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Auditor Report of Hardcastle & Waud Manufacturing Company Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Hardcastle And waud manufacturing company limited ("the company) which comprise the Board sheet as at 31st March 2015 the statement of profit and loss and the cash flow statement for the year ended an a summary of the significant accounting policies and other and a summary of information.

Management's Responsibility for the Standalone Financial Statements

The company Board of Directors is responsible that give a true for the matters stated in section 134(5) of the company's Act,2013 ("the Act") with respect to the preparation of these financial statements that give s true and fair view of the financial position financial performance and cash flows of the company in accordance with the accounting principle generally accent Performance and flows of the Company if with Rule 7ofthe Companies the Act, provisions of the Act for safeguarding of maintenance of adequate accounting records in accordance with the expropriate accounting policies;

Auditor responsibility

Out responsibly, is to option or, the standalone statements basso on out and audit.

We believe that the audit evidence we have obtained is sufficient, and appropriate to provide a basis for our audit, financial statements based on our audit. opinion on the financial statements obtain reassurance assurance about where her the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amount and the disclosure in the financial statements The procedures fraud or error in making those risk assessments the auditor considers the internal financial control misstatement of the financial statements whether due to fraud 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 where her the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness made by companies Directors as well as evaluating the overall presentation of the financial statements.

Opinion

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

Report on Other Legal and Regulatory Requirements

1. As required by the compare (Auditors Report) order 2015 ("the Order) issued by the central Governance of India in items of sub section (11) of section 143 of the companies Act, 2013 we give in the Annexure a statements on the matters specified in paragraph 3 and 4 of the order to the extent applicable.

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

(a) We have sought and obtained all the in dormancy and explanation 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 it appears from our examination of those books

(c) The Balance sheet statements of profit and loss and cash flow statements dealt with by this report are in agreement with the books of account

(d) In our opinion the aforesaid financial statements company with the applicable accounting standards specified under section 133 of the Act, read with Rule 7 of the companies (Account) Rules 2014:

(e) On the basis of written representations received from the directors as on March 31, 2015 and taken on records by the board of Directors none of the directors is disqualified as on March 31.2015 from being applicable as a director in items of section 164(2) of the act.

(f) In our opinion to the best of our information explanations given to us, we report as under with respect to other matters to be included in the Auditor s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014

i, The Company does not have any pending litigations which would impact its financial position :

ii. The Company does not have any long term control including derivative contracts: as such the question of does not arise:

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund.

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

Ref.: HARDCASTLE AND WAUD MANUFACTURING COMPANY LIMITED

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

(b) All the assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification.

ii. (a) The management has conducted physical verification of inventories at reasonable intervals.

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

(c) The company is maintaining proper records of inventories and no discrepancies were noticed on verification between the inventories and the book records.

iii. The Company has not granted loans, secured or unsecured to firms, companies or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 and hence the provisions of clause (iii) (a) and (b) of paragraph 3 of the Companies (Auditor's Report) Order, 2015 are not applicable to the Company.

iv, In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of fixed assets and goods and sale of goods and services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weakness has been noticed in the internal controls.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from pubic within the meaning of Sections 73 to 76 of the Companies Act, 2013 and the rules framed there under.

vi. The Central Government has not prescribed the maintenance of cost records under section 148(1) of the Act, for any of the activities of the Company.

vii. a) According to the information and explanation given to us and on the basis of our examination of records of the Company amounts deducted/ accrued in the books of account in respect of 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 have generally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable.

b) Details of dues of Sales tax and Excise Duty which have not been deposited as on 31st March, 2015 on account of disputes are given below.

Nature of Dues Forum where dispute is pending Period to which the Amount relates Amount Involved (in Rs.)

Central Excise Commissioner of Central Excise (Appeals), Mumbai 1997-1998 9,58,855

Sales Tax Deputy Comm. of ST (Appeals-I). Mumbai 2000-2001 2,67,492

Sales Tax Sales Tax Officer, Mumbai 2004-2005 3,30,744

Sales Tax Deputy Comm. of ST (Appeals-l).Chennai 2002-2011 3,93,095

Total 19,50,186

c) According to the information and explanations given to us, there were no amounts which were required to be transferred to the Investor Education and Protection Fund.

viii. The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

ix. The Company has not taken any loan or issued debentures.

x. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for the loans taken by others from banks or financial institutions during the period covered by audit.

xi. In our opinion and according to the information and explanations given to us, the Company has not taken any term loan

xii. According to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For GMJ & Co

Chartered Accountants

Firm's Regn. No. 103429W

CA Atul Jain

Place: Mumbai Partner

Date: 13th May, 2015 M- No 037097


Mar 31, 2014

C) The Company has maintained proper records of inventory and as explained to us, the discrepancies noticed on physical verification of the inventory were not material;

iii) a) As informed to us, the Company has not granted any unsecured loans during the year to companies firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956;

b) The Company has taken unsecured loans aggregating to Rs. 236.00 lacs during the year from a company covered in the register maintained under Section 301 of the Companies Act, 1956;

c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company;

d) The payments of the principal amounts and interest thereon are regular;

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in the internal control system;

v) a) According to the information and explanations given to us, all transactions during the year that needed to be entered in the register maintained u/s 301 of the Companies Act, 1956 have been so entered;

b) According to the information and explanations given to us, these transactions have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available;

vi) The Company has not accepted any deposits from the public;

vii) The Company has not appointed independent internal auditors during the year. However, in our opinion the internal audit system is commensurate with the size and nature of its business;

viii) As there was no manufacturing activity during the year the Company was not required to maintain cost records;

ix) a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund.

Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other statutory dues have been generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable;

b) Disputed Statutory dues aggregating to ? 21.17 lacs that have not been deposited on account of disputes and matters pending before appropriate authorities are as under:-

Nature of Dues Forum where dispute Amount Involved is Pending (Rs. Lacs)

Central Excise Commissioner of Central Excise (Appeals), Mumbai 10.42

Central Excise CESTAT. Mumbai 1.13

Sales Tax Deputy Comm of ST (Appeals-I), Mumbai 2.42

Sales Tax Sales Tax Officer Mumbai 3.06

Sales Tax Sales Tax Tribunal, Kolkata 0.42

Sales Tax Deputy Comm of ST (Appeals-CT-I) Chennai 3.72

x) The Company has no accumulated losses and it has incurred cash loss during the financial year under report and also in the immediately preceding financial year;

xi) There are no borrowings from Banks/financial institutions:

xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans on the basis of security by way of pledge of shares, debentures or other securities;

xiii) The Company is not a nidhi/ mutual benefit fund/society;

xiv) According to the information and explanations given to us, proper records have been maintained by the Company of dealing and trading in shares, securities and other investments etc. and timely entries have been made therein The securities are held by the Company in its own name;

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

xvi) According to the information and explanations given to us, no term loans were obtained by the Company during the year;

xvii) In our opinion, according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment;

xviii) The Company has not made any allotment of shares during the year:

xix) According to the information and explanations given to us, the Company has not issued any debentures during the year and hence the question of creating security or charge therefor does not arise;

xx) During the year under report, no public issue has been made by the Company:

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 has been noticed or reported during the course of our audit.

For Khare and Company Chartered Accountants (FRN 105100 W)

Y. P. Shukla Place : Mumbai Proprietor Date : 30th May 2014 Membership No. 16203


Mar 31, 2012

1. We have audited the attached Balance Sheet of Hardcastle & Waud Mfg. Co. Ltd as at 31st March 2012 and also the Profit & Loss Account and the Cash Flow Statement annexed hereto for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the aforesaid Annexure 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, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from the branches;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the 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 our review of the confirmations made available to us from the companies in which the directors of the Company are directors and the information and explanations given to us, none of the directors of the Company is prima facie as at 31 st March 2012 disqualified from being appointed as director of the Company under 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 give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS' REPORT TO THE MEMBERS OF HARDCASTLE & WAUD MFG CO. LTD ON THE ACCOUNTS FOR THE YEAR ENDED 31 ST MARCH 2012

We state that: -

i) a) The Company has maintained proper records showing particulars including quantitative details and situation of fixed assets acquired subsequent to 1st January 1973. Records prior to that date are reported to be destroyed by fire;

b) As explained to us, the aforesaid fixed assets have been physically verified by the Management at the end of the year and it has been reported to us that the discrepancies noticed on such verification have been properly accounted for;

c) The Company has disposed off its Freehold Land at Kalyan during the year. However it has not disposed off a substantial part of its fixed assets during the year;

ii) a) It is reported that the inventory has been physically verified by the management at the end of the year;

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 the nature of its business;

c) The Company has maintained proper records of inventory and as explained to us, the discrepancies noticed on physical verification of the inventory were not material;

iii) a) The Company has granted unsecured loans aggregating to Rs. 92.45 lacs during the year to a company covered in the register maintained under section 301 of the Companies Act, 1956;

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company;

c) The Company has taken unsecured loans aggregating to Rs. 56.00 lacs during the year from a company covered in the register maintained under Section 301 of the Companies Act, 1956;

d) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company;

e) The payments of the principal amounts and interest thereon are regular;

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in the internal control system;

v) a) According to the information and explanations given to us, all transactions during the year that needed to be entered in the register maintained U/s 301 of the Companies Act, 1956 have been so entered;

b) According to the information and explanations given to us, these transactions have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available;

vi) The Company has not accepted any deposits from the public;

vii) The Company has not appointed independent internal auditors during the year. However, in our opinion the internal audit system is commensurate with the size and natuie of its business;

viii) The Company is not required to maintain cost records in respect of the goods manufactured during the year;

ix) a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other statutory dues have been generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2012 for a period of more than six months from the date of becoming payable;

b) Disputed Statutory dues aggregating to Rs. 40.77 lacs that have not been deposited on account of disputes and matters pending before appropriate authorities are as under:-

Nature of Dues Forum where dispute is Pending Amount Involved Rs. Lacs

Central Excise Commissioner of Central Excise 10.42 (Appeals), Mumbai

Central Excise CESTAT, Mumbai 1.13

Sales Tax Deputy Comm of ST (Appeals-I), 2.42 Mumbai

Sales Tax Sales Tax Officer Mumbai 20.17

Sales Tax Sales Tax Tribunal, Kolkata 3.55

Sales Tax Deputy Comm of ST (Appeals-CT-I), 3.08 Chennai

x) The Company has no accumulated losses and has not incurred cash loss during the financial year under report or the immediately preceding financial year;

xi) There are no borrowings from Banks/financial institutions:

xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans on the basis of security by way of pledge of shares, debentures or other securities;

xiii) The Company is not a nidhi/ mutual benefit fund/society;

xiv) According to the information and explanations given to us, proper records have been maintained by the Company of dealing and trading in shares, securities and other investments etc. and timely entries have been made therein .The securities are held by the Company in its own name;

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

xvi) According to the information and explanations given to us, no term loans were obtained by the Company during the year;

xvii) In our opinion, according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment;

xviii)According to the information and explanations given to us, the Company has allotted 67500 Equity shares of X 10 each to the holder of 0% Unsecured Compulsorily Convertible Debentures during the year at a premium of Rs. 1101.11 per share:

xix) According to the information and explanations given to us, the Company has not issued any debentures during the year and hence the question of creating security or charge therefor does not arise;

xx) During the year under report, no public issue has been made by the Company However the Company has allotted 67500 Equity shares of Rs. 10 each to the holder of 0% Unsecured Compulsorily Convertible Debentures during the year at a premium of Rs. 1101.11 per share:

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 has been noticed or reported during the course of our audit.

For Khare & Co.

Chartered Accountants

(FRN:105100W)

Y. P. ShuKla

Place: Mumbai Proprietor

Date: 11th August, 2012 Membership no 16203


Mar 31, 2011

1. We have audited the attached Balance Sheet of Hardcastle & Waud Mfg. Co. Ltd as at 31st March 2011 and also the Profit & Loss Account and the Cash Flow Statement annexed thereto for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the aforesaid Annexure 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, Profit & Loss Account and Cash Flow Statement

dealt with by this report are in agreement with the books of account and with the returns received from the branches;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the 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 our review of the confirmations made available to us from the companies in which the directors of the Company are directors and the information and explanations given to us, none of the directors of the Company is prima facie as at 31st March 2011 disqualified from being appointed as director of the Company under Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

f) Attention is invited to Note No 22 of Schedule M, regarding increase in depreciation-due to redetermination of life of certain Fixed Assets by the management during the year and consequently the depreciation for the year is higher by TI.19 lacs and Profit on sale of Assets is higher by Rs. 4.78 lacs and thereby, the amount of Profit for the year, Surplus shown under Reserves and Surplus and of Fixed Assets are lower by Rs. 2.41 lacs;

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

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

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS' REPORT TO THE MEMBERS OF HARDCASTLE & WAUD MFG CO. LTD ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2011

We state that: -

i) a) The Company has maintained proper records showing particulars including quantitative details and situation of fixed assets acquired subsequent to 1sl January 1973. Records prior to that date are reported to be destroyed by fire;

b) As explained to us, the aforesaid fixed assets have been physically verified by the Management at the end of the year and it has been reported to us that the discrepancies noticed on such verification have been properly accounted for;

c) The Company has made a provision for impairment of certain fixed assets as also discarded unusable fixed assets valued at Rs. 39.96 lacs during the year. However it has not disposed off a substantial part of its fixed assets during the year;

ii) a) It is reported that the inventory has been physically verified by the management at the end of the year;

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 the nature of its business;

c) The Company has maintained proper records of inventory and as explained to us, the discrepancies noticed on physical verification of the inventory were not material;

iii) a) The Company has granted unsecured loans aggregating to Rs.801.40 lacs during the year to a company covered in the register maintained under section 301 of the Companies Act, 1956;

b) In our opinion and according to the information and explanations given to us. the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company;

c) The Company has taken unsecured loans aggregating to Rs. 2.50 lacs during the year from a company covered in the register maintained under Section 301 of the Companies Act, 1956;

d) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company;

e) The payments of the principal amounts and interest thereon are regular;

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in the internal control-system;

v) a) According to the information and explanations given to us, all transactions during the year that needed to be entered in the register maintained U/s 301 of the Companies Act, 1956 have been so entered;

b) According to the information and explanations given to us, these transactions have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available;

vi) The Company has not accepted any deposits from the public;

vii) The Company has not appointed independent internal auditors for part of the year. However, in our opinion the internal audit system is commensurate with the size andnature of its business;

viii) The Company is not required to maintain cost records in respect of the goods manufactured during the year;

ix) a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other statutory dues have been generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2011 for a period of more than six months from the date of becoming payable;

b) Disputed Statutory dues aggregating to Rs. 42.24 lacs that have not been deposited on account of disputes and matters pending before appropriate authorities are as under: -

Nature of Dues Forum where dispute Amount is Pending Rs. Lacs Involed

Central Excise Commissioner of Central Excise (Appeals), Mumbai 10.42

Central Excise CESTAT, Mumbai 1.13

Sales Tax Deputy Comm of ST (Appeals-I), Mumbai 2.42

Sales Tax Sales Tax Officer Mumbai 20.83

Sales Tax Sales Tax Tribunal, Kolkata 3.55

Sales Tax Sales Tax Tribunal, Chennai 0.81

Sales Tax Deputy Comm of ST (Appeals-CT-I), Chennai 3.08

x) The Company has no accumulated losses and has not incurred cash loss during the financial year under report or the immediately preceding financial year;

xi) According to the information and explanations given to us, the Company has not made any default in repayment of dues to banks. There are no borrowings from Banks/financial institutions. The Company had issued 0% Compulsorily Convertible Debentures of Rs. 7.50 crores during the year 2009-10. The stipulated date of conversion was 8th May 2011;

xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans on the basis of security by way of pledge of shares, debentures or other securities;

xiii) The Company is not a nidhi/ mutual benefit fund/society;

xiv) According to the information and explanations given to us, proper records have been maintained by the Company of dealing and trading in shares, securities and other investments etc. and timely entries have been made therein ;The securities are held by the Company in its own name;

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

xvi) According to the information and explanations given to us, no term loans were obtained by the Company during the year;

xvii) In our opinion, according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment;

xviii) According to the information and explanations given to us, the Company has not made any allotment of shares during the year;

xix) According to the information and explanations given to us, the Company had during an earlier year issued 0% Unsecured Compulsorily Convertible Debentures and hence the question of creating security or charge therefor does not arise;

xx) During the year under report, no public issue has been made by the Company;

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 has been noticed or reported during the course of ouraudit.

For Khare & Co. Chartered Accountants (FRN:105100W)

Y.P. Shukla Proprietor Membership No 16203

Place : Mumbai Date : 5th August, 2011


Mar 31, 2010

1. We have examined the attached Balance Sheet of Hardcastle & Waud Mfg. Co. Ltd as at 31s1 March 2010 and also the Profit & Loss Account and the Cash Flow Statement annexed thereto for the year ended on that date. 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 the auditing standards generally accepted in India. These 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 bgsis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the aforesaid Annexure 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, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from the branches;

d) In our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 21.1 of the Companies Act, 1956;

e) On the basis of our review of the confirmations made available to us from the companies in which the directors of the Company are directors and the information and explanations given to us, none of the directors of the Company is prima facie as at 31sl March 2010 disqualified from being appointed as director of the Company under 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 give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS REPORT TO THE MEMBERS OF HARDCASTLE & WAUD MFG CO. LTD ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2010

We state that: -

i) a) The Company has maintained proper records showing particulars including quantitative details and situation of fixed assets acquired subsequent to 1sl January 1973. Records prior to that date are reported to be destroyed by fire;

b) As explained to us, the aforesaid fixed assets have been physically verified by the Management at the end of the year and it has been reported to us that no material discrepancies have been noticed on such verification;

c) The Company has not disposed off a substantial part of its fixed assets during the year:

ii) a) It is reported that the inventory has been physically verified by the management at the end of the year;

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 the nature of its business;

c) The Company has maintained proper records of inventory and as explained to us, the discrepancies noticed on physical verification of the inventory were not material;

iii) a) The Company has granted unsecured loans aggregating to Rs. 706.60 lacs during the year to two companies covered in the register maintained under section 301 of the Companies Act, 1956;

b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and.conditions of such loans are not prima facie prejudicial to the interest of the Company;

c) The Company has taken unsecured loans aggregating to Rs. 5.30 lacs during the year from a company covered in the register maintained under Section 301 of the Companies Act, 1956;

d) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company;

e) The payments of the principal amounts and interest thereon are regular;

iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in the internal control system;

v) a) According to the information and explanations given to us, all transactions during the yearthat needed to be entered in the register maintained U/s 301 of the Companies Act, 1956 have been so entered;

b) According to the information and explanations given to us, these transactions have been made at prices which are reasonable having regard to prevailing market prices at the relevant time where such market prices are available; vi) The Company has not accepted any deposits from the public;

vii) In our opinion the internal audit system of the Company is commensurate with its size and the nature, of its business;

viii) We have broadly reviewed the books of accounts and other records maintained by the Company in respect of Synthetic Resins where pursuant to the Rules made by the Central Government, the maintenance of cost records has been prescribed under section 209 (1) (d) of the Companies Act, 1956. As during the year there was no production of Synthetic Resins.no cost records were required to be maintained;

ix) a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other statutory dues have been-generally regularly deposited during the year with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31sMarch, 2010 for a period of more than six months from the date of becoming payable;

b) Disputed Statutory dues aggregating to Rs. 40.78 lacs that have not been deposited on account of disputes and matters pending before appropriate authorities are as under:-

Nature of Dues Forum where dispute is Pending Amount Involved Rs.Lacs

Central Excise Commissioner of Central Excise 11.52

(Appeals), Mumbai

Central Excise CESTAT, Mumbai 1.13

Sales Tax Deputy Comm of ST (Appeals-I), Mumbai 2.67

Sales Tax Sales Tax Officer Mumbai 20.08

Sales Tax Sales Tax Tribunal, Kolkata 0.52

Sales Tax Sales Tax Tribunal, Chennai 1.46

Sales Tax Deputy Comm of ST (Appeals-CT-I) 3.08

Chennai

Sales Tax Sales Tax Officer, Vapi 0.32



x) The Company has no accumulated losses and has not incurred cash loss during the financial year under report or the immediately preceding financial year;

xi) According to the information and explanations given to us, the Company has not made any default in repayment of dues to banks. There are no borrowings from financial institutions. The Company has issued compulsorily 0% Convertible Debentures of Rs 7.50 crores during the year. The stipulated date of its conversion is 8th May 2011;

xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans on the basis of security by way of pledge of shares, debentures or other securities;

xiii) The Company is not a nidhi/ mutual benefit fund/society;

xiv) According to the information and explanations given to us, proper records have been maintained by the Company of dealingand trading in shares, securities and otherjnvestments etc. and timely entries have been made therein ;The securities are held by the Company in its own name;

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

xvi) According to the information and explanations given to us, no term loans were obtained by the company during the year;

xvii) In our opinion, according to the information and explanations given to us, " and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment;

xviii) According to the information and explanations given to us, the Company has not made any allotment of shares during the year;

xix) According to the information and explanations given to us, the Company has during the year issued 0% Unsecured compulsorily Convertible Debentures and hence the question of creating security or charge therefor does not arise;

xx) During the year under report, no public issue has been made by the Company;

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 has been noticed or reported during the course of our audit.



For Khare & Co.

Chartered Accountants

(FRN:105100W)

Y.P. Shukla

Place: Mumbai Proprietor

Date :3rd August, 2010 Membership No 16203

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