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Auditor Report of Gravita India Ltd.

Mar 31, 2015

Report on the Standalone Financial Statements

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

Management's Responsibility for the Standalone Financial Statements

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

Auditor's Responsibility

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

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

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

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 mis-statement of the financial statements, whether due to fraud or error In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, 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 March 31, 2015, and its profit and its cash flows for the year ended on that date.

Other Matters

The standalone financial statements include the Company's share of net profit of Rs. 1,160.34 lacs for the year ended March 31, 2015 in respect of 3 partnership firms, whose financial statements have not been audited by us. These financial statements have been audited by other auditors whose reports have been furnished to us by the Management and our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these partnership firms, is based solely on the reports of the other auditors. Refer Note 41 to the financial statements.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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

(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.

(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 29 to the financial statements.

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses. Refer Note 45 to the financial statements.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company. Refer Note 46 to the financial statements.

Annexure to the Independent Auditor's Report

(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.

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(ii) In respect of its inventories:

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

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the Management 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 the 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) 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 Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

(c) There are no dues in respect of Custom Duty Wealth Tax, Sales Tax, Excise Duty and Cess which have not been deposited on account of any dispute. Details of dues of Income-tax, Service Tax, Value Added Tax which have not been deposited as on March 31, 2015 on account of disputes are given below:

Name of statute Nature of dues Forum where dispute is pending

Income tax Act, 1961 Income Tax Appellate Authority upto Commissioner level

Finance Act, 1994 Service Tax Appellate Authority upto Commissioner level

Finance Act, 1994 Service Tax Appellate Authority upto Commissioner level

The Rajasthan Value Value Added Tax Appellate Authority upto Added Tax Act, 2003 Commissioner level

Name of statute Period to which the Amount involved* amount relates (Rs. in lacs)

Income tax Act, 1961 2010-11 10.21 Finance Act, 1994 2010-11 and 14.61 2011-12 Finance Act, 1994 2014-15 0.79 The Rajasthan Value 2011-12 4.54 Added Tax Act, 2003

* includes interest and penalty, wherever applicable.

(d) There are no amounts that are due to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder.

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

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions and banks. The Company has not issued any debentures.

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xi) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained.

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

For DELOITTE HASKINS & SELLS Chartered Accountants Firm's Registration No. 015125N

Sd/- Vijay Agarwal Jaipur Partner May 23, 2015 Membership No. 094468


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Gravita India Limited which comprise the Balance Sheet as at 31st March 2013, 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 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 mis-statement, 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 mis-statement 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 read together with the Significant Accounting Policies and notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

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

b) In the case of Statement of Profit & Loss, of the profit of the Company for the year ended on that date and

c) In the case of 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”), as amended, issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from the branches not visited by us;

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 and the returns from the branches;

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; and

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

1. In respect of fixed assets:

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

(b) As explained to us, fixed assets have been physically verified by the management in a phased periodical manner which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification, as per the explanations provided to us.

(c) In our opinion and according to the information and explanation given to us, there is no substantial disposal of fixed assets during the year.

2. In respect of its inventories:

(a) As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its business.

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

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

3. In respect of loans secured or unsecured, taken or granted by the Company to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956:

a) As per information and explanations provided to us, the Company has given following loans :

(Rs. in Lacs)

Name Nature Loan Given Maximum Amount Balance as on outstan ding during 31st March, 2013 the year

Gravita Ghana Limited Subsidiary 832.00 832.00 72.47

Gravita Senegal SAU Subsidiary 579.00 579.00 520.32

Gravita Exim Limited Subsidiary 1854.00 1,060.18 769.23

Noble Build Estate Private Limited Subsidiary 200.00 209.23 204.62

Gravita Energy Limited Subsidiary 0.75 5.68 2.59

b) In our opinion, the rate of interest, where applicable and other terms & conditions on which loans have been given to the parties listed in the register maintained u/s 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

c) In our opinion and according to the information and explanations given to us the receipt of the principal amount and nterest as per terms of the agreement are regular. No Interest has been charged from Gravita Energy Ltd

d) The loan is receivable on demand hence there is no overdue amount in excess of " 1 Lacs in respect of loans granted to companies, firms or other parties listed in the register maintained under Section 301 of Companies Act, 1956

e) According to the information and explanations given to us, the Company has not taken any loan from parties which are covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently , the requirements of Clauses ( iii) (f) and (iii) (g) of paragraph 4 of the Order are not applicable.

4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business for the purchase of inventory and 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 weaknesses in such internal control system.

5. In respect of register maintained under Section 301 of the Companies Act, 1956:

(a) Based on the information and explanations given to us, the transactions pertaining to contracts and arrangements that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

(b) According to information and explanation given to us, there are transactions of purchases and sales entered in the register maintained under Section 301 of the Companies Act, 1956 and prices of such are reasonable having regard to prevailing market prices at the relevant time as explained to us.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted deposit from Public and companies, therefore burden of Compliance of the provision of the Section 58A and 58AA clause 4(vi) of the Companies Act 1956 do not arise.

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

8. As informed to us, Company is maintaining the cost records as prescribed under Section 209-(1) (d) of the Companies Act 1956 by the Central Government for the products of the Company. We have not, however, carried out the detailed examination of the same.

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

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and the banks during the year.

12. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of the clause 4(xiii) of the Order are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

15. The Company has given guarantees for loans taken by others from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, the Company has raised five new term loans during the year and has applied for the purpose for which they have been raised.

17. According to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that, prima facie, have been used for the long term investment nor the long term loan have been used to finance short term assets except for permanent working capital.

18. During the year the Company has not allotted equity shares on preferential basis to the parties covered in the register maintained u/s 301 of the Companies Act, 1956. However the Company has allotted 27552 equity shares to employees on preferential basis under Gravita ESOP 2011 Scheme.

19. According to the information and explanation given to us, during the period covered by our audit report, the Company has not issued any debentures. Accordingly, no security/charge has been created in respect of debentures issued.

20. The Company has not raised any monies by way of public issue during the year.

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

For Rajvanshi & Associates

Chartered Accountants

Firm Regn. No. : 005069C

Vikas Rajvanshi

Partner

Membership No. : 073670

Place : Jaipur

Date : 28th May 2013


Mar 31, 2012

1. We have audited the accompanying financial statements of GRAVITA INDIA LIMITED which comprise the Balance Sheet as at 31st March 2012, 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 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.

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

3. As required by the Companies (Auditor's Report) Order, 2003 ("the Order"), as amended, 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.

4. Further to our comments in annexure referred to in paragraph 3 above 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; and

e. On the basis written representations received from the directors as on 31st March 2012, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2012, from being appointed as a director in terms of clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the financial statements read together with the Significant Accounting Policies and notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

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

ii. In the case of Profit & Loss Account, of the profit of the Company 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.

(i) In respect of fixed assets:

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

(b) As explained to us, fixed assets have been physically verified by the management in a phased periodical manner which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification, as per the explanations provided to us

(c) In our opinion and according to the information and explanation given to us, there is no substantial disposal of fixed assets during the year.

(ii) In respect of its inventories:

(a) As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its business.

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

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

(iii) In respect of loans secured or unsecured, taken or granted by the Company to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956:

(a) As per information and explanations provided to us, the Company has given loan to subsidiary namely Gravita Exim Limited of Rs905.44 lacs Maximum amount outstanding at any time during the year being Rs421.23 lacs and balance at the year end being Rs287.06 lacs.

(b) In our opinion, the rate of interest, where applicable and other terms & conditions on which loans have been given to the parties listed in the register maintained u/s 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

(c) In our opinion and according to the information and explanations given to us the receipt of the principal amount and interest as per terms of the agreement are regular.

(d) The loan is receivable on demand hence there is no overdue amount in excess of Rs1 Lacs in respect of loans granted to companies, firms or other parties listed in the register maintained under Section 301 of Companies Act, 1956.

(e) According to the information and explanations given to us, the Company has taken unsecured loan of Rs2.00 crore from Jalousies India (P) Limited which is a Company in which directors are interested during the year and also repayment was made of the same amount which is covered in the register maintained under Section 301 of the Companies Act, 1956.

(f) In our opinion, the rate of interest, where applicable and other terms & conditions on which loans have been taken from the parties listed in the register maintained u/s 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the Company.

(g) In our opinion and according to the information and explanations given to us the payment of the principal amount was repaid in full along with interest as per terms of the agreement.

(iv) In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business for the purchase of inventory and 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 weaknesses in such internal control system.

(v) In respect of Register maintained under Section 301 of the Companies Act, 1956:

(a) Based on the information and explanations given to us, the transactions pertaining to contracts and arrangements that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

(b) According to information and explanation given to us, there are transactions of purchases and sales entered in the register maintained under Section 301 of the Companies Act, 1956 and prices of such are reasonable having regard to prevailing market prices at the relevant time as explained to us.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposit from Public and companies, therefore burden of Compliance of the provisions the Section 58A and 58AA [clause 4(vi)of the Order] of the Companies Act, 1956 do not arise.

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

(viii) As informed to us, Company is maintaining the cost records as prescribed under Section 209(1) (d) of the Companies Act, 1956 by the Central Government for the products of the Company. We have not, however, carried out the detailed examination of the same.

(ix) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company has been regular in depositing undisputed statutory dues including Income Tax, TDS, Sales-tax, VAT, Custom Duty, Excise Duty, Educational Cess and any other dues during the year with the appropriate authorities except in three cases.

Sl No Particulars Amount Involved Forum Where dispute is pending (Rs in Lacs)

1. The Sales Tax exemption claimed by the 20.20 Assistant Commissioner, Commercial Taxes Company has been withdrawn and interest Department Special Circle-II Jaipur of Rs 8.69 Lacs was levied by expatriate order.

2. Rejection of Central Excise rebate of Rs 4.70 lacs 4.75 Central Excise Appellate Tribunal, and refund of Rs0.05 lacs on exported goods Delhi (CEGAT) u/s 11B of Central Excise Act 1944

3. Scrutiny Assessment Proceedings U/s 143(3) 1.55* CIT (Appeals) III Jaipur for F.Y 2007-08 A.Y 2008-09

*The Company has paid Rs1.55 Lacs against the same on protest

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

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and the banks during the year.

(xii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of the clause 4(xiii) of the Order are not applicable to the Company.

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

(xv) The Company has given guarantees for loans taken by others from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

(xvi) According to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, the Company has raised four term loans during the year and has applied for the purpose for which they have been raised.

(xvii) According to the information and explanation given to us, and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that, prima facie, have been used for the long term investment nor the long term loan have been used to finance short term assets except for permanent working capital.

(xviii) During the year the Company has not allotted equity shares on preferential basis to the parties covered in the register maintained u/s 301 of the Companies Act, 1956.

(xix) According to the information and explanation given to us, during the period covered by our audit report, the Company has not issued any debentures. Accordingly, no security/charge has been created in respect of debentures issued.

(xx) The Company has issued 36,00,000/- Equity Shares of Face value of Rs10/- each at a premium of Rs115/- per share during the Financial Year 2010-2011. The end use of proceeds of the fund raised by public issue has been disclosed by the management in the notes to the accounts which is duly verified by us.

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

For Rajvanshi & Associates

Chartered Accountants

Firm Regn. No. : 005069C

Vikas Rajvanshi

Partner

Membership No. : 073670

Place : Jaipur

Date : 25th May 2012


Mar 31, 2011

1.We have audited the attached Balance Sheet of GRAVITA INDIA LIMITED as at 31st March 2011, Profit and Loss Account and the Cash Flow Statement 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.

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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (hereinafter referred to as the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows :->

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

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of the written representation received from the directors, and taken on record by the Board of Directors, as on March 31, 2011, we report that none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes, 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

ii) in the case of Profit & Loss Account, of the profit of the Company 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.

ANNEXURES TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

(i) In respect of fixed assets:

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

(b) As explained to us, fixed assets have been physically verified by the management in a phased periodical manner which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification, as per the explanations provided to us.

(c) In our opinion and according to the information and explanation given to us, there is no substantial disposal of fixed assets during the year.

(ii) In respect of its inventories:

(a) As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the company and the nature of its business.

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

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories. No discrepancies noticed on verification between the physical stocks and the book records.

(iii) In respect of loans secured or unsecured, taken or granted by the company to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956:

(a) As per information and explanations provided to us, the company has given loan to three of its subsidiaries namely Floret Tradelink Ltd. of Rs.48,50,000, Gravita Technomech LLP of Rs.2,96,48,000 and Gravita Exim Ltd. of Rs.5,66,50,000. Maximum amount outstanding at any time during the year being Rs.53,02,820, Rs.2,96,48,000 and Rs.2,62,55,246 respectively and balance at the year end being Rs.5,26,164, Rs.2,96,48,000 and Rs.1,04,65,646 respectively.

(b) In our opinion, the rate of interest, where applicable and other terms & conditions on which loans have been given to the parties listed in the register maintained u/s 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the company.

(c) In our opinion and according to the information and explanations given to us the receipt of the principal amount and interest as per terms of the agreement are regular.

(d) There is no overdue amount in excess of Rs.1 Lacs in respect of loans granted to companies, firms or other parties listed in the register maintained under section 301 of Companies Act, 1956.

(e) According to the information and explanations given to us, the Company has taken unsecured loan of Rs.66,50,000 from two directors during the year and also repayment was made of the same amount which is covered in the register maintained under section 301 of the Companies Act, 1956.

(f) In our opinion, the rate of interest, where applicable and other terms & conditions on which loans have been taken from the parties listed in the register maintained u/s 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the company.

(g) In our opinion and according to the information and explanations given to us the payment of the principal amount and interest as per terms of the agreement are regular.

(iv) In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business for the purchase of inventory and 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 weaknesses in such internal control system.

(v) In respect of register maintained under Section 301 of the Companies Act, 1956:

(a) Based on the information and explanations given to us, the transactions pertaining to contracts and arrangements that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

(b) According to information and explanation given to us, there are transactions of purchases and sales entered in the register maintained under section 301 of the Companies Act, 1956 and prices of such are reasonable having regard to prevailing market prices at the relevant time as explained to us.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposit from Public and companies, therefore burden of Compliance of the provision of Section 58A and 58AA clause 4(vi) of the Companies Act 1956 do not arise.

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

(viii) As informed to us, Company is maintaining the cost records as prescribed under Section 209(1) (d) of the Companies Act, 1956 by the Central Government for the products of the Company. We have not, however, carried out the detailed examination of the same.

(ix) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been regular in depositing undisputed statutory dues including Income Tax, TDS, Sales-tax, VAT, Custom Duty, Excise Duty, Educational Cess and any other dues during the year with the appropriate authorities except in three cases.

S. No Particulars Amount Involved Forum where (Rs. in Lacs) dispute is pending

1. The Sales Tax exemption claimed by the company 20.20 Assistant Commissioner, has been withdrawn and interest of Rs.8.69 Lacs Commercial Taxes Department was levied by expatriate order. Special Circle-II Jaipur

2. Disallowance of various expenses u/s 143(3) of 1.55 C.IT (Appeals) III JAIPUR The Income Tax Act 1961

3. Rejection of Central Excise rebate of 4.70 lacs and 4.75 Central Excise Appellate refund of 0.05 lacs on exported goods u/s 11B of Tribunal, Delhi (CEGAT) Central Excise Act 1944

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

(xi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and the banks during the year.

(xii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of the clause 4(xiii) of the Order, are not applicable to the Company.

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

(xv) The Company has given guarantees for loans taken by others from banks and financial institutions. According to the information and explanations given to us, we are of the opinion the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

(xvi) According to the information and explanation given to us, and on an overall examination of the balance sheet of the Company, the company has raised six term loans during the year and has applied for the purpose for which they have been raised.

(xvii) According to the information and explanation given to us, and on an overall examination of the balance sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that, prima facie, have been used for the long term investment nor the long term loan have been used to finance short term assets except for permanent working capital.

(xviii) During the year the company has not allotted equity shares on preferential basis to the parties covered in the register maintained u/s 301 of the Companies Act, 1956.

(xix) According to the information and explanation given to us, during the period covered by our audit report, the Company has not issued any debentures. Accordingly, no security/charge has been created in respect of debentures issued.

(xx) The Company has issued 36,00,000/- equity shares of Face value of Rs.10/- each at a premium of Rs.115/- per share during the year. The end use of proceeds of the fund raised by public issue has been disclosed by the management in the notes to the accounts which is duly verified by us.

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

For Rajvanshi & Associates

Chartered Accountants

Vikas Rajvanshi Partner

Membership No. : 073670

Firm Regn. No. : 005069C

Place : Jaipur

Date : 21st May 2011




Mar 31, 2010

1. We have audited the attached Balance Sheet of GRAVITA INDIA LIMITED as at March 31, 2010, Profit and Loss Account and the Cash Flow Statement 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.

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 financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order 2003 as amended by the Companies (Auditors Report) (Amendment) order, 2004 (hereinafter referred to as the Order) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report as follows :->

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

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

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

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of the written representation received from the directors, and taken on record by the Board of Directors, as on March 31, 2010, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with notes, 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

ii) in the case of Profit & Loss Account, of the profit of the Company for the year ended of that date and iii) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

ANNEXURES TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

1. In respect of fixed assets:

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

b. As explained to us, fixed assets have been physically verified by the management in a phased periodical manner which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification, as per the explanations provided to us.

c. In our opinion and according to the information and explanation given to us, there is no substantial disposal of fixed assets during the year.

2. In respect of its inventories:

a. As explained to us, the inventories have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the company and the nature of its business.

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

c. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories. No discrepancies noticed on verification between the physical stocks and the book records.

3. In respect of loans secured or unsecured, taken or granted by the company to/from companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956:

a. As per information and explanations provided to us, the company has given loan to two of its subsidiaries namely Floret Tradelink Pvt. Ltd. And Gravita Exim Ltd., maximum amount outstanding at any time during the year being Rs. 10,10,830 and Rs. 65,00,000 and balance at the year end being Rs. 10,10,830 and NIL

b. According to the information and explanations given to us, the Company has taken unsecured loan of Rs. 80 Lacs from two directors during the year and also repayment was made which is covered in the register maintained under section 301 of the Companies Act, 1956.

c. In our opinion, the rate of interest, where applicable and other terms & conditions on which loans have been taken from the parties listed in the register maintained u/s 301 of the companies Act, 1956 are not prima facie prejudicial to the interest of the company.

4. In our opinion, and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and nature of its business for the purchase of inventory and 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 weaknesses in such internal control system.

5. In respect of register maintained under section 301 of the companies act, 1956:

a. Based on the information and explanations given to us, the transactions pertaining to contracts and arrangements that need to be entered into a register in pursuance of section 301 of the Companies Act, 1956 have been so entered.

b. According to information and explanation given to us, there are transactions of purchases and sales entered in the register maintained under section 301 of the Companies Act, 1956 and prices of such are reasonable having regard to prevailing market prices at the relevant time as explained to us. Details of such transactions are as under:

S. No. Name of Party Transaction Type Amount (Rs. in Lacs)

1. Gravita Exim Limited Sales 21.91 Purchases 4.15

Purchases - DEPB License 0.46

2. Navam Lanka Limited Purchase 296.13

3. Gravita Honduras S.A. Sales 37.98

4. Florate Tradelink Private Limited Sales 21.36

5. Penta Exim Limited Sales 73.90

Sales-DEPB 1.23

Purchases 338.58

(i) In our opinion and according to the information and explanations given to us, the Company has accepted deposit from Public and companies. The company has been duly complying with the provision the section 58A and 58AA clause 4(vi) of the Companies Act 1956.

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

(Mi) As informed to us, Company is maintaining the cost records as prescribed under Section 209-(l) (d) of the Companies Act 1956 by the central government for the products of the Company. We have not, however, carried out the detailed examination of the same.

(iv) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has been regular in depositing undisputed statutory dues including Income Tax, TDS, Sales-tax, VAT, Custom Duty, Excise Duty, Educational Cess and any other dues during the year with the appropriate authorities.

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

(vi) Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and the banks during the year.

(vii) In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

(viii) The Company is not a chit fund / nidhi / mutual benefit fund / society. Therefore, the provisions of the clause 4(xiii) of the order, are not applicable to the company.

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

(x) The Company has given guarantees for loans taken by others from banks and financial institutions. According to the information and explanations given to us, we are of the opinion the terms and conditions thereof are not prima facie prejudicial to the interest of the company.

(xi) According to the information and explanation given to us, and on an overall examination of the balance sheet of the Company, the company has raised two term loans during the year and has applied for the purpose for which they have been raised.

(xii) According to the information and explanation given to us, and on an overall examination of the balance sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that, prima facie, have been used for the long term investment nor the long term loan have been used to finance short term assets except for permanent working capital

(xiii) During the year the company has allotted equity shares on preferential basis to the parties covered in the register maintained u/s 301 of the Companies Act, 1956 the price at which these equity shares have been issued has been stated by the management not being prejudicial to the company, as per explanations provided.

(xiv) According to the information and explanation given to us, during the period covered by our audit report, the Company has not issued any debentures. Accordingly, no security/charge has been created in respect of debentures issued.

(xv) The Company has not raised any money through a public issue during the year.

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

For Rajvanshi & Associates Chartered Accountants

Sd/-

Vikas Rajvanshi

Partner

Membership No. : 073670

Place : Jaipur

Date : 04.08.10

 
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