dues in respect of

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

Excise Duty 209.09 1975 to 1986 Honble Calcutta High Court

4.66 1993-1994 Tribunal (Central Excise)

1.39 2002-2003 Joint Commissioner (Central Excise)

8.60 1998-1999 Commissioner Appeal (Central Excise)

2.00 2007-2008 Asstt. Commissioner (Central Excise)

2.09 2006-2007 Dy. Commissioner Excise

Sales Tax 10.87 1994-1995 Honble Calcutta High Court

209.92 2006-2007 Dy Commissioner Appeal.



have not been deposited since the matters are pending before relevant Appellate Authorities.

(xi) The company does not have accumulated losses as at 31st March, 2010 and has not incurred cash losses during the financial year covered by our audit or in the immediately preceeding financial year.

(xii) According to information and explanations given to us, the company has not defaulted in repayment of dues to any financial institutions or bank

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

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

(xv) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the company were prima facie applied by the company during the year for the purpose for which the loans were obtained.

(xvi) According to the information and explanations given to us and on overall examination of the balance sheet of the company, in our opinion, funds raised on short term basis have not been used for long term investment.

(xvii) The Company has not made any preferential allotment during the year.

(xviii)The Company has not raised any money by public issues during the year.

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

For V. MALIK & ASSOCIATES

Chartered Accountants

Firm Registration No: 000155N

VIPIN MALIK

Camp : Kolkata Proprietor

Dated : 19th May, 2010 Membership No. 80468