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Auditor Report of Gujarat Natural Resources Ltd.

Mar 31, 2015

We have audited the accompanying Financial Statements of M/s. GUJARAT NATURAL RESOURCES LIMITED, (the "Company"), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit & Loss and also 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 :

The Company's Board of Directors is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance 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 provision 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 the 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.

Auditors' Responsibility :

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risk of material misstatement of the financial statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls 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. An audit also includes evaluating the appropriateness of accounting polices used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Emphasis of Matter:

We draw attention to ;

a) Point No. 3 in Note No. 19(II) to the financial statements regarding non-provision of doubtful debts amounting to Rs. 739.75 lacs, as a result thereof the debit balance of profit & loss A/c gets understated by the said sum and correspondingly Sundry debtors are overstated by the said sum.

b) Point No. 4 in Note No. 19(II) to the financial statements regarding the company has in past granted/ renewed loans and advances to certain parties which have been identified as non-performing asset. Accordingly company has not recognized any income from the same. In the opinion of the directors, the process of recovery is going on and the same is not fully doubtful of recovery. However in our opinion company needs to make provision for such long outstanding non-performing assets amounting to Rs. 206.17 lacs. Due to non-provision in this regard, the debit balance of profit & loss account is under stated and the balance of loans and advances is over stated by the said sum.

c) Further Point No. 5 in Note No. 19(II) to the accompanying financial statements regarding non charging of Interest on Loans & Advances to Related Parties and other parties u/s. 186 of the Companies Act, 2013

Opinion :

In our opinion, and to the best of our information and according to the explanations given to us, the accompanying 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.

i) In the case of Balance Sheet, of the state of affairs of the company as at 31st March 2015.

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

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

Report on other Legal and Regulatory Requirements :

1. As required by the Companies (Auditor's Report) Order, 2015, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order.

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

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

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

c) The Balance Sheet and Statement of Profit & Loss dealt with by this report are in agreement with the books of account.

d) In our opinion, the aforesaid financial statements comply with the Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of written representations received from the Directors as on 31st March, 2015, and 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.

ii) In our opinion and as per the information and explanations provides to us, the company has not entered into any long-term contracts including derivative contracts, requiring provision under applicable laws or accounting standards, for material foreseeable losses, and

iii) There are no outstanding amount which is required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report of even date.

1.1 The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets on the basis of available information.

1.2 We are informed that all the fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

2. The company's activities are such that this clause of the aforesaid order is not applicable to the company.

3. According to the information and explanations given to us, the company has granted Interest free unsecured loans to parties covered in the Register maintained under Section 189 of the Companies Act.

3.1 In respect of the aforesaid loans, the parties are repaying the principal amounts, as stipulated.

3.2 In our opinion and according to the information and explanation given to us, there are no overdue amounts in respect of the transactions listed in Para 3 above.

4. In our opinion and according to the information and explanation given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to purchase of fixed assets and for the sale of services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. According to the information and explanation given to us, the Company has not accepted any deposits in terms of directives issued by Reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and rules framed there under.

6. Maintenance of cost records has not been prescribed by the central government under sub-section (1) of section 148 of the Companies Act, for the activities of the company.

7.1. The company is generally 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 the appropriate authorities and we have been informed that there are no arrears of outstanding statutory dues as at the last day of the financial year under audit for a period of more than six months from the date they became payable.

7.2 According to the information and explanations given to us and record of the Company disputed amount payable in respect of Income tax not deposited with the appropriate authorities are as under:

Name of Statue Nature Disputed Period to which Forum where of Dues Amount Rs. the amount Relates dispute is pending

Income Tax Act Income Tax 7,77,730/- A.Y. 2012-13 CIT (Appeal), Ahmedabad

7.3 According to the information and explanation given to us, there are no outstanding amounts that are required to be transferred to investor Education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and Rules made thereunder.

8. The Company has no accumulated losses at the end of the financial year under audit. The company has not incurred any cash losses during the financial year covered under audit, and also during immediately preceding financial year.

9. Since the company has not availed any financial assistance from Bank and / or financial institution and also not issued any debentures, this clause is not applicable.

10. In our opinion, and according to information and explanations given to us, the Company has not given guarantee for loans taken by others from banks or financial institutions.

11. According to the information and explanations given to us, no term loans were obtained during the year under audit.

12. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

FOR PANKAJ K. SHAH ASSOCIATES

Firm Registration No. 107352W

CHARTERED ACCOUNTANTS

(PANKAJ K. SHAH)

Place : Ahmedabad PROPRIETOR

Date : 30.05.2015 M. No. 34603


Mar 31, 2014

We have audited the accompanying Financial Statements of M/s. GUJARAT NATURAL RESOURCES LIMITED (the "Company"), which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit & Loss and also the Cash Flow Statement for the year then ended and a summary of significant accounting polices and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position and financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the ''Act'') read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 consider 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.

Emphasis of Matter

We draw attention to

a) Point No. 2 at Additional Notes to Accounts in Notes – 20 regarding non-provision of doubtful debts amounting to Rs. 739.75 lacs, as a result thereof the debit balance of profit & loss A/c gets understated by the said sum and correspondingly Sundry debtors is overstated by the said sum.

b) The company has in past granted/ renewed loans and advances to certain parties which has been identified as non-performing asset. Accordingly company has not recognized any income from the same. In the opinion of the directors, the process of recovery is going on and the same is not fully doubtful of recovery. However in our opinion company needs to make provision for such long outstanding non-performing assets amounting to Rs. 206.17 lacs. Due to non-provision in this regard, the debit balance of profit & loss account is under stated and the balance of loans and advances is over stated by the said sum.

Opinion

In our opinion, and to the best of our information and according to the explanations given to us, the accompanying 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.

i) In the case of Balance Sheet, of the state of affairs of the company as at 31st March 2014.

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

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

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the companies (Auditor''s Report) (amendment) order, 2004 issued by the Central Government of India, in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said 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 accounts 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 notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 to the extent applicable.

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors of the company are prima facie disqualified as on 31st March 2014 from being appointed as Directors of the company in terms of clause (g) of Section 274(1) of the Companies Act, 1956.

ANNEXURE_TO_INDEPENDENT AUDITORS''_REPORT Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report of even date.

1. a. According to the information and explanation given to us, the fixed assets records showing full

particulars including quantitative details and situation of fixed assets are under compilation.

b. As explained to us, the fixed assets have been physically verified by the management during the year 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 physical verification.

c. In our opinion, the company has not disposed of substantial part of its fixed assets during the year and the Going Concern status of the Company is not affected.

2. (a) According to the information and explanations given to us, the Company has taken/granted

unsecured loans from/to companies covered in the Register maintained under Section 301 of the Companies Act, 1956;

(i) The company has taken interest free loan from its step down subsidiary company covered in the Register maintained u/s 301 of the Companies Act, 1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 272.01 lacs). Rs. 252.01 lacs was payable to this party as at the close of the accounting year.

(ii) (a) The company has granted interest free loan to its wholly owned and step down subsidiary company covered in the Register maintained u/s 301 of the Companies Act, 1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 5285.48 lacs). Rs. 4310.74 lacs was receivable from this party as at the close of the accounting year.

(b) The company has also granted interest free loan to One party covered in the Register maintained u/s 301 of the Companies Act, 1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 1005.23 lacs). Rs. 892.61 lacs was receivable from this party as at the close of the accounting year.

(b) According to the information and explanation given to us, the terms and conditions in respect of unsecured loans taken/granted by the Company 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 payment of principal amount are on demand.

(d) In our opinion and according to the information and explanation given to us, there are no overdue amounts in respect of the transactions listed in clause (a) above.

3. In our opinion and on the basis of test checks carried out by us, it appears that there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to purchase of fixed assets and for the sale of services. During the course of audit, we have neither come across nor have been informed of any instance of major weaknesses in aforesaid internal control procedure, which would require corrective action.

4. a. On the basis of the audit procedure performed by us and according to the information, explanation

and representation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act, have been entered in the register required to be maintained under that section.

b. In our opinion and according to the information and explanation given to us, the transaction made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time as per the information available with the company.

5. According to the information and explanation given to us, the Company has not accepted any deposits attracting the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under.

6. The company did not have any formal internal audit system during the year under review. In the opinion of the management, the existing internal control procedures are adequate and hence separate internal audit is not called for.

7. According to the information given to us by the Management, the Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for the activities of the Company.

8. (a) The company is regular in depositing with appropriate authorities undisputed statutory dues

including provident fund, investor education and protection fund, employees state insurance, income-tax, VAT, wealth tax, custom duty, Service tax, excise duty, cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, VAT, wealth tax, custom duty, service tax, excise duty, cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

9. The Company has no accumulated losses as at 31st March 2014. The company has not incurred any cash losses during the current financial year and also during immediately preceding financial year.

10. According to the records of the company and the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank during the financial year.

11. In our opinion, the company has not granted any loans and advances on the basis of security by way of pledge of shares and other securities.

12. In our opinion, the provisions of any special statute applicable to chit fund or nidhi mutual fund or mutual benefit fund/ societies are not applicable to the company.

13. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

14. As per the information and explanations given to us, the company has not given guarantees for loans taken by others from bank during the year.

15. The company has not availed any term loan facility during the year.

16. According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the company for the year under audit, prima faces no funds raised on short-term basis have been used for long term investment.

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

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

19. The company has not raised any money by way of public issues during year.

20. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

21. Clause (ii) of the aforesaid order is not applicable to the company.

FOR PANKAJ K. SHAH ASSOCIATES Firm Registration No. 107352W CHARTERED ACCOUNTANTS

(PANKAJ K. SHAH) Place : Ahmedabad PROPRIETOR Date : 30.05.2014 M. No. 34603


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying Financial Statements of M/s. GUJARAT NATURAL RESOURCES LIMITED (the "Company"), which comprise the Balance Sheet as at 31st March 2013, the Statement of Profit & Loss and also the Cash Flow Statement for the year then ended and a summary of significant accounting polices and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 consider 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.

Emphasis of Matter

We draw attention to

a) Point No. 2 at Additional Notes to Accounts in Notes - 20 regarding non-provision of doubtful debts amounting to Rs. 519.71 lacs, as a result thereof the debit balance of profit & loss A/c gets understated by the said sum and correspondingly Sundry debtors is overstated by the said sum.

b) The company has in past granted/ renewed loans and advances to certain parties which has been identified as non-performing asset. Accordingly company has not recognized any income from the same. In the opinion of the directors, the process of recovery is going on and the same is not fully doubtful of recovery. However in our opinion company needs to make provision for such long outstanding non-performing assets amounting to Rs. 168.65 lacs. Due to non-provision in this regard, the debit balance of profit & toss account is under stated and the balance of loans and advances is over stated by the said sum.

Opinion

In our opinion, and to the best of our information and according to the explanations given to us, the accompanying 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.

i) In the case of Balance Sheet, of the state of affairs of the company as at 31st March 2013.

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

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

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the companies (Auditor''s Report) (amendment) order, 2004 issued by the Central Government of India, in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said 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 accounts 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 Section 211(3C) of the Companies Act, 1956 to the extent applicable.

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors of the company are prima facie disqualified as on 31st March 2013 from being appointed as Directors of the company in terms of clause (g) of Section 274(1) of the Companies Act, 1956.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report of even date.

1. a. According to the information and explanation given to us, the fixed assets records showing full particulars including quantitative details and situation of fixed assets are under compilation.

b. As explained to us, the fixed assets have been physically verified by the management during the year 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 physical verification.

c. In our opinion, the company has not disposed of substantial part of its fixed assets during the year and the Going Concern status of the Company is not affected.

2. (a) According to the information and explanations given to us, the Company has taken/granted unsecured loans from/to companies covered in the Register maintained under Section 301 of the Companies Act, 1956;

(i) (a) The company has taken interest free loan from its step down subsidiary company covered in the Register maintained u/s 301 of the Companies Act, 1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 99.55 lacs). Rs. 99.55 lacs was payable to this party as at the close of the accounting year.

(b) The Company has taken interest free loans from Five parties covered in the aforesaid Register. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 179.09 lacs). Rs. NIL were payable to these parties as at the close of the accounting year.

(ii) (a) The company has granted interest free loan to its wholly owned subsidiary company covered in the Register maintained u/s 301 of the Companies Act, 1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 4750.70 lacs). Rs. 4510.70 lacs was receivable from this party as at the close of the accounting year.

(b) The company has also granted interest free loans to Two parties covered in the Register maintained u/s 301 of the Companies Act, 1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 465.18 lacs). Rs. 464.23 lacs was receivable from these parties as at the close of the accounting year.

(b) According to the information and explanation given to us, the terms and conditions in respect of unsecured loans taken/granted by the Company 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 payment of principal amount are on demand.

(d) In our opinion and according to the information and explanation given to us, there are no overdue amounts in respect of the transactions listed in clause (a) above.

3. In our opinion and on the basis of test checks carried out by us, it appears that there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of audit, we have neither come across nor have been informed of any instance of major weaknesses in aforesaid internal control procedure, which would require corrective action.

4. a. In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered in the Register maintained under Section 301 of the Companies Act, 1956.

b. As there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, paragraph 4(b) of the order is not applicable.

5. According to the information and explanation given to us, the Company has not accepted any deposits attracting the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under.

6. The company did not have any formal internal audit system during the year under review. In the opinion of the management, the existing internal control procedures are adequate and hence separate internal audit is not called for.

7. According to the information given to us by the Management, the Central Government has not prescribed the maintenance of cost records under Section 209(l)(d) of the Companies Act, 1956 for the activities of the Company.

8. (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, VAT, wealth tax, custom duty. Service tax, excise duty, cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, VAT, wealth tax, custom duty, service tax, excise duty, cess were in arrears, as at 31st March, 2013 for a period of more than six months from the date they became payable.

9. The company has not incurred any cash losses during the financial year under audit however the company has incurred cash loss of Rs. 13.72 lacs during the immediately preceding financial year.

10. According to the records of the company and the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank during the financial year.

11. In our opinion, the company has not granted any loans and advances on the basis of security by way of pledge of shares and other securities.

12. In our opinion, the provisions of any special statute applicable to chit fund or nidhi mutual fund or mutual benefit fund/ societies are not applicable to the company.

13. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

14. As per the information and explanations given to us, the company has not given guarantees for loans taken by others from bank during the year.

15. The company has not availed any term loan facility during the year.

16. According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the company for the year under audit, prima faces no funds raised on short-term basis have been used for long term investment.

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

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

19. The company has not raised any money by way of public issues during year.

20. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

21. Clause (ii) of the aforesaid order is not applicable to the company.



FOR PANKAD K. SHAH ASSOCIATES

Firm Registration No. 107352W

CHARTERED ACCOUNTANTS



(PANKAJ K. SHAH)

Place : Ahmedabad PROPRIETOR

Date : 30.05.2013 M. No. 34603


Mar 31, 2012

1. We have audited the attached Balance Sheet of GUJARAT NATURAL RESOURCES LIMITED Ahmedabad as at 31st March, 2012 and also the Statement of Profit and Loss and Cash Flow Statement 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.

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 from any material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of financial statement. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the companies (Auditor's Report) (amendment) order, 2004 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations which to the best of ou r 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 such books;

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

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

(e) On the basis of the written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the company are prima facie disqualified as at 31st March 2012 from being appointed as Directors of the company in terms of Clause (g) of Section 274(1) of the Companies Act,1956.

(f) In our opinion and to the best of our information and according to the explanation given to us, the attached accounts subject to the following qualificatory notes give the information required by the Companies Act, 1956 in the manner so required.

a) Point No. 2 at Additional Notes to Accounts in Notes - 20 regarding non-provision of doubtful debts amounting to Rs. 519.71 lacs, as a result thereof the debit balance of profit & loss A/c gets understated by the said sum and correspondingly Sundry debtors is overstand by the said sum.

b) The company has in past granted/ renewed loans and advances to certain parties which has been identified as non-performing asset. Accordingly company has not recognized any income from the same. In the opinion of the directors, the process of recovery is going on and the same is not fully doubtful of recovery. However in our opinion company needs to make provision for such long outstanding non-performing assets amounting to Rs. 138.65 lacs. Due to non provision in this regard, the debit balance of profit & loss account is under stated and the balance of loans and advances is over stated by the said sum.

Subject to the above qualificatory notes, the attached accounts give the information required by the Companies Act, 1956 in the manner so required and it gives a true and fair view.

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

(ii) In the case of the Statement of Profit & Loss, of the Loss of the Company for the year ended on that date.

(iii)In the case of Cash Flow Statement, of the cash flows of the company for the year ended on that date :

ANNEXURE TO THE AUDITORS' REPORT

Annexure referred to in paragraph 3 of the Auditor's report to the members of GUJARAT NATURAL RESOURCES LIMITED, on the accounts for the year ended on 31st March, 2012.

1. a. According to the information and explanation given to us, the fixed assets records showing full particulars including quantitative details and situation of fixed assets are under compilation.

b. As explained to us, the fixed assets have been physically verified by the management during the year 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 physical verification.

c. In our opinion, the company has not disposed of substantial part of its fixed assets during the year and the Going Concern status of the Company is not effected.

2. (a) According to the information and explanations given to us, the Company has taken/granted unsecured loans from/to companies covered in the Register maintained under Section 301 of the Companies Act, 1956;

(I) (a) The company has taken interest free loan from its step down subsidiary company covered in the Register maintained u/s 301 of the Companies Act, 1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 525.37 lacs). Rs. 87.55 lacs was payable to this party as at the close of the accounting year.

(b) The Company has taken interest free loans from Three parties covered in the aforesaid Register. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 26.64 lacs). Rs. 1.94 lacs were payable to these parties as at the close of the accounting year.

(ii) (a) The company has granted interest free loan to its wholly owned subsidiary company covered in the Register maintained u/s 301 of the Companies Act, 1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 4750.70 lacs). Rs. 4750.70 lacs was receivable from this party as at the close of the accounting year.

(b) The company has also granted interest free loans to Six parties covered in the Register maintained u/s 301 of the Companies Act, 1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs. 1112.10 lacs). Rs. 28.50 lacs was receivable from these parties as at the close of the accounting year.

(b) According to the information and explanation given to us, the terms and conditions in respect of unsecured loans taken/granted by the Company 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 payment of principal amount are on demand.

(d) In our opinion and according to the information and explanation given to us, there are no overdue amounts in respect of the transactions listed in clause (a) above.

3. In our opinion and on the basis of test checks carried out by us, it appears that there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of audit, we have neither come across nor have been informed of any instance of major weaknesses in aforesaid internal control procedure, which would require corrective action.

4. a. In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered in the Register maintained under Section 301 of the Companies Act, 1956.

b. As there are no transactions that need to be entered into the register maintained under section301 of the Companies Act, paragraph 4(b) of the order is not applicable.

5. According to the information and explanation given to us, the Company has not accepted any deposits attracting the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules framed there under.

6. The company did not have any formal internal audit system during the year under review. In the opinion of the management, the existing internal control procedures are adequate and hence separate internal audit is not called for.

7. According to the information given to us by the Management, the Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for the activities of the Company.

8. (a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, VAT, wealth tax, custom duty, Service tax, excise duty, cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income-tax, VAT, wealth tax, custom duty, service tax, excise duty, cess were in arrears, as at 31st March, 2012 for a period of more than six months from the date they became payable.

9. The Company has accumulated losses of Rs. 28.03 lacs at the end of the year, which is less than 50% of Net worth of the Company. Further, the company has incurred cash loss of Rs. 32.01 lacs during the financial year covered under audit. However the company has not incurred any cash loss during the immediately preceding financial year.

10. According to the records of the company and the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank during the financia year.

11. In our opinion, the company has not granted any loans and advances on the basis of security by way of pledge of shares and other securities.

12. In our opinion, the provisions of any special statute applicable to chit fund or nidhi mutual fund or mutual benefit fund/ societies are not applicable to the company.

13. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

14. As per the information and explanations given to us, the company has not given guarantees for loans taken by others form bank during the year.

15. The company has not availed any term loan facility during the year.

16. According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the company for the year under audit, prima faces no funds raised on short-term basis have been used for long term investment.

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

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

19. The company has not raised any money by way of public issues during year.

20. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

21. Clause (ii) of the aforesaid order is not applicable to the company.

FOR PANKAJ K. SHAH ASSOCIATES

Firm Registration No. 107352W

CHARTERED ACCOUNTANTS

(PANKAJ K. SHAH)

Place : Ahmedabad PROPRIETOR

Date : 04.09.2012 M. No. 34603


Mar 31, 2011

1. We have audited the attached Balance Sheet of GUJARAT NATURAL RESOURCES LIMITED Ahmadabad as at 31st March,2011 and also the Profit and Loss Account and Cash Flow Statement 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.

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 from any 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 evaluating the overall presentation of financial statement. We believe that our audit provides a reasonble basis for our opinion.

3. As required by the Companies (Auditor Report) Order,2003,as amended by the companies (Auditor's Report) (amendment) order,2004 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4.Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

(a) We have obtained all the information and explanations which to the best 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 for as appears from examination of such books;

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

(d) In our opinion, Balance Sheet and Profit and Loss account and Cash flow statement dealt with by this report comply with the Accounting Standard referred to in sub Section(3C) of section 211 of the Companies Act, 1956 to the extent applicable.

(e) On the basis of the written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the company are prima facie disqualified as at 31st March 2011 from being appointed as Directors of the company in terms of Clause (g) of Section 274(1) of the Companies Act,1956.

(f) In our opinion and to the best of our information and according to the explanation given to us, the attached accounts subject to the following qualificatory notes give the information required by the Companies Act, 1956 in the manner so required.

g) Note No.3 at Schedule - 13 regarding non-provision of doubtful debts amounting to Rs.260.46 lacs, as a result there of the debit balance of profit & loss A/c gets understated by the said sum and correspondingly Sundry debtors, doubtful of recovery not provided for is understand by the said sum.

h) The company has in past granted/renewal loans and advances to certain parties which has been Identified as non-performing asset. Accordingly company has not recognized any income from the same. In the opinion of the directors, the process of recovery is going on and the same is not fully doubtful of recovery. However in our opinion company needs to make provision for such long outstanding non-performing assets amounting to Rs.136.65 lacs. Due to non-provision in this regard, the debit balances of profit & loss account is under stated and the balance of loans and advances is over stated by the said sum.

Subject to the above qualificatory notes. the attached accounts give the information referred by the Companies Act.1956 in the manner so required and it gives a true and fair view.

1) In the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2011, and

2) In the case of the Profit & Loss Account, of the profit of the Company for the year ended on that date.

3) In the case of Cash Flow Statement, of the cash flows of the Company for the year ended on that date:

FOR PANKAJ K. SHAH ASSOCIATES

Firm Regiration No.107352W

CHARTERED ACCOUNTANTS Place : Ahmedabad

Date : 03.09.2011 (PANKAJ K.SHAH)

PROPRITOR

M.No.34603



ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in paragraph 3 of the Auditors report to the members of GUJARAT NATURAL RESOURCES LIMITED, on the accounts for the year ended on 31st March, 2011.

1.a. According to the information and explanation given to us, the fixed assets records showing full particulars Including quantitative details and situation of fixed assets are under complication.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner which in our opinions reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. c.In our opinion, the company has not disposed of substantial part of its fixed assets during the year and the going Concern status of the Company is not effected.

2.a. The Inventories lying with the company have been physically verified by the management to the extent practicable at reasonable interval during the year or at the year end.

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

c. In our opinion the company is maintaining proper records of inventories according to the records of the company the discrepancies noticed on physical verification of stocks as compared to book records were not material. 3.(a) According to the information and explanations given to us, the Company has taken/granted unsecured loans from/to companies covered in the Register maintained under Section 301 of the Companies Act,1956;

(i)(a) The company has taken loan from its wholly owned subsidiary company covered a in the Register maintained u/s 301 of the Companies Act. 1956. The amount involved (i.e. the maximum amount outstanding during the years was Rs.64.00 lacs). Rs. NIL as payable to this party as at the close of the accounting year.

(b) The Company has taken interest free loans from Four party covered in the aforesaid Register. The amount involved (i.e. the maximum amount outstanding during the year was Rs.1001.19 lacs). Rs.458.87 lacs were payable to these parties as at the close of the accounting year.

(ii)(a) The company has granted loan to its wholly owned subsidiary company covered in the Register minted u/s 301 of the Companies Act,1956. The amount involved (i.e. the maximum amount outstanding during the year was Rs.3154.50 lacs). Rs.3154.50 lacs was receivable from this party as at the close of the accounting year.

(b) The Company has granted loan to Seven parties in the Register maintained u/s 301 of the Companies Act,1956.The amount involved (i.e. the maximum amount outstanding during the year was Rs.1729.58 lacs).Rs.469.54 lacs was receivable from these parties as at the close of the accounting year.

(b) According to the information and explanation given to us, the terms and conditions in respect of unsecured loans taken by the Company 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 payment of principal amount are on demand.

(d) In our opinion and according to the information and explanation given to us, there are no over due amounts in respect of the transactions listed in clause (a) above.

4. In our opinion and on the basis of test checks carried out by us, it appears that there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of audit, we have neither come across nor have been informed of Anya instance of major weakness internal control procedure, which would require corrective action.

5.a. In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered in the Register maintained under Section 301 of the Companies Act,1956.

b. As there are no transactions that need to be entered into register ,maintained under section 301 of the Companies Act, paragraph 4(v)(b) of the order is not applicable.

6. The Company has not accepted deposits form public.

7. The Company did not have any format internal audit system during the year under review. In the opinion of the management, the existing internal control procedures are adequate and hence separate internal audit in not called for.

8. According to the information given to us by the management the Central Government has not précised the maintenance of cost records under Section 209/(1)(d) of the Companies Act, 1956 for the activities of the Company.

9.(a) The company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor and protection fund, employees state insurance. income-tax, VAT, wealth tax, custom duty, Service tax, excise duty, cess and any statutory dues applicable to it.

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

10. The Company has no accumulated losses and has not incurred any cash losses during the current financial year and in the immediately preceding financial year.

11. According to the records of the company, and the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank during the financial year.

12. In our opinion, the company has not granted any loans and advances on the basis of security by way of pledge of shares and other securities.

13. In our opinion, the provisions of any special statute applicable to chit fund or nidhi mutual fund or mutual benefit fund/societies are not applicable to the company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

15. As per the information and explanations given to us, the company during the years has not and given guarantees for loans taken by others form bank.

16. The company has not availed any term loan facility during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the company for the year under audit, prim faces no funds raised on short-term basis have been used for long term investment.

18.During the year the company has not made any prudential allotment of shares to persons covered in the maintained u/s 301 of the Act except 14285285 equity share have been issued to promoters/ non-promoters on conversion of warrants and OFCD under SEBI Guidelines on Preferential issue.

19. The company has into issued any debenture during the year.

20. The company has not raised any money by way of public issues during year.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance at fraud on or by the company as have we been informed of such case by the management.

FOR PANAKAJ K.SHAH ASSOCIATES

Firm Registration No.107352W

CHARTERED ACCOUNTANTS

Place: Ahmedabad

Date : 03.09.2011 (PANKAJ K.SHAH)

PROPRIETOR

M.No.34603


Mar 31, 2010

1. We have audited the attached Balance Sheet of GUJARAT NATURAL RESOURCES LIMITED Ahmedabad as at 31st March, 2010 and also the Profit and Loss Account and 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 as 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 weather 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 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the annexure a statement on the matters specified in paragraphs 4 & 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph 3 above, we report that:

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

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

(d) In our opinion, Balance Sheet and Profit and Loss account and Cash flow statement dealt with this report comply with the Accounting Standard referred to in sub Section 211 (3C) of the Companies Act, 1956 to the extent applicable.

(e) On the basis of the written representations received from the Directors and taken on record by ihe Board of Directors, we report that none of the Directors of the company are prima facie disqualified as at 31st March 2010 from being appointed as Directors of the company in terms of Clause (g) of Section 274(1) of the Companies Act, 1956.

(f) In our opinion and to the best of our information and according to the explanation given to us, the accounts together with the notes thereon, give the information required under the companies Act, 1956 in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India:

(i) In the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2010, and

(ii) In the case of the Profit & Loss Account, of the profit of the Company for the year ended on tha date.

(iii) In the case of Cash Flow Statement, of the cash flows of the company for the year ended on that date :

ANNEXURE TO THE AUDITORS REPORT

Annexure referred to in paragraph 3 of the Auditors report to the members of GUJARAT NATURAL RESOURCES LIMITED, on the accounts for the yearendedon 31st March, 2010.

1. a. According to the information and explanation given to us, the fixed assets records showing full particulars including quantitative details and situation of fixed assets are under complilation.

b. As explained to us, the fixed assets have been physically verified by the management during the year 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 physical verification.

c. In our opinion, the company has not disposed of substantial part of its fixed assets during the year and the Going Concern status of the Company is not effected.

2. a. The Inventories lying with the company have been physically verified by the management to the extent practicable at reasonable interval during the year or at the year end.

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

c. In our opinion the company is maintaining proper records of inventories and according to the records of the company the discrepancies noticed on physical verification of stocks as compared to book records were not material.

3. a. According to the information & explanations given to us, the Company has not granted any secured or unsecured loans to any party listed in the Register required to be maintained under section 301 of Companies Act, 1956, Accordingly clause 4(iii), (b) (c) & (d) of the order are not applicable to the company.

b. According to the information & explanations given to us, the Company has taken interest free unsecured loans from three parties to be listed in the Register required tobe maintained under section 301 of the Act. The maximum amount involved during the year was Rs. 310.05 lacs and aggregate outstanding amount of such loan at the year end was Rs. 310 lacs.

c. In our opinion, the terms and conditions of such loan Is not prima-facie prejudicial to the interest of the company.

d. In respect of the aforesaid loans, principal amount of loan are repayable on demand.

e. In respect of the aforesaid loan, there are no overdue amounts.

4. In our opinion and on the basis of test checks carried out by us, it appears that there are adequate internal control procedures commensurate with the size of the company and the nature of its business, with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of audit, we have neither come across nor have been informed of any instance of major weaknesses in aforesaid internal control procedure, which would require corrective action.

5. a. In our opinion and according to the information and explanations given to us, there are no transactions that need to be entered in the Register maintained under Section 301 of the Companies Act, 1956.

b. As there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, paragraph 4(v)(b) of the order is not applicable.

6. The Company has not accepted deposits from public.

7. The company did not have any formal internal audit system during the year under review. In the opinion of the management, the existing internal control procedures are adequate and hence separate internal audit is not called for.

8. According to the information given to us by the Management the Central Government has not prescribed the maintenance of cost records underSection 209(1)(d) of the Companies Act, 1956forthe activities of the Company.

9. According to the records of the company, we are of the opinion that the company has been regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, VAT, wealth tax, service tax, custom duty, excise duty, Excess and other statutory dues applicable to it. Based on our audit procedures and according the information and explanations given to us, and records of the company, there are not arrears of statutory dues which has remained outstanding as at 31st March 2010.

10. The company has no accumulated losses and has not incurred any cash losses during the current financial year and in the immediately preceding financial year.

11. According to the records of the company, and the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank during the financial year.

12. In our opinion, the company has not granted any loans and advances on the basis of security by way of pledge of shares and other securities.

13. In our opinion, the provisions of any special statute applicable to chit fund or nidhi mutual fund or mutual benefit fund/ societies are not applicable to the company.

14. In our opinion, the company is not a dealer or trader in shares, securities, debentures and other investments.

15. As per the information and explanations given to us, the company during the year has not given guarantees for loans taken by others from bank.

16. In our opinion, the term loans have been applied forthe purpose for which they were obtained / raised.

17. According to the information and explanations given to us and on an overall examination of the balance sheet and cash flow statement of the company for the year under audit, we report that no funds raised on short-term assets except permanent working capital.

18. The company has made preferential allotment of shares, warrants and OFCD during the year to outsider under SEBI Guidelines on Preferential Issue.

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

20. The company has not raised any money by way of public issues during year.

21. During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the company nor have we beeninformed of such case by the management.

FOR NAIMISH K. SHAH & CO. CHARTERED ACCOUNTANTS

(N.K.SHAH) PROPRIETOR

Place : Ahmedabad. Date : 04.09.2010

 
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