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Auditor Report of Ishan Dyes & Chemicals Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Ishan Dyes & Chemicals Limited ('the Company'), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management's responsibility for the Financial Statement

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 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 (as amended). 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.

3. Auditors' Responsibility

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

b. 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.

c. 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.

d. 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 controls relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, 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.

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

4. 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, 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.

5. 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 paragraphs 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 purpose of our audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so faras 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards specified under Section 133 of the Companies Act,2013 read with the Rule 7 of the Companies (Accounts) Rules, 2014(as amended);

e. On the basis of the written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015, 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 as referred to in note no. 31 ;

(ii) the Company did not have any long-term contracts including derivative contracts which may lead to foreseeable losses;

(iii) the Company does not have any dues that are required to be transferred to the Investor Education and Protection Fund.

Annexure to the Independent Auditors' Report of even date to the members of Ishan Dyes & Chemicals Ltd. on the financial statements for the year ended 31st March 2015.

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

I. In respect of fixed assets :

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

(b) The fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies between book records and the physical inventories have been noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.

II. In respect of inventories :

(a) The inventories have been physically verified at reasonable intervals by the management.

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

(c) The Company has maintained proper records of inventories. As per the information and explanation given to us, no material discrepancies were noticed on physical verification

III. The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

IV. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets, purchase of inventory and sale of goods. During the course of our audit no major weakness has been noticed in the internal controls. We have not observed any failure on the part of the company to correct major weakness in internal control system.

V. The company has not accepted any deposits under the provisions of section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under and as such the question of compliance under the Companies Act or any other directives or orders does not arise.

VI. On the basis of records produced we are of the opinion that prima facie cost records and accounts prescribed by the Central Government under sub section (1) of section 148 of the Companies Act, 2013 in respect of products of 'the company' covered under the rules under said section have been made and maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

VII. In respect of statutory dues:

(a) According to the information and explanations give to us, the Company in general is regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues 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 March 31, 2015 for a period of more than six months from the date of becoming payable

(b) The dues outstanding in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, duty of Customs, Duty of Excise, Value Added Tax and Cess which have not been deposited as on March 31, 2015 on account of disputes are given below:

Name of the Statue Nature of dues Amount (Rs. in Lacs)

Income Tax Act Penalty u/s Not determined 271 (1) (b)

Income Tax Act Short payment 4.92 and Interest u/s 201(1A)

Name of the Statute Period to which the Forum where dispute amount relates is pending

Income Tax Act AY 2011-12 DCIT, Circle-3, Baroda

Income Tax Act AY 2015-16 ITO (TDS)- Anand

(c) There were no amount which were required to be transferred to the Investor Education and Protection Fund by the Company in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

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

IX. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or a bank or to debenture-holders during the year.

X. The Company has not given guarantees for loans taken by others from banks and financial institutions.

XI. In our opinion, the Company has applied the term loans for the purposes they were obtained when specified.

XII. In our opinion 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.

Place: Ahmedabad For, G S MATHUR & CO Date: 9th May, 2015 Chartered Accountants Bhargav Vaghela Partner Membership No.124 619 F.R.N.: 008744N




Mar 31, 2014

We have audited the attached Balance Sheet of ISHAN DYES & CHEMICALS LIMITED, as at March 31st, 2014, and the related profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company''s management Our responsibility is to express an opinion on these financial statements based on our audit

2. Management''s responsibility for the Financial Statement

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 Section 211 (3C) of the Companies Act, 1956 ["the Act") read with the General Circular dated 13th September,2013 of the Ministry of Company Affairs in respect to 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.

3. Auditors'' Responsibility

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

4. 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. 5. Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ["the Order"] issued by the Centra J Government of India in terms of Section 227(4A) 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; 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 Balance Sheet the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in section 211(3C) of the Companies Actl956 read with the General Circular dated 13th September^013 of the Ministry of Company Affairs in respect to Section 133 of the Companies Act,20l3;

(e) On the basis of the 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 Section 274(1] (g) of the Act

Atmexure to the Auditors'' Report: Re: lshan Dyes & Chemicals Limited Referred to in paragraph 3 of our Report of even date,

1. In respect of its fixed assets:

[a) The company has maintained proper records showing plant wise particulars giving d eta Us and situation of fixed assets on the basis of available information.

[h] As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. As explained to us, no material discrepancies were noticed on such physical verification.

fc) In our opinion, the Company has not disposed of a substantial part of Its fixed assets during the Year and the going concern status of the Company is not affected

2. In respect of its inventories:

[a) The inventory has been physically verified during the Year by the management. In our opinion, the frequency of verification is reasonable.

[b) 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 is maintaining proper records of inventories. As explained to us, there was no material discrepancies noticed on verification of Inventories as compared to the book records.

3. In respect of the loans, secured, or unsecured, granted or taken by the company to / from companies, firms or other parties covered in the registered maintained under section 301of the companies act, 1956:

(a) The Company has taken unsecured loans from parties covered in the register maintained under section 301 of the companies Act* 1956. Therefore, in respect of the said Loans, the maximum amounts outstanding at any time during the year is Rs. 37.67 lacs and the year ended balance is NIL.

[bj In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans taken by die Company or whether they are prima facie prejudicial to die interest of die company.

(c) Since no unsecured loan is there as mentioned in point no. [a) Above, there are no stipulations for payment of interest or repayment of principal. Further, there is no question of outstanding of loan taken as on 31" March, 2014; the question of overdue amount of loan taken from parties listed in the register maintained under section 301 of die Companies Act, 1956 does not arise. Since the outstanding amount as on 31st March, 2014 is NIL die requirements of clause (m) [d) of paragraph 4 of die order are not applicable-

(dj The Company has given unsecured loans to parties covered in the register maintained under section 301 of the companies Act, 1956. fn respect of the said loans, the maximum amounts outstanding at any time during the year are Rs. NIL and the year- end balance is NIL.

(ej The company has not taken any loan during the year from the companies/firms or other parties covered under register maintained under section 301 of the companies Act, 19S6.

(f) There are no stipulations for repayment of principal. There being no outstanding of loan given as on 31s* March, 2014, the question of overdue amount of loan given to parties Listed in the register maintained under section 301 of the Companies Act 1956 does not arise. Since the outstanding amount as on 31"'' March, 2014 is NIL the requirements of clause (iii) (gj 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 procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in section 301 of the companies act, 19S6:

[a) In our opinion, and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements that need to be entered in the register maintained under Sec.301 of the Companies Act, 1956 have been so entered.

(h) In our opinion, and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements, entered in the register maintained under Sec.301 of the Companies Act, 1956 and exceeding the value of Rs.5.00 lacs in respect of each party during the Year have been made at prices which appear reasonable as per information available with the company.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Companies [Acceptance of Deposits] Rules, 1975 with regard to the deposits accepted from the public However, company has not accepted any term deposits from public. Company has taken unsecured Loans from friends and relatives of directors. All such loans have been repaid and outstanding amount as on 31£tMarch, 2014 is NIL.

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

8. We have broadly reviewed cost records maintained by the Company pursuant to Companies (Cost Accounting) Records, Rules 2011 prescribed by the Central Government u/s 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made the detailed examination of the Cost Records with a view to determine whether they are accurate or complete.

9, In respect of statutory dues:

(a) According to records of the company, undisputed statutory dues including Provident Fund, Income-tax, VAT, CSTj Service tax, custom duty, excise duty, cess, and other material statutory dues have been generally regularly deposited with the appropriate authorities. According information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2014 for a period of more than 6 months from the date of becoming payable.

(b) According to information and explanation given to us, old outstanding statutory undisputed dues are nil.

(c) The disputed statutory dues on account of disputed matters pending before appropriate authorities as under:

Period to Sr. Name of the Nature of Amount which the No Statue the dues amount relates

1 Income Tax Act Penalty u/s Not AY 2011-12 271 [11 [b] determined



Name of the Statute Forum where dispute is pending

Income Tax Act DC1T, Circle-3, Baroda



10. The company has made profits during the period covered by our audit and in the immediately preceding the financial year. The Company has not incurred cash losses during the financial year covered by the audit and In the immediately preceding financial year.

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

During the previous year, in case of Term Loans from C.N.S. Bank Limited, the Company received a settlement order dated 16/07/12 under "one time settlement scheme'' determining Liability of Rs.495.4l Lacs [as against book liability of Rs. 143-62 Lacs] to be settled by July''13. The Company has discharged the entire liability during the year under review. The Company has also received No Due Certificate from CNS.Bank dated Sth April, 2014.

12. In our opinion and according to the explanation given to us and based on the information available, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a chit hind or a nidhi/mutual benefit fund/society. Therefore, the provisions of Clause 4 (xiiQ of paragraph 4 of the order are not applicable.

14. The company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 [xiv) of paragraph 4 of the order are not applicable.

15. The company has not given any guarantee for loans taken by others from banks or financial institutions.

16. The company has not obtained 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, we are of the opinion that there are no funds raised on short term basis that have been used for long term investment

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the Year.

19. According to the information and explanations given to us. the Company had not issued any Secured Debentures during the year.

20. The Company has not raised any money hy way of public issues during the year.

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

Place: Ahmedabad Date: 30th May, 2014

For GS MATHUR & CO Chartered Accountants

Bhargav Vaghela Partner Membership No .12 4 619 F.R.N.: 008744N


Mar 31, 2012

1. We have audited the attached Balance Sheet of ISHAN DYES & CHEMICALS LIMITED, as at March 31st, 2012, and the related Profit and Loss Account and the Cash Flow Statement for the Year ended on that date annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors'' Report) Order, 2003 issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. Further to our opinion in the Annexure referred to above, we reported 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, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion the Profit & Loss account and Balance Sheet of the Company dealt with by this report are in compliance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 to the extent applicable.

e) On the basis of written representation received from the Directors, as on 31th March, 2012 and taken on record by the Board of Directors, we reported that none of the Directors is disqualified as on 31th March, 2012 from being appointed as a Director in terms of clause (g) of Sub- section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the 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 31th March, 2012.

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

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

Annexure to the Auditors'' Report:

Re: Ishan Dyes & Chemicals Limited

Referred to in paragraph 3 of our Report of even date,

1. In respect of its fixed assets:

(a) The company has maintained proper records showing plant wise particulars giving details and situation of fixed assets on the basis of available information.

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

(c) In our opinion, the Company has not disposed of a substantial part of its fixed assets during the Year and the going concern status of the Company is not affected

2. In respect of its inventories:

(a) The inventory has been physically verified during the Year by the management. In our opinion, the frequency of verification is reasonable.

(b) 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 is maintaining proper records of inventories. As explained to us, there was no material discrepancies noticed on verification of inventories as compared to the book records.

3. In respect of the loans, secured, or unsecured, granted or taken by the company to / from companies, firms or other parties covered in the registered maintained under section 301of the companies act, 1956:

(a) The Company has taken unsecured loans from parties covered in the register maintained under section 301 of the companies Act, 1956. In respect of the said loans, the maximum amounts outstanding at any time during the year is Rs. NIL lacs and the year ended balance is NIL.

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

(c) There are no stipulations for payment of interest or repayment of principal. There being no outstanding of loan taken as on 31st March, 2012, the question of overdue amount of loan taken from parties listed in the register maintained under section 301 of the Companies Act, 1956 does not arise. Since the outstanding amount as on 31st March, 2012 is NIL the requirements of clause

(iii) (d) of paragraph 4 of the order are not applicable.

(d) The Company has given unsecured loans to parties covered in the register maintained under section 301 of the companies Act, 1956. In respect of the said loans, the maximum amounts outstanding at any time during the year are Rs. 29.40 Lacs and the year-end balance is NIL.

(e) The company has not taken any loan during the year from the companies/firms or other parties covered under register maintained under section 301 of the companies Act, 1956.

(f) There are no stipulations for repayment of principal. There being no outstanding of loan given as on 31st March, 2012, the question of overdue amount of loan given to parties listed in the register maintained under section 301 of the Companies Act, 1956 does not arise. Since the outstanding amount as on 31st March, 2012 is NIL the requirements of clause (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 procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in section 301 of the companies act, 1956:

(a) In our opinion, and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements that need to be entered in the register maintained under Sec.301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements, entered in the register maintained under Sec.301 of the Companies Act, 1956 and exceeding the value of Rs.5.00 lacs in respect of each party during the Year have been made at prices which appear reasonable as per information available with the company.

6. In our opinion and according to the information and explanations given to us, the Company has not complied with the provisions of Sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. However, company has not accepted any term deposits from public. Company has taken unsecured loans from friends and relatives of directors. All such loans have been repaid and outstanding amount as on 31st March, 2012 is NIL.

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

8. We have broadly reviewed cost records maintained by the Company pursuant to Companies (Cost Accounting) Records, Rules 2011 prescribed by the Central Government u/s 209(1)(d) of the Companies Act,1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have ,however, not made the detained examination of the Cost Records with a view to determine whether they are accurate of complete.

9. In respect of statutory dues:

(a) According to records of the company, undisputed statutory dues including Provident Fund, Income-tax, VAT, CST, Service tax, custom duty, excise duty, cess, and other material statutory dues have been generally regularly deposited with the appropriate authorities. According information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2012 for a period of more than 6 months from the date of becoming payable.

(b) According to information and explanation given to us, old outstanding statutory undisputed dues are nil.

(c) The disputed statutory dues aggregating Rs.1.95 Lacs that have been deposited on account of disputed matters pending before appropriate authorities as under :

Sr No Name of the Nature of Amount Period to Forum where Statue the dues (Rs. in which the dispute is Lacs) amount pending relates

1 Income Tax Regular 1.95 AY 2006-07 CIT (Appeal), Act Demand Baroda u/s 115 JB

10. The company has accumulated losses at Year ending 31st March'' 2012. However, the company has made profits during the period covered by our audit and in the immediately preceding the financial year.

11. In case of Term Loans from C.N.S. Bank Limited, the Bank had recalled the entire Term Loan for repayment and had filed Civil Suite for recovery of Rs.541.32 Lacs. As explained to us and records produced before us, the suit for recovery is dismissed by lower Authority and the matters are pending before Tribunal.

In case of term loan of C.N.S. Bank Ltd., It has been informed to us that Government of Gujarat has notified scheme for one time settlement of outstanding loans vide notification number NSB/12/2005/M97/C DT. 19/5/2010. It is affirmed by the Board that the company is eligible under the scheme and has filed necessary application as per the scheme.

12. In our opinion and according to the explanation given to us and based on the information available, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of Clause 4 (xiii) of paragraph 4 of the order are not applicable.

14. The company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4 (xiv) of paragraph 4 of the order are not applicable.

15. The company has not given any guarantee for loans taken by others from banks or financial institutions.

16. The company has not obtained 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, we are of the opinion that there are no funds raised on short term basis that have been used for long term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the Year.

19. According to the information and explanations given to us, the Company had not issued any Secured Debentures during the year.

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

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

Place: Ahmedabad

Date: 29th May, 2012

For A R Pandhi & Associates

Chartered Accountants

Bhargav Vaghela

Partner

Membership No.124 619

F.R.N.: 118057W


Mar 31, 2011

1. We have audited the attached Balance Sheet of ISHAN DYES & CHEMICALS LIMITED, as at March 31, 2011, and the related profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors' Report) Order, 2003 issued by the Central Government of India in terms of Sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 & 5 of the said order.

- Further to our opinion in the Annexure referred to above, we reported 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, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion the Profit & Loss account and Balance Sheet of the Company dealt with by this report are in compliance with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 to the extent applicable.

e) On the basis of written representation received from the Directors, as on 31st March, 2011 and taken on record by the Board of Directors, we reported that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g) of Sub- section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 and Loss Account, of the Profit for the year ended on that date; and

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

Annexure to the Auditors' Report:

Re: Ishan Dyes & Chemicals Limited

Referred to in paragraph 3 of our Report of even date,

1. In respect of its fixed assets:

(a) The company has maintained proper records showing plant wise particulars giving details and situation of fixed assets on the basis of available information.

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

c) In our opinion, the Company has not disposed of a substantial part of its fixed assets ' during the year and the going concern status of the Company is not affected

2. in respect of its inventories:

(a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) 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 is maintaining proper records of inventories. As explained to us, there were no material discrepancies noticed on verification of inventories as compared to the book records.

(3) In respect of the loans, secured, or unsecured, granted or taken by the company to / from companies, firms or other parties covered in the registered maintained under section 301 of the companies act, 1956:

(a) The Company has taken unsecured loans from parties covered in the register maintained under section 301 of the companies Act, 1956. In respect of the said loans, the maximum amounts outstanding at any time during the year is Rs.56.74 lacs and the year end balance is NIL.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans taken by the Company, are not prima pacie prejudicial to the interest of the company.

(c) There are no stipulations for payment of interest or repayment of principal. There being no outstanding of loan taken as on 31st March 2011, the question of overdue amount of loan taken from parties listed in the register maintained under section 301 of the Companies Act 1956 does not arise. Since the outstanding amount as on 31st March 2011 is NIL the requirements of clause (iii) d of paragraph of the order are not applicable.

(d) The Company has given unsecured loans to parties covered in the register maintained under section 301 of the companies Act, 1956. In respect of the said loans, the maximum amounts outstanding at any time during the year is Rs.103.72 lacs and the year end balance is NIL.

(e) The loans given to parties covered in the register maintained under section 301 of the companies Act, 1956 were given free of interest.

(f) There are no stipulations for repayment of principal. There being no outstanding of loan given as on 31st March 2011, the question of overdue amount of loan given to parties listed in the register maintained under section 301 of the Companies Act, 1956 does not arise. Since the outstanding amount as on 31st March 2011 is NIL the requirements of clause (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 procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in section 301 of the companies act,

(a) In our opinion, and according to the information and explanations given to us, the Transaction made in pursuance of contracts or arrangements that need to be entered in the register maintained under Sec.301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements, entered in the register maintained under Sec.301 of the Companies Act, 1956 and exceeding the value of Rs.5.00 lacs in respect of each party during the year have been made at prices which appear reasonable as per information available with the company.

6. In cur opinion and according to the information and explanations given to us, the Company has not complied with the provisions of Sections 58A and 58AA of the Companies Act, 1956 and :he Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. However, company has not accepted any term deposits from public. Company has taken unsecured loans from friends and relatives of directors. All such loans have been repaid and outstanding amount as on 31st March 2011 is NIL.

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

8. As per the Rules made by the Central Government for the maintenance of cost records under r-.-;::;n 209(1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the company, the products of the company are not covered under the rules and hence the company is not required to maintain the books and other items of cost. However, company has maintained records for consumption of raw materials and production of finished goods. we have broadly reviewed such records and have not carried out detailed examination of such records.

9. In respect of statutory dues:

(a) According to records of the company, undisputed statutory dues including Provident Fund, Income-tax, VAT, CST, Service tax, custom duty, excise duty, cess, and other material statutory dues have been generally regularly deposited with the appropriate authorities. According information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2011 for a period of more than 6 months from the date of becoming payable.

(b) According to information and explanation given to us, old outstanding statutory undisputed dues are nil.

C) The disputed statutory dues aggregating Rs.1.95 Lacs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Sr. Name of the Nature of Amount Period to which Forum where No. Statute the Dues (Rs in Lacs) the amount dispute is relates pending

1. Income Tax Regular 1.95 A.Y.2006-07 CIT Act demand (Appeal), U/s 115JB Baroda.

10.The company has accumulated losses at the end of the financial year. However, the company has made profits during the financial year covered by our audit and in the immediately preceding the financial year.

11. In case of term loan from C.N.S. Bank Ltd., the bank had recalled the entire term loan for repayment and had filled civil suite for recovery of Rs.541.32 lacks. As explained to us and as per records presented before us, the suit for recovery is dismissed by lower authority and me maters are pending before Tribunal.

In case of term loan of C.N.S. Bank Ltd., It has been informed to us that Government of Gujarat has notified scheme for one time settlement of outstanding loans vide notification -umber NSB/12/2005/M97/C DT. 19/5/2010. It is affirmed by the Board that the company is eligible under the scheme and has filled necessary application as per the scheme. It is further affirmed by the management, that the amount payable to the said bank as per the verified scheme shall not be more than the amount outstanding and appearing on the books of the company on the balance sheet date. Since the bank is under liquidation, no further details are available with the company.

12.In our opinion and according to the explanation given to us and based on the information ma liable, the company has not granted any loans and advances on the basis of security by pledge of shares, debentures and other securities.

13. The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of Clause 4 (xiii) of paragraph 4 of the order are not applicable.

14. The company is not dealing or trading in shares, securities, debentures and other investments. Therefore, the provisions or clause 4 (iv) of paragraph 4 of the order are not applicable.

15. The company has not given any guarantee for loans taken by others from banks or financial institutions.

16. The company has not obtained 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, we are of the opinion that there are no funds raised on short term basis that have been used for long term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. According to the information and explanations given to us, the Company had not issued any Secured Debentures during the year.

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

21. According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

Place : Borsad For K.G. Patel & Co.

Date : 30th May, 2011 Chartered Accountants

Kamlesh Parikh

Partner

Membership No.34529

F.R.N.: 107717W

 
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