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Auditor Report of Jindal Hotels Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Jindal Hotels 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.

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 statement.

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; and

(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 the financial Statement (Refer Note 24 (ii) (N) of financial statements) ;

ii. The Company has not made any Long Term contract including derivative contracts, hence, it is not required to make provision for material foreseeable losses.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended 31 March 2015, we report that:

(i) In respect of its Fixed Assets

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

(b) As explained to us all the Fixed Assets have been physically verified by the Management according to a phased program designed to cover all the items over a period of three years, 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 verification.

(ii) Inventory

(a) As explained to us, the inventory have been physically verified during the year by the management;

(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 inventory. The discrepancy noticed on physical verification of inventory have been properly dealt with in the books of accounts.

(iii) According to the information and explanations given to us, there are no loans(secured or unsecured) granted by the Company to companies, firms or other parties covered in the register maintained under section 189 of The Companies Act,2013. Hence, para,3(iii)(a) and (b) of the Order is not applicable.

(iv) 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 purchase of inventory and Fixed assets and for the sale of goods & services. During the course of our audit we have not observed any continuing failure to correct major weaknesses in Internal Control.

(v) The Company has not invited the deposits from members. However Company has accepted interest free unsecured loan from directors of the company during the year under review.

(vi) The Central Government has not prescribed maintenance of cost records u/s 148 (1) (d) of the Companies Act, 2013 for the Company's products and activities.

(vii) Statutory and other dues:

(a) According to the information and explanations given to us and based on the records examined by us, the Company has been regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees' State insurance, Income tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Value Added Tax, Cess, Luxury Tax and any other statutory dues with the appropriate authorities during the year. There is no undisputed amounts of such statutory dues payable as at 31.03.2015 for a period of more than six months from the date they become payable.

(b) According to the information and explanation given to us, there are no dues of Sale Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax, Value Added Tax and Cess, which have not been deposited on account of any dispute.

(c) According to the information and explanations given to us the amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

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

(ix) Based on our Audit procedure and on the information and explanation given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution or bank;

(x) There is no guarantee given by the Company for loans taken by others from bank and financial institutions;

(xi) The Company has applied amount of term loans for the purpose for which the term loan was obtained;

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

For V. Shah & Associates, Chartered Accountants, F. R. N. 109816 W



Place : Baroda V.R.Shah Date : 26.05.2015 (Proprietor) Membership No. FCA 034994




Mar 31, 2014

We have audited the accompanying financial statements of Jindal Hotels Limited (the Company), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year ended on above date, 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 of India (''the Act) read with the General Circular 15/2013 dated September 13, 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 judgement, 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, not for the purpose of expressing an opinion on the effectiveness of the entity''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 explanation given to us, the financial statement 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

I. As required by section 227(3) of the Comapanies Act, 1956, 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 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/ 2013 dated September 13, 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, and 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 subsection (1) of section 274 of the Companies Act, 1956;

II. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanation given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

1. In respect of its Fixed Assets

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

(b) 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. No material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanation given to us, no substantial part of fixed assets have been disposed off during the year and therefore, does not affect the going concern assumption.

2. Inventory

(a) As explained to us, the inventory have been physically verified during the year by the management;

(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 inventory. The discrepancy noticed on physical verification of inventory have been properly dealt with in the books of accounts.

3.(a) According to the information and explanations given to us, there are no loans(secured or unsecured) granted by the Company to companies, firms or other parties covered in the register maintained under section 301 of The Companies Act,1956.

(b) The Company has taken Interest free unsecured loans (in the nature of Deposits) from sixteen parties (P.Y. Sixteen parties) covered in the Register maintained u/s 301 of The Companies Act, 1956. The maximum amount involved during the year was Rs. 1080.46 Lacs, (P.Y. Rs. 409.22 lacs) and the year end balance of unsecured loans taken from such parties was Rs. 1025.25 lacs (P.Y. Rs. 390.00 lacs).

(c) We are further informed that these unsecured loans are not prima facie prejudicial to the interest of the Company as the same are interest free and stated to be on long term basis. There is no overdue amount of such unsecured loans.

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 purchase of inventory and Fixed assets and for the sale of goods & services. During the course of our audit we have not observed any continuing failure to correct major weaknesses in Internal Control.

5. In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act, 1956:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not invited the deposits from public. However Company has accepted interest free deposits during the year under review and complied with the provision of the Companies (Acceptance of Deposits) Rules, 1975 and Section 58A & 58AA of The Companies Act, 1956.

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

8. The Central Government has not prescribed maintenance of cost records u/s 209 (1) (d) of the Companies Act, 1956 for the Company''s products and activities.

9. Statutory and other dues:

(a) According to the information and explanations given to us and based on the records examined by us, the Company has been regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees'' State insurance, Income tax, Sales Tax, Wealth Tax, Custom duty, Luxury Tax, Excise Duty, Service Tax, Cess and any other statutory dues with the appropriate authorities during the year.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Sales Tax, Income Tax, Wealth Tax, Customs Duty, Luxury Tax, Service Tax, Excise Duty as at 31.03.2014 for a period of more than six months from the date they become payable.

(c) According to the information and explanation given to us, there are no dues of Sale Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax and Cess, which have not been deposited on account of any dispute.

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

11. Based on our Audit procedure and on the information and explanation given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution or bank;

12. The Company has not granted 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 provision of any special statute of Chit Fund / Nidhi etc. are not applicable to the Company;

14. The Company is not dealing or trading in shares, Mutual Fund and other investments. Accordingly the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company;

15. There is no guarantee given by the Company for loans taken by others from bank and financial institutions;

16. The Company has applied amount of term loans for the purpose for which the term loan was obtained;

17. According to the cash flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short-term basis have, prima facie, have not been used during the year for long term investment (fixed assets, etc.,)

18. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year under review.

19. The Company has not issued any debentures during the year;

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

21. To the best of our knowledge and belief and according to the explanations given to us, no fraud on or by the company was noticed or reported during the year; nor we have been informed of any such case by the Management.

For V. Shah & Associates Chartered Accountants F. R. N. 109816 W Place: Vadodara V.R.Shah Date: 27.05.2014 Proprietor Membership No. 034994


Mar 31, 2012

I. We have audited the attached Balance Sheet of JINDAL HOTELS LTD., as at 31st March 2012, the Statement of Profit & Loss Account and the Cash Flow Statement for the year ended on that date, all 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimate made by the Management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

Further to our comments in the paragraph referred to 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 accounts as required by law have been maintained by the company so far as appears from our examinations of those books.

c. The company's Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by the 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. In our opinion and to the best our information and according to the explanations given to us, they said accounts read with the notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view:-

i. In case of Balance Sheet, of the state of affairs of the company as on 31st March, 2012,and

ii. In case of Statement of Profit & Loss Account, of the profit of the company for the year ended on that date.

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

f. On the basis of the written representation from the Directors and taken on record by the Board of Directors, none of the Director is disqualified as on 31st March, 2012 from being appointed as a Director in terms of under section 274 (1)(g) of the Companies Act, 1956.

II As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such examination of the books and records of the company as we considered appropriate and the information & explanations given to us during the course of the Audit, we report as under:

1. In respect of its Fixed Assets:

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

(b) 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. No material discrepancies were noticed on such verification.

(c) No substantial parts of fixed assets have been disposed off during the year. The going concern status of the company is not affected.

2. Inventory:

(a) The inventory have been physically verified during the year by the management;

(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 inventory. The discrepancy noticed on physical verification of inventory have been properly dealt within the books of accounts.

3. (a) According to the information and explanations given to us, there are no loans(secured or unsecured) granted by the Company to companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956.

(b) The Company has taken Interest Free unsecured loans (in the nature of Deposits) from Fifteen parties (P.Y. Sixteen parties) covered in the Register maintained u/s 301 of The Companies Act, 1956. The maximum amount involved during the year was Rs. 567.79 Lacs, (P. Y. Rs.583.80 lacs) and the yearend balance of unsecured loans taken from such parties was Rs. 133.86 lacs (P.Y. Rs. 131.89 lacs).

(c) We are further informed that these unsecured loans are not prima facie prejudicial to the interest of the Company as the same are interest free and stated to be on long term basis. There is no overdue amount of such unsecured loans.

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 purchase of inventory and Fixed assets and for the sale of goods & services. During the course of our audit we have not observed any continuing failure to correct major weaknesses in Internal Control.

5. In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act, 1956:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not invited the deposits from public. However Company has accepted interest free deposits during the year under review and complied with the provision of the Companies (Acceptance of Deposits) Rules, 1975 and Section 58A & 58AA of The Companies Act, 1956.

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

8. The Central Government has not prescribed maintenance of cost records u/s 209 (1) (d) of the Companies Act, 1956 for the Company's products and activities.

9. Statutory and other dues:

(a) According to the information and explanations given to us and based on the records examined by us, the Company has been regular in depositing undisputed statutory dues including Provident fund, Investor-Education and Protection Fund, Employees' State insurance, Income tax, Sales Tax, Wealth Tax, Custom duty, Luxury Tax, Excise Duty, Service Tax, Cess and any other statutory dues with the appropriate authorities during the year.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Sales Tax, Income Tax, Wealth Tax, Customs Duty, Luxury Tax, Service Tax, Excise Duty as at 31.03.2012 for a period of more than six months from the date they become payable.

(c) According to the information and explanation given to us, there are no dues of Sale Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax and Cess, which have not been deposited on account of any dispute.

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

11. The Company has not defaulted in repayment of dues to a financial institution or bank;

12. The Company has not granted 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 provision of any special statute of Chit Fund / Nidhi etc. are not applicable to the Company;

14. The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company;

15. There is no guarantee given by the Company for loans taken by others from bank and financial institutions;

16. The Company has applied amount of term loans for the purpose for which the term loan was obtained;

17. According to the cash flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short-term basis have, prima facie, not been used during the year for long term investment (fixed assets, etc.,)

18. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year under review.

19. The Company has not issued any debentures during the year;

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

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

For V. Shah & Associates

Chartered Accountants

F. R. N. 109816 W

Place: Vadodara V.R.Shah

Date: 17.07.2012 Proprietor

Membership No. 034994


Mar 31, 2010

I. We have audited the attached Balance Sheet of JINDAL HOTELS LTD., as at 31st March 2010, the Profit & Loss Account and the Cash Flow Statement for the year ended on that date, all 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimate made by the Management as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

Further to our comments in the paragraph referred to 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 accounts as required by law have been maintained by the company so far as appears from our examinations of those books.

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

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

e. In our opinion and to the best our information and according to the explanations given to us, the said accounts read with the notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view:- i. In case of Balance Sheet, of the state of affairs of the company as on 31st March, 2010,and

ii. In case of Profit & Loss Account, of the profit of the company for the year ended on that date. iii. In the case of the Cash Flow Statement, of the Cash Flow for the year ended on that date.

f. On the basis of the written representation from the Directors and taken on record by the Board of Directors, none of the Director is disqualified as on 31st March, 2010 from being appointed as a Director in terms of under section 274 (1)(g) of the Companies Act, 1956.

II. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956, and on the basis of such examination of the books and records of the company as we considered appropriate and the information & explanations given to us during the course of the Audit we, report as under:

1. In respect of its Fixed Assets:

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

(b) 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. No material discrepancies were noticed on such verification.

(c) No substantial part of fixed assets have been disposed off during the year. The going concern status of the company is not affected.

2. Inventory :

(a) The inventory have been physically verified during the year by the management;

(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 inventory. The discrepancy noticed on physical verification of inventory have been properly dealt within the books of accounts

3. (a) According to the information and explanations given to us, there are no loans(secured or unsecured) granted by the

Company to companies, firms or other parties covered in the register maintained under section 301 of The Companies Act,1956.

(b) The Company has taken Interest Free unsecured loans (in the nature of Deposits) from Twenty one parties covered in the Register maintained u/s 301 of The Companies Act, 1956. The maximum amount involved during the year was Rs. 421.24 lacs (P.Y. Rs. 425.83 lacs) and the yearend balance of Loan taken from such parties was Rs. 130.74 lacs (P.Y. Rs. 277.87 lacs).

(c) We are further informed that these unsecured loans are not prima facie prejudicial to the interest of the Company as the same are interest free and stated to be on long term basis. There is no overdue amount of such unsecured loans.

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

5. In respect of transactions entered in the register maintained in pursuance of section 301 of the Companies Act, 1956:

(a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not invited the deposits from public. However Company has accepted interest free deposits during the year under review and complied with the provision of the Companies (Acceptance of Deposits) Rules, 1975 and Section 58A & 58AA of The Companies Act, 1956.

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

8. The Central Government has not prescribed maintenance of cost records u/s 209 (1) (d) of the Companies Act, 1956 for the Companys products and activities.

9. Statutory and other dues:

(a) According to the information and explanations given to us and based on the records examined by us, the Company has been regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees State insurance, Income tax, Sales Tax, Wealth Tax, Custom duty, Luxury Tax, Excise Duty, Service Tax, cess and any other statutory dues with the appropriate authorities during the year.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Sales Tax, Income Tax, Wealth Tax, Customs Duty, Luxury Tax, Service Tax, Excise Duty as at 31.03.2010 for a period of more than six months from the date they become payable.

(c) According to the information and explanation given to us, there are no dues of sale tax, income tax, customs duty, wealth tax, excise duty Service Tax and cess which have not been deposited on account of any dispute.

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

11. The Company has not defaulted in repayment of dues to a financial institution or bank;

12. The Company has not granted 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 provision of any special statute of Chit Fund / Nidhi etc. are not applicable to the Company;

14. The Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company;

15. There is no guarantee given by the Company for loans taken by others from bank and financial institutions;

16. The Company has applied amount of term loans for the purpose for which the term loan was obtained;

17. According to the cash flow statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short-term basis have, prima facie, not been used during the year for long term investment (fixed assets, etc.,)

18. According to the information and explanation given to us, the Company has made Preferential Allotment of 2,34,270 Equity Shares of Rs. 10/- each at a premium of Rs. 10/- per Equity Share, total amounting to Rs. 46.85 lacs to the parties covered under in the Register maintained U/S 301 of the Companies Act, 1956. The issues of the above referred Equity Shares are not prejudicial to the interest of the Company, as the issue price has been determined in accordance with the provision of the SEBI (DIP) Guidelines, 2000.

19. The Company has not issued any debentures during the year;

20. The Company has not raised any money by way of public issues during the year. However, Company has made Preferential allotment of 11,75,540 Equity shares of Rs. 10/- each, at premium of Rs. 10/- each, total amounting to Rs. 235.11 lacs. The Management has disclosed the end use of the money vide Note No. 25 of schedule 20 of the Annual Accounts for the year ended 31.03.2010.

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

For V. Shah & Associates

Chartered Accountants

Firm Registration No. 109816 W

Place : Vadodara V.R.Shah

Date : 20.07.2010 Proprietor

Membership No. 034994



 
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