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Auditor Report of HB Stockholdings Ltd.

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

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

Auditor's Responsibility

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

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31 March 2015 and 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 Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the 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 information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

(c) the Balance sheet, the Statement of profit and loss and the Cash flow statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

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

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 33 to the financial statements;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

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

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

The annexure referred to in our report to the members of the company on the standalone financial statements for the year ended on 31st March, 2015, We Report that:

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

b. As explained to us, the management during the year has physically verified the fixed assets in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

2. a. As explained to us, inventories (Investments) have been physically verified by the management at reasonable interval during the year. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories (Investments) 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 inventories. As explained to us the discrepancies noticed on physical verification of inventory as compared to the book records were not material.

3. a. The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the Register maintained under section 189 of the Companies Act, 2013('the Act'). However advances in the nature of Loan has been given by company to one wholly owned subsidiary company. The outstanding recoverable as at the beginning of the year was Rs.,14,44,436/, the amount paid during the year is Rs.1,00,000/- and the amount recovered and maximum balance outstanding at any time during the year is Rs. 15,44,436/- and the year end balance is Rs. Nil.

b. The aforesaid advance granted by the Company was interest free. In our opinion and according to the information and explanations given to us, other terms and conditions of aforesaid advance was not prima facie prejudicial to the interest of the Company.

c. In respect of aforesaid advance given by the Company, there are no overdue amount as year end balance is Rs. Nil.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and sale of goods. During the year there was no sale of services. During the course of our audit, we have not observed any major weakness in the internal control system.

5. The Company has not accepted any deposits from the public.

6. The nature of the company's business/activities is such that maintenance of Cost Records under section 148(1) of the Act is not applicable to the company.

7. a. According to the records of the Company, undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales-Tax,Value added tax Wealth Tax, Customs Duty, Excise Duty,Service tax, Cess and other statutory dues to the extent and as applicable to the company have been generally regularly deposited by the company 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,2015 for a period of more than six months from the date of becoming payable.

b. The disputed statutory dues aggregating to Rs. 76,64,464/- that have not been deposited on account of matters pending before appropriate authorities are as under:

Sr. Name of the A.Y. Nature of the Dues No. statute

1. Income Tax Act, 1961 2001-02 Income Tax

2. Income Tax Act, 1961 2007-08 Income Tax

3. Income Tax Act, 1961 2008-09 Income Tax

4. Income Tax Act, 1961 2010-11 Income Tax

5. Income Tax Act, 1961 2011-12 Income Tax

Sr. Name of the Forum where Dispute Amount No. statute is pending (Rs.)

1. Income Tax Commissioner of 38,55,091/- Act, 1961 Income Tax (Appeal)

2. Income Tax Commissioner of 18,59,100/- Act, 1961 Income Tax (Appeal)

3. Income Tax Assessing officer 1,73,453/- Act, 1961

4. Income Tax Commissioner of 10,26,830/- Act, 1961 Income Tax (Appeal)

5. Income Tax Commissioner of 7,49,990/- Act, 1961 Income Tax (Appeal)

TOTAL 76,64,464/-

c. In our opinion and according to the information and explanations given to us, during the year no amount was required to be transferred to investor education and protection fund in accordance with the provisions of the Companies Act,1956.

8. The accumulated losses of the company at the end of financial year are less than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

9. Based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

10. According to the information and explanations given to us, as at the year end the Company has not given any guarantee for loans taken by others from banks or financial institutions.

11. The Company did not have any term loans outstanding during the year.

12. In our opinion and according to the information and explanation given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For P. BHOLUSARIA & CO. Chartered Accountants FRN : 000468N

Place : Gurgaon (AMIT GOEL) Dated : 21st May, 2015 PARTNER (Membership No. 092648)


Mar 31, 2014

We have audited the accompanying financial statements of HB STOCKHOLDINGS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the general circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the companies Act,2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of 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.

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT Re: HB Stockholdings Ltd. Referred to in Paragraph 1 under the heading of "Report on other legal and Regulatory Requirements" of our report of even date for the year ended 31st March, 2014

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

b. As explained to us, the management during the year has physically verified the fixed assets in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification

c. In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year that would affect going concern status of the Company.

2. a. As explained to us, inventories (Investments) have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories (Investments) 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 inventories. As explained to us the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the accounts.

3. a. The company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. However advances in the nature of Loan has been given by company to one wholly owned subsidiary company. The outstanding recoverable as at the beginning of

the year was Rs.11,69,436/, the amount paid during the year is Rs. 2,75,000/- and the maximum amount outstanding at any time during the year and year end balance is Rs.14,44,436/.The amount recoverable has been classified as sub-standard and doubtful asset and full provision thereof has been made.

b. The aforesaid advance granted by the Company is interest free. In our opinion and according to the information and explanations given to us, other terms and conditions of aforesaid advance are not prima facie prejudicial to the interest of the Company.

c. There are no stipulations in writing as to the repayment of aforesaid advance.

d. In respect of aforesaid advance given by the Company, as explained to us, there are no overdue amount, however full provision in respect of above has been made by the company.

e. The company has not taken any loan during the year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, the requirements of clause (iii) (f) and (iii) (g) of paragraph 4 of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and sale of goods. During the year there was no sale of services. During the course of our audit, we have neither come across nor we have been informed of any instance of major weakness in the aforesaid internal control system.

5. a. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered into in the register required to be maintained under that section. b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the market price prevailing at the relevant time.

6. The Company has not accepted any deposits from the public.

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

8. The nature of the company''s business/activities is such that Clause 4(viii) of the Companies (Auditor''s Report) Order 2003 regarding maintenance of Cost Records is not applicable to the company.

9. 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, Cess and other statutory dues to the extent and as applicable to the company have been generally regularly deposited by the company during the year with the appropriate authorities except for non-deposit of installments of advance tax. 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 except for non deposit of advance tax installments of Rs. 5636000/-for June & September, 2013 quarters. b. The disputed statutory dues aggregating to Rs. 77,92,043/- that have not been deposited on account of matters pending before appropriate authorities are as under:

Sr. Name of the Nature of No. statute A.Y. the Dues

1. Income Tax 2001-02 Income Tax Act, 1961

2. Income Tax 2005-06 Income Tax Act,1961

3. Income Tax 2007-08 Income Tax Act, 1961

4. Income Tax 2010-11 Income Tax Act, 1961

5. Income Tax 2011-12 Income Tax Act, 1961



Name of the statute Forum where Dispute Amount is pending (Rs.)

Income Tax Act, 1961 Commissioner of 38,55,091/- Income Tax (Appeal)

Income Tax Act, 1961 Commissioner of 3,01,032/- Income Tax (Appeal)

Income Tax Act, 1961 Commissioner of 18,59,100/- Income Tax (Appeal)

Income Tax Act, 1961 Commissioner of 10,26,830/- Income Tax (Appeal)

Income Tax Act, 1961 Commissioner of 7,49,990/- Income Tax (Appeal)

TOTAL 77,92,043/-

10. The accumulated losses of the company at the end of financial year are less than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

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

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

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies (Auditor''s Report) order 2003 is not applicable to the company.

14. The Company has maintained proper records of transactions and contracts in respect of trading (Investments) in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name except for certain shares that are pledged or given as margin or which are under process of transfer or are pending for rectification of bad deliveries.

15. The company has given guarantee in respect of loan taken from bank by one company. In the opinion of management, as explained in note no. 18 (b), the terms and conditions of guarantee given is not prejudicial to the interest of the company. However, we are unable to comment about the same.

16. The Company has not raised any term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company and considering the activities of the company, we report that there are no funds raised on short- term basis that have been used for long term investments.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. No debentures have been issued by the company and hence the question of creating securities in respect thereof does not arise.

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

21. In our opinion and according to the information and explanation given to us, no material fraud on or by the Company has been noticed or reported during the year.

FOR P. BHOLUSARIA & CO.

Chartered Accountants FRN : 000468N

Place : Gurgaon (AMIT GOEL)

Dated : 17.05.2014 PARTNER

(Membership No. 092648)


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of HB STOCKHOLDINGS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 principles generally accepted in India:

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

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT Re: HB Stockholdings Ltd.

Referred to in Paragraph 1 under the heading of "Report on other legal and Regulatory Requirements" of our report of even date for the year ended 31st March, 2013

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

b. As explained to us, the management during the year has physically verified the fixed assets in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

c. In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year that would affect going concern status of the Company.

2. a. As explained to us, inventories (Investments) have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories (Investments) 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 inventories. As explained to us the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the accounts.

3. a. The company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. However advances in the nature of Loans has been given by company to two wholly owned subsidiary companies. The outstanding recoverable as at the beginning of the year was

Rs. 518,19,436/- from them. The amount paid during the year is Rs. 1,00,000/- to one subsidiary, the maximum amount outstanding at any time during the year is Rs. 5,19,19.436/ - and year end balance is Rs.11,69,436/- in respect of one subsidiary.

b. The aforesaid advances granted by the Company are interest free. In our opinion and according to the information and explanations given to us, other terms and conditions of aforesaid advances are not prima facie prejudicial to the interest of the Company. However, amount of Rs. 4,80,00,000/- in respect of one subsidiary has been written off during the year.

c. There are no stipulations in writing as to the repayment of aforesaid advance.

d. In respect of aforesaid advance given by the Company, as explained to us, there are no overdue amounts.

e. The company has not taken any loan during the year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, the requirements of clause (iii) (f) and (iii) (g) of paragraph 4 of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and sale of goods. During the year there was no sale of services. During the course of our audit, we have neither come across nor we have been informed of any instance of major weakness in the aforesaid internal control system.

5. a. In our opinion and according to the information and explanations given to us, the particulars

of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered into in the register required to be maintained under that section. b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the market price prevailing at the relevant time.

6. The Company has not accepted any deposits from the public.

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

8. The nature of the company''s business/activities is such that Clause 4(viii) of the Companies (Auditor''s Report) Order 2003 regarding maintenance of Cost Records is not applicable to the company.

9. 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, Cess and other statutory dues to the extent and as applicable to the company have been generally regularly deposited by the company during the year with the appropriate authorities except for non-deposit of installments of advance tax. 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, 2013 for a period of more than six months from the date of becoming payable except for non deposit of advance tax installments of Rs. 4950000/-for June & Septembe, 2012 quarters.

10. The accumulated losses of the company at the end of financial year are less than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

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

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

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies (Auditor''s Report) order 2003 is not applicable to the company.

14. The Company has maintained proper records of transactions and contracts in respect of trading (Investments) in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name except for certain shares/debentures that are pledged or given as margin or which are under process of transfer or are pending for rectification of bad deliveries.

15. The company has given guarantees in respect of loans taken from bank by two companies. In the opinion of management, as explained in note no. 19 (b), the terms and conditions of guarantees given are not prejudicial to the interest of the company. However, we are unable to comment about the same.

16. The Company has not raised any term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company and considering the activities of the company, we report that there are no funds raised on short- term basis that have been used for long term investments.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. No debentures have been issued by the company and hence the question of creating securities in respect thereof does not arise.

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

21. In our opinion and according to the information and explanation given to us, no material fraud on or by the Company has been noticed or reported during the year.

FOR P. BHOLUSARIA & CO. Chartered Accountants

FRN : 000468N

Place: Gurgaon (AMIT GOEL)

Dated:17th May, 2013 PARTNER

(Membership No. 92648)


Mar 31, 2012

We have audited the attached Balance Sheet of M/s. HB STOCKHOLDINGS LIMITED as at 31st March, 2012, the statement of Profit and Loss and the 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.

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 material misstatements. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement presentation. 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.

1. As required by Companies (Auditor's Report) Order, 2003 issued by the Central Government of India 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 to the extent applicable.

2. Further to our comments in the Annexure referred to in paragraph 1 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 purpose of our audit.

b) In our opinion proper books of account as required by law have been kept by the company so far, as appears from our examination of the said books;

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

d) In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement comply with the accounting Standards referred to in Sub Section (3C) of section 211 of the Companies Act, 1956.

e) As informed and explained to us, none of the directors of the company is disqualified as on 31st March, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes thereon (particularly Note No.9.8 and Note No.31) give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

a) In the case of the Balance Sheet of the State of Affairs of the Company as at 31st March, 2012 and

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

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

ANNEXURE TO AUDITORS' REPORT Re: HB Stockholdings Ltd.

Referred to in Paragraph 1 of our report of even date for the year ended 31st March,2012

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

b. As explained to us, the management during the year has physically verified the fixed assets in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and 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 fixed assets during the year that would affect going concern status of the Company.

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

b. In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories (Investments) 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 inventories. As explained to us the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the accounts.

3. a. The company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. However advances in the nature of Loans amounting to Rs. 5,18,19,436/- is outstanding recoverable as at the year end from two companies, both wholly owned subsidiaries of the company. The amount granted during the year is Rs. 1,51,32,511/ - and maximum amount outstanding during the year was Rs. 5,18,19,436/-

b. The aforesaid advances granted by the Company are interest free. In our opinion and according to the information and explanations given to us, other terms and conditions of aforesaid advances are not prima facie prejudicial to the interest of the Company.

c. There are no stipulations in writing as to the repayment of aforesaid advances.

d. In respect of aforesaid advances given by the Company, as explained to us, there are no overdue amounts.

e. During the earlier year the company had taken loan of Rs. 9, 00,00,000 /- from one company listed in the register maintained under section 301 of the Companies Act, 1956,which has been repaid back during the year. The maximum amount involved during the year was Rs. 9,00,00,000/- and outstanding as at the year-end is Rs. NIL/-.

f. The rate of interest and other terms and conditions of this loan are, in our opinion, prima facie not prejudicial to the interest of the company

g. The payment of principal amounts and interest in respect of such loan had been regular/as per stipulation.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and sale of goods. During the year there was no sale of services. During the course of our audit, we have neither come across nor we have been informed of any instance of major weakness in the aforesaid internal control system.

5. a. In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered into in the register required to be maintained under that section.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the market price prevailing at the relevant time..

6. The Company has not accepted any deposits from the public.

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

8. The nature of the company's business/activities is such that Clause 4(viii) of the Companies (Auditor's Report) Order 2003 regarding maintenance of Cost Records is not applicable to the company.

9. 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, Cess and other statutory dues to the extent and as applicable to the company have been generally regularly deposited by the company 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. The disputed statutory dues aggregating to Rs. 82,53,941/- that have not been deposited on account of matters pending before appropriate authorities are as under:

Sr. Name of the Nature of Forum where Dispute Amount No. statute A.Y. the Dues is pending (Rs.)

1. Income Tax 2001-02 Income Tax Commissioner of 38,55,091/- Act, 1961 Income Tax (Appeal)

2. Income Tax 2002-03 Income Tax Commissioner of 24,10,470/- Act, 1961 (Penalty) Income Tax (Appeal)

3. Income Tax 2005-06 Income Tax Commissioner of 8,94,298/- Act, 1961 (Penalty) Income Tax (Appeal)

4. Income Tax 2006-07 Income Tax Commissioner of 10,94,082/- Act, 1961 (Penalty) Income Tax (Appeal)

TOTAL 82,53,941/-

10. The accumulated losses of the company at the end of financial year are less than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

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

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

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies (Auditor's Report) order 2003 is not applicable to the company.

14. The Company has maintained proper records of transactions and contracts in respect of trading (Investments) in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name except for certain shares/debentures that are pledged or given as margin or which are under process of transfer or are pending for rectification of bad deliveries.

15. The company has given guarantees in respect of loans taken from bank by two companies. In the opinion of management, as explained in note no. 19 (b), the terms and conditions of guarantees given are not prejudicial to the interest of the company. However, we are unable to comment about the same.

16. The Company has not raised any term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company and considering the activities of the company, we report that the funds raised on short- term basis have not been used for long term investments.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. No debentures have been issued by the company and hence the question of creating securities in respect thereof does not arise.

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

21. In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

FOR P. BHOLUSARIA & CO.

Chartered Accountants

FRN : 000468N

Place : Gurgaon (AMIT GOEL)

Dated : 25th May, 2012 PARTNER

(Membership No. 92648)


Mar 31, 2011

We have audited the attached Balance Sheet of M/s. HB STOCKHOLDINGS LIMITED 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 companys Management .Our responsibility is to express an opinion on these financial statements based on our audit.

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 material misstatements. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statement presentation. 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.

1. As required by Companies (Auditors Report) Order, 2003(as amended) issued by the Central Government of India 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 to the extent applicable.

2. Further to our comments in the Annexure referred to in paragraph 1 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 purpose of our audit.

b) In our opinion proper books of account as required by law have been kept by the company so far, as appears from our examination of the said books;

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement comply with the accounting Standards referred to in Sub Section (3C) of section 211 of the Companies Act, 1956.

e) As informed and explained to us, none of the directors of the company is disqualified as on 31st March, 2011 from being appointed as director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes thereon (particularly Note No.7 &14) give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:- a) In the case of the Balance Sheet of the State of Affairs of the Company as at 31st March, 2011 and

b) In the case of the Profit & Loss account of the Profit for the year ended on that date and

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

ANNEXURE TO AUDITORS REPORT Re: HB Stockholdings Ltd. Referred to in Paragraph 1 of our report of even date for the year ended 31st March,2011

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

b. As explained to us, the management during the year has physically verified the fixed assets in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and 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 fixed assets during the year that would affect going concern status of the Company.

2. a. As explained to us, inventories (Investments) have been physically verified by the

management at reasonable intervals during the year.

b. In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories (Investments) 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 inventories. As explained to us the discrepancies noticed on physical verification of inventory as compared to the book records were not material and have been properly dealt with in the accounts.

3. a. The company has not granted any loans, secured or unsecured to companies, firms

or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. However advances in the nature of Loans amounting to Rs. 3,67,34,436/- were outstanding recoverable as at the year end from two parties, both wholly owned subsidiaries of the company. The amount granted during the year was Rs.3,50,95,000/- and maximum amount outstanding during the year was Rs.3,67,34,436/- b. The aforesaid advances granted by the Company are interest free. In our opinion and according to the information and explanations given to us, other terms and conditions of aforesaid advances are not prima facie prejudicial to the interest of the Company.

c. There are no stipulations in writing as to the repayment of aforesaid advances. As explained to us, the same is repayable on demand.

d. In respect of aforesaid advances given by the Company, since these are repayable on demand, therefore the question of over due amounts does not arise.

e. During the earlier year the company had taken loan of Rs.9, 00,00,000 /- from one company listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and outstanding as at the year-end is Rs.9, 00,00,000/-.

f. The rate of interest and other terms and conditions of this loan are, in our opinion, prima facie not prejudicial to the interest of the company

g. The payment of principal amounts and interest in respect of such loan is regular/as per stipulation.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and sale of goods. During the year there was no sale of services. During the course of our audit, we have neither come across nor we have been informed of any instance of major weakness in the aforesaid internal control system.

5. a. In our opinion and according to the information and explanations given to us, the

particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered into in the register required to be maintained under that section. b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the market price prevailing at the relevant time..

6. The Company has not accepted any deposits from the public.

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

8. The nature of the companys business/activities is such that Clause 4(viii) of the Companies (Auditors Report) Order 2003 regarding maintenance of Cost Records is not applicable to the company.

9. 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, Cess and other statutory dues to the extent and as applicable to the company have been generally regularly deposited by the company during the year with the appropriate authorities except for non deposit of installments of advance income tax. 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 except for Rs. 18,90,000 /- on account of advance tax installment for June & September,2010 quarters. b. The disputed statutory dues aggregating to Rs.2,44,13,018/- that have not been deposited on account of matters pending before appropriate authorities are as under:

Sr. Name of the Nature of Forum where Dispute Amount No. statute A.Y. the Dues is pending (Rs.)

1. Income Tax 2001-02 Income Tax Commissioner of 38,55,091/- Act, 1961 Income Tax (Appeal)

2. Income Tax 2005-06 Income Tax Income Tax 2,64,920/- Act,1961 Appellate Tribunal

3. Income Tax 2006-07 Income Tax Income Tax 14,82,410/- Act,1961 Appellate Tribunal

4. Income Tax 2008-09 Income Tax Commissioner of 31,97,443/- Act, 1961 Income Tax (Appeal)

5. Income Tax 1994-95 Income Tax Commissioner of 1,56,13,154/- Act,1961 Income Tax (Appeal)

TOTAL 2,44,13,018/-

10. The accumulated losses of the company at the end of financial year are less than fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit or in the immediately preceding financial year.

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

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

13. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause 4(xiii) of the Companies (Auditors Report) order 2003 is not applicable to the company.

14. The Company has maintained proper records of transactions and contracts in respect of trading (Investments) in securities, debentures and other investments and timely entries have been made therein. All shares, debentures and other investments have been held by the Company in its own name except for certain shares/debentures that are pledged or given as margin or which are under process of transfer or are pending for rectification of bad deliveries.

15. The company has given guarantees in respect of loans taken from bank by two companies under the same management. In the opinion of management, as explained in note no.2(b) of Schedule12", the terms and conditions of guarantees given are not prejudicial to the interest of the company. However, we are unable to comment about the same.

16. The Company has not raised any term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company and considering the activities of the company, we report that the funds raised on short- term basis have not been used for long term investments.

18. During the year, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. No debentures have been issued by the company and hence the question of creating securities in respect thereof does not arise.

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

21. In our opinion and according to the information and explanation given to us, no fraud on or by the Company has been noticed or reported during the year.

FOR P. BHOLUSARIA & CO. Chartered Accountants FRN : 000468N

Place:Gurgaon (AMIT GOEL) Dated:28th May, 2011 PARTNER (Membership No. 92648)

 
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