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Auditor Report of Grauer & Weil (India) Ltd.

Mar 31, 2015

We have audited the accompanying Standalone Financial Statements of GRAUER & WEIL (INDIA) LIMITED ("the Company"), which comprises the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and the cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit.

We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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 the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Board of Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Emphasis of Matter

We draw attention to:

a. Note No. 1 (r) to the financial statements, indicate that the Company with effect from 1st April, 2014, has charged depreciation based on the revised remaining useful life of the assets, as per the requirements of Schedule II of the Companies Act, 2013. As a result of these changes, the depreciation charge for the year ended 31st March, 2015 is higher by Rs. 461.56 Lacs. Carrying amount of Rs. 219.60 Lacs (net of Deferred Tax Rs. 113.08 Lacs) on account of assets, whose useful lives are already exhausted as on 1st April, 2014 has been adjusted to the opening balance of Reserves and Surplus. The assets and the reserves of the Company are lower by the above amounts.

b. Note No. 27 (M) (i) to the financial statements on non provision for diminution in the value of investments in equity shares of a subsidiary and associates, whose net worth has fully eroded. For reasons explained in the said note, including the subsidiary''s/associates'' business plans & growing prospects, such impairment, if any, is considered to be temporary in nature, upon which, we have placed our reliance and no provision is considered necessary in the accounts of the Company.

Our opinion is not modified in respect of the aforesaid matters.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act we give in the annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

(d) In our opinion, the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27(A) to the financial statements;

ii. The Company has made provision, as required under the applicable law or Accounting Standards, for material foreseeable losses, if any, on long term contracts including derivative contracts.

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

(Referred to in our report of even date to the members of Grauer & Weil (India) Limited as at and for the year ended 31st March, 2015).

i) In respect of its fixed assets:

a) The Company has compiled itemwise lists of all its fixed assets, showing full particulars including quantitative details and location of fixed assets.

b) As explained to us, all the assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion is reasonable, considering the size and nature of its business. We are informed that there are no major discrepancies, as regards plant and machinery and in respect of other assets, discrepancies, if any, will then be dealt with in the accounts once the process of reconciliation is complete.

ii) In respect of its inventories:

a) The inventory, excluding goods in transit has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As regards goods lying with third parties, confirmations have been obtained;

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

c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of its inventory. The discrepancies noticed on verification between the physical stocks and book records have been properly dealt with in the books of account.

iii) a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act during the year. In our opinion, the receipt of the principal amount and interest with respect to loan to a party given in earlier years has been regular.

b) In our opinion, there have been no overdue amounts on the said loans. Accordingly, the provisions of Clause 3(iii)(b) is not applicable.

iv) In our opinion there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventories, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control.

v) The Company has not accepted any deposit from public during the year. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 74 of the Act, read with relevant rules thereunder, with regard to repayment of the deposits accepted before the commencement of the Act.

vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148 (1) of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

vii) a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax,

Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with appropriate authorities, where applicable. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2015 for a period of more than six months from the date they became payable.

b) According to the records of the Company, the dues outstanding of Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and Cess on account of any dispute, are as follows:

Particulars Period to which the amount related

Income Tax 2011-12

1984-85, 1985-86, 1990-91, 1991-92, 1992-93, 1993-94 and 1994-95.

1996- 97 to 2001-02

Excise Duty 2009-10 to 2013-14

1990-91, 1993-94, 1996-97, 1997- 98, 1998-99, 1999-2000, and 2000-01.

Service Tax 2003-04 to 2010-11,2011-12 and 2012-13.

Sales Tax 1998-99, 2003-04, 2005-06, and 2012-13.

Customs Duty 2007-08 and 2008-09

Particulars Forum where the dispute is pending Amount (Rs. In Lacs)

Incomr Tax Commissioner of Income Tax (Appeal) 13.92

Central Excise Gold Appellate Tribunal 20.58

Excise Duty Mumbai High Court 12.94

Commissioner of Excise & Customs (Appeals), 20.89 Chandigarh

Deputy/Assistant Commissioner 11.72

Service Tax Assistant/ Additional Commissioner (Appeal) 107.35

Sales Tax Joint / Deputy Commissioner (Appeal) 25.05

Customs Duty Commissioner of Customs (Import) 35.82

c) On the basis of our examination and according to the information and explanations given to us, there were no delay in transferring the amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

viii) The Company has no accumulated losses at the end of the financial year and has not incurred cash losses, in the current financial year and in the immediate preceding financial year.

ix) The Company has not defaulted in repayment of its dues to banks. The Company does not have any borrowings by way of debentures.

x) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks and financial institutions.

xi) On the basis of the records examined by us we have to state that, the Company has, prima facie, applied the term loans for the purposes for which they were obtained.

xii) On the basis of our examination and according to the information and explanations given to us, no fraud on or by the Company, has been noticed or reported during the year.

For M. M. NISSIM & CO. Chartered Accountants (Firm Reg No. 107122W)

(N. KASHINATH) Partner Membership No. 36490 Mumbai, 29th May, 2015


Mar 31, 2014

We have audited the accompanying Financial Statements of GRAUER & WEIL (INDIA) LIMITED (the ''Company''), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and the 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances 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 by the Act 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 Profit for the year ended on that date; and

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

Emphasis of Matter

We draw attention to Note No. 27 (L) to the accounts on non provision for diminution in the value of investments in equity shares of a subsidiary and associates whose net worth has eroded. For reasons explained in the said note, including the subsidiary''s/associates business plans & growing prospects, such impairment, if any, is considered to be temporary in nature, upon which, we have placed our reliance and no provision is considered necessary in the accounts of the Company.

Our opinion is not qualified in respect of the aforesaid matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 (the ''Act'') we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. Further to our comments referred to in paragraph 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 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

e. On the basis of written representations received from the Directors as on 31st March, 2014 and taken on record by the Board of Directors of the Company and on the basis of examination and records of the Company, we report and certify that none of the Director is disqualified as on 31st March, 2014 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Act, on the said date.

ANNEXURE TO THE AUDITORS'' REPORT (Referred to in our report of even date to the Members of Grauer & Weil (India) Limited as at and for the year ended 31st March, 2014)

i. In respect of its fixed assets:

(a) The Company has compiled itemwise lists of all its fixed assets, showing full particulars including quantitative details and location of fixed assets.

(b) As explained to us, all the assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion is reasonable, considering the size and nature of its business. We are informed that there are no major discrepancies, as regards Plant and Machinery and in respect of other assets, discrepancies, if any, will then be dealt with in the accounts once the process of reconciliation is complete.

(c) The Company has not disposed of any substantial part of its fixed assets so as to affect its going concern. ii. In respect of its inventories:

(a) The inventory, excluding goods in transit has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As regards goods lying with third parties, confirmations have been obtained.

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

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of its inventory. The discrepancies noticed on verification between the physical stocks and book records have been properly dealt with in the books of account.

iii. (a) The Company has during the year granted unsecured loans to a Company listed in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 50.22 Lacs (Previous Year Rs. 50.00 Lacs) and the year end balance of loans granted to such party was Rs. 50.00 Lacs (Previous Year Rs. 50.00 Lacs).

(b) In our opinion, the rate of interest and other terms and conditions on which unsecured loan has been granted to a Company listed in the register maintained under Section 301 of the Companies Act, 1956 is not, prima facie, prejudicial to the interest of the Company.

(c) The Company has repaid the principal amounts as stipulated and have been regular in the payment of interest where applicable.

(d) There is no overdue amount of loan granted to a Company listed in the register maintained under Section 301 of the Companies Act, 1956.

(e) The Company has taken unsecured loans from 5 Companies and a Director, covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 533.50 Lacs (Previous Year Rs. 533.50 Lacs) and the year end balance of such loans taken was Rs. 390.50 Lacs (Previous Year Rs. 533.50 Lacs).

(f) The rate of interest and other terms and conditions of unsecured loans taken by the Company, are not prima facie prejudicial to the interest of the Company.

(g) The Company has repaid the principal amounts as stipulated and has been regular in the payment of interest, where applicable.

iv. In our opinion, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. (a) Based on the audit procedure applied by us and according to the information, explanations and representation given to us, we are of the opinion that particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered in the register maintained under that Section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are prima- facie, reasonable having regard to prevailing market prices at that time except that in respect of certain specialised services availed no comparison of prices could be made as we were informed that there are no prevailing market prices.

vi. The Company has complied with the provisions of Section 58A, 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule, 1975 with regards to deposits accepted from the public. We are informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in respect of aforesaid deposits.

vii. The Company does not have a formal internal audit system. However, in our opinion, there are adequate internal control procedures commensurate with the size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under Section 209(1) (d) of the Companies Act, 1956 in respect of the Company''s products to which the said rules are applicable and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have however, not made a detailed examination of the records with a view to determining whether they are accurate, or complete.

ix. (a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Statutory dues with the appropriate authorities, where applicable. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, Excise Duty, Sales Tax and Income Tax which have not been deposited on account of any disputes, are as detailed below:

Particulars Period to which the amount related Forum where the dispute is pending Amount (Rs. In Lacs)

Income Tax 2011-12 Commissioner of Income Tax (Appeal) 4.36

Excise Duty 1984-85, 1985-86, 1990-91,1991-92, 1992-93, Central Excise Gold Appellate Tribunal 20.58 1993-94 and 1994-95.

1990-91, 1993-94, 1996-97, 1997-98, 1998-99, Deputy/Assistant Commissioner 11.72 1999-2000 and 2000-01.

Service Tax 2003-04 to 2010-11, 2011-12 and 2012-13. Assistant/ Addl. Commissioner (Appeal) 160.20

Sales Tax 1998-99, 2003-04, 2005-06, 2009-10 and 2012-13. Commissioner (Appeal)/Financial 27.87

Commissioner

Customs Duty 2007-08 and 2008-09 Commissioner of Customs (Import) 35.82

x. The Company has no accumulated losses at the end of the financial year and has not incurred cash losses, in the current financial year and in the immediately preceding financial year.

xi. The Company has not defaulted in repayment of its dues to banks. The Company has not borrowed by way of debentures and from Financial Institutions.

xii. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities.

xiii. The Company is not a chit fund or nidhi or mutual benefit fund or society and hence the provisions of Clauses 4(xiii) (a) to (d) of the Order, are not applicable to the Company.

xiv. The Company is not dealing or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of Clause 4 (xiv) of the Order are not applicable to the Company.

xv. Based on our examination of the records and according to the information and explanations given to us, the Company has not given any corporate guarantee for loans taken by others from any bank or financial institution.

xvi. On the basis of the records examined by us and relying on the information compiled by the Company for co-relating the funds raised to the end use of the terms loans, we have to state that, the Company has, prima-facie, applied the term loans for the purpose for which they were raised.

xvii. According to the information and explanations, given to us and on an overall examination, of the Financial Statements of the Company, we are of the opinion that, prima-facie no funds raised on short term basis have been used for long term investments.

xviii. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

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

xx. The Company has not raised any money through a public issue, during the year.

xxi. According to the information and explanations given to us and to the best of our knowledge and belief, no fraud on or by the Company, has been noticed or reported by the Company during the year.

For M. M. NISSIM AND CO. Chartered Accountants (Firm Reg No. 107122W)

N. KASHINATH

Partner

Membership No. 36490

Mumbai

30th May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying Financial Statements of GRAUER & WEIL (INDIA) LIMITED (the ‘Company''), which comprise the Balance Sheet as at March, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and the 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 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 by the Act 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 Statement of Profit and Loss, of the Profit for the year ended on that date; and

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

Emphasis of Matter

We draw attention to Note no. 27 (L) to the accounts on non provision for diminution in the value of investments relating to investments in equity shares of a subsidiary and associates. The management considers these investments as strategic investments and based upon projected future earnings expect the diminution in value to be temporary, upon which, we have placed our reliance.

Our opinion is not qualified in respect of the aforesaid matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956 (the ‘Act'') we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. Further to our comments referred to in paragraph 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 & 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 & Loss and Cash Flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

e. On the basis of written representations received from the Directors as on 31st March 2013 and taken on record by the Board of Directors of the Company and on the basis of examination and records of the company, we report and certify that none of the Directors is disqualified as on 31 March, 2013 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act, on the said date;

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in our report of even date to the members of Grauer & Weil (India) Ltd. as at and for the year ended 31st March, 2013)

i. In respect of its fixed assets:

(a) The Company has compiled itemwise lists of all its fixed assets. Showing full particulars including quantitative details and location of fixed assets.

(b) As explained to us, all the assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion is reasonable, considering the size and nature of its business. We are informed that there are no major discrepancies, as regards Plant and Machinery and in respect of other assets, discrepancies, if any, will then be dealt with in the accounts once the process of reconciliation is complete.

(c) The Company has not disposed off any substantial part of its Fixed Assets so as to affect its going concern. ii. In respect of its inventories:

(a) The Inventory, excluding goods in transit has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As regards goods lying with third parties, confirmations have been obtained.

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

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of its inventory. The discrepancies noticed on verification between the physical stocks and book records have been properly dealt with in the books of account.

iii. (a) The Company has during the year granted unsecured loans to a Company listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 50 Lacs (50.00 Lacs) and the year end balance of Loans granted to such party was Rs. 50 Lacs (50.00 Lacs).

(b) In our opinion, the rate of interest where applicable and other terms and conditions on which unsecured loans have been granted to Companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(c) The Companies have repaid the principal amounts as stipulated and have been regular in the payment of interest where applicable.

(d) There is no overdue amount of loans granted to Companies listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company has taken unsecured loans from 5 Companies and a Director, covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 533.50 Lacs (508.50 Lacs) and the year end balance of such loans taken was Rs.533.50 Lacs (458.50 Lacs).

(f) The rate of interest, where applicable and other terms and conditions of unsecured loans taken by the Company, are not prima facie prejudicial to the interest of the Company.

(g) The Company has repaid the principal amounts as stipulated and has been regular in the payment of interest, where applicable.

iv. In our opinion, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. (a) Based on the audit procedure applied by us and according to the information, explanations and representation given to us, we are of the opinion that particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered in the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are prima- facie, reasonable having regard to prevailing market prices at that time except that in respect of certain specialized services availed no comparison of prices could be made as we were informed that there are no prevailing market prices.

vi. The Company has complied with the provisions of Section 58A, 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule, 1975 with regards to deposits accepted from the public. We are informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal in respect of aforesaid deposits.

vii. The Company does not have a formal internal audit system. However, in our opinion, there are adequate internal control procedures commensurate with the size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of the Company''s products to which the said rules are applicable and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have however, not made a detailed examination of the records with a view to determining whether they are accurate, or complete.

ix. (a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Statutory dues with the appropriate authorities, where applicable. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March 2013 for a period of more than six months from the date they became payable.

x. The Company has no accumulated losses at the end of the financial year and has not incurred cash losses, in the current financial year and in the immediately preceding financial year.

xi. The Company has not defaulted in repayment of its dues to banks. The company has not borrowed by way of debentures and from Financial Institutions.

xii. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities.

xiii. The Company is not a chit fund or nidhi or mutual benefit fund or society and hence the provisions of Clauses 4(xiii) (a) to (d) of the Order, are not applicable to the Company.

xiv. The Company is not dealing or trading in shares, securities, debentures, and other investments. Accordingly, the provisions of Clause 4 (xiv) of the Order are not applicable to the Company.

xv. Based on our examination of the records and according to the information and explanations given to us, the company has not given any corporate guarantee for loans taken by others from any bank or financial institution.

xvi. On the basis of the records examined by us and relying on the information compiled by the Company for co-relating the funds raised to the end use of the terms loans, we have to state that, the Company has, prima-facie, applied the term loans for the purpose for which they were raised.

xvii. According to the information and explanations, given to us and on an overall examination, of the Financial Statements of the Company, we are of the opinion that, prima-facie; no funds raised on short term basis have been used for long term investments.

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

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

xx. The Company has not raised any money through a public issue, during the year.

xxi. According to the information and explanations given to us and to the best of our knowledge and belief no fraud on or by the Company, has been noticed or reported by the Company during the year.

For M. M. Nissim And Co.

Chartered Accountants (Firm Reg No: 107122W)

N. KASHINATH Partner

Mem. No. 36490

Mumbai

30th May, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of GRAUER & WEIL (INDIA) LIMITED, as at 3lst March, 20l2 and also the statement of Profit and Loss and the cash flow statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Our audit includes an examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates and judgments made by the management in the preparation of financial statements and evaluating the overall financial statement presentation.

We planned and performed our audit, so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements and to provide a reasonable basis for our opinion and report that:

1) As required by the Companies (Auditors' Report) Order, 2003 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, l956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2) Without qualifying our report, we draw attention to Note no. 27 (L) to the accounts on non provision for diminution in the value of investments relating to investments in equity shares of a subsidiary and associates. The management considers these investments as strategic investments and based upon projected future earnings expect the diminution in value to be temporary, upon which, we have placed our reliance.

In view of the above, the aggregate impact of the same is not quantifiable.

3) Further to our comments referred to in paragraph l 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 the books.

c) The Balance Sheet, statement of Profit and Loss and Cash Flow Statement, under 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 referred to in this report comply with the Accounting Standards referred to in Section 2ll(3C) of the Companies Act, l956.

e) On the basis of written representations received from the Directors as on March 3l, 20l2 and taken on record by the Board of Directors, we report and certify that none of the Directors is disqualified from being appointed as Director under Clause (g) of sub- section (l) of Section 274 of the Companies Act, l956 on the said date.

4) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with para 2 above and together with the notes thereon, give the information as required by the Companies Act, l956 in the manner so required and also give a true and fair view in conformity with the accounting principles generally accepted in India.

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March, 20l2.

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

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

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in our report of even date to the members of Grauer & Weil (India) Ltd. as at and for the year ended 31st March. 2012)

i. In respect of its fixed assets:

(a) The Company has compiled item wise lists of all its fixed assets. Showing full particulars including quantitative details and location of fixed assets.

(b) As explained to us, all the assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion is reasonable, considering the size and nature of its business. We are informed that there are no major discrepancies, as regards Plant and Machinery and in respect of other assets, discrepancies, if any, will then be dealt with in the accounts once the process of reconciliation is complete.

(c) The Company has not disposed off any substantial part of its Fixed Assets so as to affect its going concern.

ii. In respect of its inventories:

(a) The Inventory, excluding goods in transit has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As regards goods lying with third parties, confirmations have been obtained.

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

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of its inventory. The discrepancies noticed on verification between the physical stocks and book records have been properly dealt with in the books of account.

iii. (a) The Company has during the year granted unsecured loans to a _ Company listed in the register maintained under section 30l of the

Companies Act, l956. The maximum amount involved during the year was Rs. 50.00 Lacs (78.93 Lacs) and the year end balance of Loans granted to such parties was Rs. 50.00 Lacs (50.00 Lacs).

(b) In our opinion, the rate of interest where applicable and other terms and conditions on which unsecured loans have been granted to Companies listed in the register maintained under section 30l of the Companies Act, l956 are not, prima facie, prejudicial to the interest of the Company.

(c) The Companies have repaid the principal amounts as stipulated and have been regular in the payment of interest where applicable.

(d) There is no overdue amount of loans granted to Companies listed in the register maintained under section 30l of the Companies Act, l956.

(e) The company has taken unsecured loans from 5 Companies and 2 Directors, covered in the register maintained under section 30l of the Companies Act, l956. The maximum amount involved during the year was Rs.508.50 Lacs (378.50 Lacs) and the year end balance of such loans taken was Rs. 458.50 Lacs (378.50 Lacs).

(f) The rate of interest, where applicable and other terms and conditions of unsecured loans taken by the Company, are not prima facie prejudicial to the interest of the Company.

(g) The Company has repaid the principal amounts as stipulated and has been regular in the payment of interest, where applicable.

iv. (a) In our opinion, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. (a) Based on the audit procedure applied by us and according to the information, explanations and representation given to us, we are of the opinion that particulars of contracts or arrangements referred to in section 30l of the Companies Act, l956 that need to be entered in the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are prima- facie, reasonable having regard to prevailing market prices at that time except that in respect of certain specialized services availed no comparison of prices could be made as we were informed that there are no prevailing market prices.

vi. The Company has complied with the provisions of Section 58A, 58AA of the Companies Act, l956 and the Companies (Acceptance of Deposits) Rule, l975 with regards to deposits accepted from the public. We are informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal in respect of aforesaid deposits.

vii. The Company does not have a formal internal audit system. However, in our opinion, there are adequate internal control procedures commensurate with the size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(l)(d) of the Companies Act, l956 in respect of the Company's products to which the said rules are applicable and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have however, not made a detailed examination of the records with a view to determining whether they are accurate, or complete.

ix. (a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Statutory dues with the appropriate authorities, where applicable. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 3lst March 20l2 for a period of more than six months from the date they became payable.

(b) According to the records of the company Excise Duty, Sales Tax and Income tax which have not been deposited on account of any disputes, are as detailed below;

Particulars Period to which Forum where the dispute is pending Amount the amount related (Rs. In Lacs) 1984-85, 1985-86, 1989-90, Central Excise Gold Appellate Tribunal 27.39

Excise Duty 1990-91,1991-92, 1992-93, 1993-94, 1994-95, 1995-96. 1989-90, 1990-9l, Deputy/Assistant Commissioner

1993-94, 1996-97, 16.77

1997-98, 1999-2000, 2000-2001.

Service Tax 2003-04 to 20l0-11 Commissioner (Appeal) l87.37

Sales Tax 1998-99,2003-2004 and 2005-06 Commissioner (Appeal)/Financial Commissioner. 23.96

Income Tax 2008-2009 Commissioner (Appeal) 0.94

x. The Company has no accumulated losses at the end of the financial year and has not incurred cash losses, in the current financial year and in the immediately preceding financial year.

xi. The Company has not defaulted in repayment of its dues to banks. The company has not borrowed by way of debentures and from Financial Institutions.

xii. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities.

xiii. The Company is not a chit fund or nidhi or mutual benefit fund or society and hence the provisions of Clauses 4(xiii) (a) to (d) of the Order, are not applicable to the Company.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4 (xiv) of the Order are not applicable to the Company.

xv. Based on our examination of the records and according to the information and explanations given to us, the company has not given any corporate guarantee for loans taken by others from any bank or financial institution.

xvi. On the basis of the records examined by us and relying on the information compiled by the Company for co-relating the funds raised to the end use of the terms loans, we have to state that, the Company has, prima-facie, applied the term loans for the purpose for which they were raised.

xvii. According to the information and explanations, given to us and on an overall examination, of the Financial Statements of the Company, we are of the opinion that, prima-facie; no funds raised on short term basis have been used for long term investments.

xviii. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 30l of the Companies Act, l956.

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

xx. The Company has not raised any money through a public issue, during the year.

xxi. According to the information and explanations given to us and to the best of our knowledge and belief no fraud on or by the Company, has been noticed or reported by the Company during the year.

For M. M. Nissim And Co.

Chartered Accountants

(Firm Reg No: I07I22W)

N. KASHINATH

Partner

Mem. No. 36490

Mumbai

26th July, 2012


Mar 31, 2011

We have audited the attached Balance sheet of GRAUER & WEIL (INDIA) LIMITED, as at 31st March, 2011 and also the attached Profit and Loss Account and the cash flow statement of the company for the year ended on that date, annexed thereto. These financial statements are the re- sponsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Our audit includes an examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates and judgements made by the management in the preparation of financial statements and evaluating the overall financial statement presentation.

We planned and performed our audit, so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatements and to provide a reason- able basis for our opinion and report that:

1) As required by the companies (Auditors' Report) Order, 2003 issued by the company Law Board 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.

2) Without qualifying our report, we draw attention to Note no- 17 of schedule O to the accounts on non provision for diminution in the value of investments relating to investments in equity shares of a subsidiary, associates. The management considers these investments as strategic investments and based upon projected future earnings expect the diminution in value to be temporary, upon which, we have placed our reliance.

In view of the above, the aggregate impact of the same is not quantifiable.

3) further to our comments referred to in paragraph 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 the books.

c) The Balance sheet, Profit and Loss Account and cash flow statement, under Report are in agreement with the books of account.

d) In our opinion, the Balance sheet, Profit and Loss Account and cash flow statement referred to in this report comply with the Accounting standards referred to in section 211(3c) of the companies Act, 1956.

e) On the basis of written representations received from the Directors as on March 31, 2011 and taken on record by the Board of Directors, we report and certify that none of the Directors is disqualified from being appointed as Director under clause (g) of sub- section (1) of section 274 of the companies Act, 1956 on the said date.

4) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with para 2 above and together with the notes thereon, give the information as required by the companies Act, 1956 in the manner so required and also give a true and fair view in conformity with the accounting principles generally accepted in India.

i) in the case of the Balance sheet, of the state of affairs of the company as at March, 2011.

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

ii) in the case of the cash flow statement, of the cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGAPH 1 OF THE AUDITORS' REPORT OF EVEN DATE

i. In respect of its fixed assets:

(a) The company has compiled itemwise lists of only Plant & Machinery. In respect of other assets, we are informed that the company is still in the process of compiling proper records.

(b) As explained to us, the assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion is reasonable, considering the size and nature of its business. We are informed that there are no major discrepancies, as regards Plant and Machinery and in respect of other assets, discrepancies, if any, will then be dealt with in the accounts once the process of compilation is complete.

(c) The company has not disposed off any substantial part of its fixed Assets so as to affect its going concern. ii. In respect of its inventories:

(a) The Inventory, excluding goods in transit has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As regards goods lying with third parties, confirmations have been obtained.

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

(c) On the basis of our examination of the inventory records of the company, we are of the opinion that the company is maintaining proper records of its inventory. The discrepancies noticed on verification between the physical stocks and book records have been properly dealt with in the books of account.

iii. (a) The company has during the year granted unsecured loans to 2 companies listed in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved during the year was Rs. 78.93 Lacs (157.40 Lacs) and the year end balance of Loans granted to such parties was Rs. 50.00 Lacs (66.43 Lacs).

(b) In our opinion, the rate of interest where applicable and other terms and conditions on which unsecured loans have been granted to companies listed in the register maintained under section 301 of the companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(c) The companies have repaid the principal amounts as stipulated and have been regular in the payment of interest where applicable.

(d) There is no overdue amount of loans granted to companies listed in the register maintained under section 301 of the companies Act, 1956.

(e) The company has taken unsecured loans from 4 companies and 2 Directors, covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved during the year was Rs. 378.50 Lacs (255 Lacs) and the year end balance of such loans taken was Rs. 378.50 Lacs (255 Lacs).

(f) The rate of interest, where applicable and other terms and conditions of unsecured loans taken by the company, are not prima facie prejudicial to the interest of the company.

(g) The company has repaid the principal amounts as stipulated and has been regular in the payment of interest, where applicable.

iv. (a) In our opinion, there are adequate internal control systems commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. (a) Based on the audit procedure applied by us and according to the information, explanations and representation given to us, we are of the opinion that particulars of contracts or arrangements referred to in section 301 of the companies Act, 1956 that need to be entered in the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are prima- facie, reasonable having regard to prevailing market prices at that time except that in respect of certain specialized services availed no comparison of prices could be made as we were informed that there are no prevailing market prices.

vi. The company has complied with the provisions of section 58A, 58AA of the companies Act, 1956 and the companies (Acceptance of Deposits) Rule, 1975 with regards to deposits accepted from the public. We are informed by the management that no order has been passed by the company Law Board or National company Law Tribunal or Reserve Bank of India or any court or any other tribunal in respect of aforesaid deposits.

vii. The company does not have a formal internal audit system. however, in our opinion, there are adequate internal control procedures commensurate with the size and nature of its business.

viii. We have broadly reviewed the books of account maintained by the company pursuant to the rules made by the central Government for maintenance of cost records under section 209(1) (d) of the companies Act, 1956 in respect of the company's products to which the said rules are applicable and are of the opinion that prima facie the prescribed accounts have been made and maintained. We have however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. (a) The company is regular in depositing undisputed statutory dues, including Provident fund, Investor education and Protection fund, employees state Insurance, Income Tax, sales Tax, Wealth Tax, service Tax, customs Duty, excise Duty, cess and other statutory dues with the appropriate authorities, where applicable. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March 2011 for a period of more than six months from the date they become payable.

(b) According to the records of the company excise Duty, sales Tax and Income tax which have not been deposited on account of any disputes, are as detailed below:

Particulars Period to which the amount related Forum where the dispute is pending Amount (Rs. in Lacs)

Excise Duty 1984-85, 1985-86, 1989-90, 1990-91, 1991-92, Central excise Gold Appellate Tribunal 27.39 1992-93, 1993-94, 1994-95, 1995-96.

1989-90, 1990-91, 1993-94, 1996-97, Deputy/Assistant Commissioner 16.77 1997-98, 1999-2000, 2000-2001.

Sales Tax 2002-2003 and 2003-2004 Commissioner (Appeal)/financial Commissioner 29.29

Income Tax 2008-2009 Commissioner (Appeal) 0.94

x. The company has no accumulated losses at the end of the financial year and has not incurred cash losses, in the current financial year and in the immediately preceding financial year.

xi. The company has not defaulted in repayment of its dues to banks. The company has not borrowed by way of debentures and from financial Institutions.

xii. As explained to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities.

xiii. The company is not a chit fund or nidhi or mutual benefit fund or society and hence the provisions of clauses 4(xiii) (a) to (d) of the Order, are not applicable to the company.

xiv. The company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Order are not applicable to the company.

xv. Based on our examination of the records and according to the information and explanations given to us, the company has not given any corporate guarantee for loans taken by others from any bank or financial institution.

xvi. On the basis of the records examined by us and relying on the information compiled by the company for co-relating the funds raised to the end use of the term loans, we have to state that, the company has, prima-facie, applied the term loans for the purpose for which they were raised.

xvii. According to the information and explanations, given to us and on an overall examination of the financial statements of the company, we are of the opinion that, prima-facie; no funds raised on short term basis have been used for long term investments.

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

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

xx. The company has not raised any money through a public issue, during the year.

xxi. According to the information and explanations given to us and to the best of our knowledge and belief no fraud on or by the company, has been noticed or reported by the company during the year.

For M. M. Nissim And Co. Chartered Accountants

(firm Reg No: 107122W)

N. KASHINATH Partner

Mem. No. 36490

Mumbai

2nd September, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of GRAUER & WEIL (INDIA) LIMITED, as at 31st March, 2010 and also the attached Profit and Loss Account and the cash flow statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the auditing standards generally accepted in India. Our audit includes an examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates and judgements made by the management in the preparation of financial statements and evaluating the overall financial statement presentation.

We planned and performed our audit, so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence So gfwe reasonable assurance that die financial statements are free from material misstatements and to provide a reasonable basis for our opinion and report that.

1) As required by the Companies {Auditors Report) Order, 2003 issued by the Company Law Board in terms of Section 227(4A) of the Companies Act, 19%, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2) Without qualifying our report, we draw attention to Note no- 17 of schedule O to the accounts on non provision for diminution in the value of investments relating to investments hi equity shares of a subsidiary, associates. The management considers these investments as strategic investments and based upon projected future earnings expect die diminution in value to be temporary, upon which, we have placed our reliance.

In view of die above, the jggm&Ui impact of die same is not quantifiable.

3) Further to our comments referred to in paragraph I above.

a) We have obtained al 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 die books.

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

d) In our opinion, die Balance Sheet, Profit aid Loss Account and Cash Flow Statement referred to in this report comply with die Accounting Standards referred to in Section 2! 1(3Q of die Companies Act, 1956.

e) On die basis of written representations received from die Directors as on March 31, 2010 and taken on record by the Board of Directors, we report and certify that none of the Directors is disqualified from being appointed as Director under Clause (g) of sub- section (i)ofSecr«n 274 of the Companies Act, 1956 on die said date.

4) In our opinion and tt> the best of our information and according to die explanations given to us, the said accounts read with para 2 above and together wim the notes thereon, give the information as required by die Companies Act, 1956 in the manner so required and also give a true and fair view in conformity vHth the accounting principles generally accepted in India.

i) in die case of Che Balance Sheet, of the state oi affairs of the Company as at March, 2010.

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

iii) in Che case of the Cash How Statement, of die Cash flows for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGAPH I OF THE AUDITORS REPORT OF EVEN DATE i. In respect of its fixed assets:

(a) The Company has compiled itemwise lists of only Plant & Machinery. In respect of other assets, we are informed that the Company is still in the process of compiling proper records .

(b) As explained to us, the assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion, is reasonable, considering the size and nature of its business. We are informed that there are no major discrepancies, as regards Plant and Machinery and in respect of other assets, discrepancies, if any, will then be dealt with in the accounts once the process of compilation is complete.

(c) The Company has not disposed off any substantial part of its Fixed Assets so as to affect its going concern.

ii. In respect of its inventories:

(a) The Inventory, excluding goods in transit has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. As regards goods lying with third parties, confirmations have been obtained.

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

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that the Company is maintaining proper records of its inventory. The discrepancies noticed on verification between the physical stocks and book records have been properly dealt with in the books of account.

iii. (a) The Company has during the year granted unsecured loans to 2_Companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 157.40 Lacs ( 156 Lacs ) and the year end balance of Loans granted to such parties was Rs. 66.43 Lacs ( 156 Lacs ).

(b) In our opinion, the rate of interest where applicable and other terms and conditions on which unsecured loans have been granted to Companies listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(c) The Companies have repaid the principal amounts as stipulated and have been regular in the payment of interest where applicable.

(d) There is no overdue amount of loans granted to Companies listed in the register maintained under section 301 of the Companies Act, 1956.

(e) The company has taken unsecured loans from 4 Companies and a Director, covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 255 Lacs (215 Lacs ) and the year end balance of such loans taken was Rs. 255 Lacs(210 Lacs ).

(f) The rate of interest, where applicable and other terms and conditions of unsecured loans taken by the Company, are not prima facie prejudicial to the interest of the Company.

(g) The Company has repaid the principal amounts as stipulated and has been regular in the payment of interest, where applicable.

iv. (a) In our opinion, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. (a) Based on the audit procedure applied by us and according to the information, explanations and representation given to us, we are of the opinion that particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered in the register maintained under that section have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are prima- facie, reasonable having regard to prevailing market prices at that time except that in respect of certain specialized services availed no comparison of prices could be made as we were informed that there are no prevailing market prices.

vi. The Company has complied with the provisions of Section 58A, 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rule, 1975 with regards to deposits accepted from the public. We are informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other tribunal in respect of aforesaid deposits.

vii. The Company does not have a formal internal audit system. However, in our opinion, there are adequate internal control procedures commensurate with the size and nature of its business.

viii. We are informed that the Central Government has not prescribed the maintenance of cost records under section 209 (I) (d) of the Companies Act, 1956,except for its paints Division. We have broadly reviewed the Books of Accounts maintained by its Paints Division and are of the opnion that, premia facie, the prescribed accounts and records have been made and maintained.

ix. (a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other Statutory dues

with the appropriate authorities, where applicable. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March 2010 for a period of more than six months from the date they become payable.

(b) According to the records of the company Excise Duty, Sales Tax and Income tax which have not been deposited on account of any disputes, are as detailed below;

Particulars Period to which Forum where the dispute is Amount the amount related pending (Rs. in Lacs)

1984-85, 1985-86,

1989-90, 1990-91,

1991-92, 1992-93, Central Excise Gold Appellate 27.39 Tribunal

1993-94, 1994-95,

Excise Duty 1995.95

1989-90, 1990-91,

1993-94, 1996-97,

1997-98, 1999-2000, Deputy/Assistant Commissioner 16.77 2000-2001.

1998-99, 1999-2000, Commissiones / Financial

Sales Tax 2000 2001 And Commissioner 45.34

2002-2003

2003-2004,

Income lax 2004-2005 And Commissioner (Appeal) 58.50



x. The Company has no accumulated losses at the end of the financial year and has not incurred cash losses, in the current financial year and in the immediately preceding financial year.

xi. The Company has not defaulted in repayment of its dues to banks. The company has not borrowed by way of debentures and from Financial Institutions.

xii. As explained to us, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or any other securities.

xiii. The Company is not a chit fund or nidhi or mutual benefit fund or society and hence the provisions of Clauses 4(xiii) (a) to (d) of the Order, are not applicable to the Company.

xiv. The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4 (xiv) of the Order, are not applicable to the Company.

xv. Based on our examination of the records and according to the information and explanations given to us, the company has not given any corporate guarantee for loans taken by others from any bank or financial institution.

xvi. On the basis of the records examined by us and relying on the information compiled by the Company for co-relating the funds raised to the end use of the terms loans, we have to state that, the Company has, prima-facie, applied the term loans for the purpose for which they were raised.

xvii. According to the information and explanations, given to us and on an overall examination, of the Financial Statements of the Company, we are of the opinion that, prima-facie, no funds raised on short term basis have been used for long term investments.

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

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

xx. The Company has not raised any money through a public issue, during the year.

xxi. According to the information and explanations given to us and to the best of our knowledge and belief no fraud on or by the Company, has been noticed or reported by the Company during the year.



For M. M. Nissan AnrJ Co,

Chartered Accountants (Firm Reg No: I0712ZW)

N. KASH1NATH

Partner

Mem. No. 36490

Mumbai, 25th August, 2010

 
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