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Auditor Report of Kesar Petroproducts Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of M/s. KESAR PETROPRODUCTS LIMITED, which comprise the Balance Sheet as at 31st 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 Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to 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 the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, 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 financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the 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 true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

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 31st March, 2015; ,

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 Cash Flow Statement of the Cash Flows of the Company for the year ended on that date.

Emphasis of matters

We draw attention to the following notes in Note 2 attached to the financial statements. Our opinion is not qualified in respect of these matters.

i. Notes 2 (m) regarding Secured Loans from M/s. Invent Assets Reconstruction Company Limited and other matters as referred to thereunder.

Report on other Legal and Regulatory Requirements

As required by the Companies (Auditors' Report) Order, 2015 ( "the Order") issued by the Central Government of India in term of sub-section (11) of section 143 of the Companies Act, 2013. We give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order. 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 appears from our examination of those books.

c) the Balance Sheet, the 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 aforesaid 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 written representations received from the directors as on 31st March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

For SAYEED KHAN & ASSOCIATES

Chartered Accountants (FRN 125227W)

SAYEED KHAN

Proprietor M.No.117114

Place: Mumbai

Date : 24th July, 2015


Mar 31, 2014

We have audited the accompanying financial statements of M/s. KESAR PETROPRODUCTS LIMITED, which comprise the Balance Sheet as at March 31, 2014, 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 Financial Statements

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

Auditors'' Responsibility

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

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

Opinion

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

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

Emphasis of matters

We draw attention to the following notes in Note 24 Part B attached to the financial statements. Our opinion is not qualified in respect of these matters.

i. Notes 24 A (2) regarding Company accounting for encashment of leave salary and gratuity, on cash basisand other matters referred to thereunder.

ii. Notes 24 B (1) regarding Company being declared out of the purview of the Sick Company''s definition and other matters referred to thereunder.

iii. Notes 24 B (2) regarding Secured Loans from M/s. Invent Assets Reconstruction Company Limited and other matters as referred to thereunder.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) order 2003, issued by the Central Government on India in terms of section 227 (4A) of the Companies Act, 1956 (The Act) and on the basis of such checks as we considered appropriate and according to the informations and explanations given to us during the course of audit, we enclose herein the annexures a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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

b) in our opinion proper books of 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 and Statement of Profit and Loss dealt with by this Report are in agreement with the books of account.

d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act 2013; and;

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 sub-section (1) of section 274 of the Companies Act, 1956.

Statement referred to in paragraph 3 of the Auditors Report of even date to the members of M/s. KESAR PETROPRODUCTS LIMITED on the accounts for the year ended 31st March, 2014.

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we state as under:-

1 (a) In our opinion, the record of fixed assets maintained by the Company has been duly updated to show full particulars and situation of the fixed assets;

(b) We are informed that the physical verification of the fixed assets has been duly carried out by the management of the company during the year;

(c) During the year the company has not disposed off any substantial, major part of its fixed assets

2 (a) We are informed that the inventories of the company has been subjected to physical verification by the management.

(b) In our opinion and according to the information and explanations given to us, the company has verified its inventory for identification and valuations of its inventory.

(c) As informed to us by the management, the company is maintaining proper records for inventory and the physical verification of stock was duly conducted at regular intervals. Having regards to the size of the operations of the company and the nature of the stocks held, the discrepancies noticed on verification between physical stocks and book records were not material and have been properly dealt with in the book of accounts.

3. As per the information furnished, during the year the company has not granted or taken any loans, secured or unsecured, to or from any companies, firms, or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 hence clause 3 (b), 3 (c), 3 (d), 3 (e), 3 (f) & 3 (g) are not applicable to the company.

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 it business with regards to the purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, no other major weaknesses have been noticed in the internal controls and there is no continuing failure for the same.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that needed to be entered into the registers maintained u/s 301 of the Companies Act, 1956 have been duly entered.

(b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the registers maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in respect of any party during the year.

6. The Company has not accepted any deposit, within the meaning of section 58A of the Companies Act, 1956 and the rules framed there under.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government of India for the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956, in respect of the manufacture of chemicals and are of the opinion that, prima facie, the prescribed records and accounts have been made and maintained. However, we have not carried out a detailed examination of such records with a view to determining whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records examined by us, the company is regular in depositing with the appropriate authorities undisputed statutory dues, Employees Provident Fund and Sales Tax.

(b) According to the records of the company there are no dues of Sales Tax, Income Tax, Customs, Wealth Tax, Excise Duty Cess which have not been deposited on account of dispute except the company had been served with an order u/s 271 (1) (c) & subsequent demand u/s 156 under the Income Tax Act, 1961 for the periods; AY 2002-03 for Rs. 4,42,098/-, AY 2003-04 for Rs. 3,79,195/-, AY 2007-08 for Rs. 1,92,07,921/-. The total amount of outstanding demand with the Income Tax Department totals to Rs2,00,29,214/-. The company has preferred an appeal with the Income Tax Appellate Tribunal for AY 2002-03 and 2003-04 and appeal is pending with Commissioner of Income Tax (Appeals) for AY 2007-08.

10. The accumulated losses as at the end of the year do not exceed fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Secured loans due payable by the company as at 31/03/2014which pertains to the erstwhile management prior to the takeover by the new management, are as per the details tabulated hereunder:-

Name of the Institution/Purpose Amount in Rs.

Secured Loans For Fixed Assets 1,45,00,000

Other Secured Loans 2,46,04,037

Canara Bank* 14,15,000

TOTAL AMOUNT 4,05,19,037

* Canara Bank has transferred the assets to an Assets Reconstruction Company at Zero value. The company remains committed to settle the issue amicably.

12. Based on our examination of the record and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Clause (xiii) of the Order is not applicable to the company as the company is not a Chit Fund Company or Nidhi or Mutual Benefit Fund or Society.

14. During the year the company has no transactions in respect of dealing in shares, securities, debentures and other investments. All shares, debentures and other securities have been held by the company in its own name.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, no Term Loans were raised during the year.

17. Based on our examination of the Balance Sheet of the company as at 31st March, 2014, we find that the company has not used funds raised on short term basis for long term investments.

18. The company has not made any preferential allotment of shares during the year.

19. During the year covered by our audit report the company has not issued any secured debentures.

20. The company has not raised money by public issues during the year covered by our audit.

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

For Sayeed Khan & Associates Chartered Accountants

Place : Mumbai Sayeed Khan Date : 8th September, 2014 Proprietor


Mar 31, 2012

1. We have audited the attached Balance Sheet of KESAR PETROPRODUCTS LIMITED' as at 31" March' 2012 and also the Profit & Loss Account and Cash Flow of the Company for the year ended on the 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 a test basis' evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principle used and significant estimates 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.

3. As required by the Companies (Auditor's Report) order 2003' issued by the Central Government on India in terms of section 227 (4A) of the Companies Act' 1956 (The Act) and on the basis of such checks as we considered appropriate and according to the informations and explanations given to us during the course of audit' we enclose herein the annexures a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Without qualifying our opinion' we draw attention to the following notes to the financial statements;

i. The company has not provided for any interest payable and/or exchange gain/loss and any revision in the waivers and the outstanding balances thereby remaining payable on External Commercial Borrowings' Financial Institutions and losses on account of provisions for doubtful and irrecoverable Advances and Receivables. Due to this' the loans and losses remain understated by amounts of such interests' exchange loss/gain' provisions of doubtful & irrecoverable advances and receivables. (Refer Note: B-1'2 & 3 of Note 24).

ii. The company has not translated the External Commercial Borrowings at the rates prevailing as at 31 st March' 2012 as per the provisions of AS-11 "Accounting for Effects of changes in Foreign Exchange Rates" issued by the Institute of Chartered Accountants of India. The company has not quantified the amount for the same. (Refer Note: B-1'2&3ofNote24).

iii. No provisions have been made by the company for liability towards Gratuity and Leave Encashments payable to employees on retirement since the same are accounted for on cash basis. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India.

iv. The company has not obtained any confirmations for the balances for Secured Loans from Financial Institutions' Banks' Unsecured Loans' Sundry Debtors' Sundry Creditors' Advances Recoverable' Loans & Advances. All the balances therefore are as per the books of accounts and the same remain subject to reconciliations and confirmations if any. (Refer Note: B-1'2'3 & 4 of Note 24)

v. The company has not provided for any losses on account of devaluation' expiration' obsolescence and damages in the stocks. The inventories have been valued and ascertained as certified by the management.

vi. The company has not provided for the payment of deferred Sales tax due for payment in the accounts during the year under consideration. In our opinion the short term liabilities and the losses for the year remain understated by the amount of such pro-rata installment due on account of the repayment of the Deferred Sales Tax benefit availed by the company in the earlier years.

5. Further to our comments in the annexure 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 subject to the fact that the earlier years' no proper takeover of accounts or operations of the company could be effected upon and as per the managements explanations due to sabotage and personnel irresponsibility and menace' the books of accounts for all the easier periods ie prior to January 2008 have been lost. Hence detailed examination of the accounts and the records of the earlier periods could not be undertaken by us and the audit has been conducted based upon the available records on hand which was presented by the management before us. (Refer Note: B-1'2' & 3 of Note 24).

b. In our opinion' except for the non provision of interest payable and/or exchange gain/loss and any revision in the waivers and the-outstanding balances thereby remaining payable on External Commercial Borrowings' Financial Institutions and losses on account of provisions for doubtful and irrecoverable Advances and Receivables the Company has kept proper books of account as required by Law' so far as appearfrom our examination of the books. (Refer Note: B-1'2' & 3 of Note 24).

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

d. In our opinion' except for non compliance with provisions of AS 15 (Refer clause g (ii) below) the Balance Sheet and Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards prescribed Under Section 211 (3C) of the Companies Act' 1956.

e. On the basis of the written representations received from the Directors as on 31st March' 2012 and taken on record by the Board of Directors' we report that none of the Directors is disqualified as on 31 st March' 2012 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section 274 of the CompaniesAct' 1956.

f. In our opinion' and to the best our information and according to the explanation 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:

a) In the case of Balance Sheet of the state of affairs of the Company as on 31 st March' 2012.

b) In the case of the Profit & Loss Account of the Loss for the year ended on that date.

For Sayeed Khan & Associates

Chartered Accountants

Place: Mumbai Sayeed Khan

Date : 10* September' 2012 Proprietor

Statement referred to in paragraph 3 of the Auditors Report of even date to the members of M/s. KESAR PETROPRODUCTS LIMITED on the accounts for the year ended 31" March' 2012.

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us' we state as under:-

1 (a) In our opinion' the record of fixed assets maintained by the Company has been duly updated to show full particulars and situation of the fixed assets;

(b) We are informed that the physical verification of the fixed assets has been duly carried out by the management of the company during the year;

(c) During the yearthe company has not disposed off any substantial' major part of its fixed assets

2 (a) We are informed that the inventories of the company has been subjected to physical verification by the management. (b) In our opinion and according to the information and explanations given to us' the company has verified its inventory for identification and valuations of its inventory however the management has not provided for any losses on account of devaluation' expiration' obsolescence and damages in the stocks.

(c) As informed to us by the management' the company is maintaining proper records for inventory and the physical verification of stock was however the management has not provided for any losses on account of devaluation' expiration' obsolescence and damages in the stocks.

3 (a) As per the information furnished' during the year the company has not granted or taken any loans'

secured or unsecured' to or from any companies' firms' or other parties covered in the register maintained u/s 301 of the Companies Act' 1956 hence clause 3 (b)' 3 (c)' 3 (d)' 3 (e)' 3 (f) &3 (g)are not applicable to the company.

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 it business with regards to the purchases of inventory and fixed assets and for the sale of goods. During the course of our audit' no other major weaknesses have been noticed in the internal controls and there is no continuing failure for the same.

5 (a) Based on the audit procedures applied by us and according to the information and explanations

provided by the management' we are of the opinion that the transactions that needed to be entered into the registers maintained u/s 301 of the Companies Act' 1956 have been duly entered. (b) In our opinion and according to the information and explanations given to us' there are no transactions made in pursuance of contracts or arrangements entered in the registers maintained u/s 301 of the Companies Act' 1956 and exceeding the value of Rupees Five Lacs in respect of any party during the year.

6. The company has during the year accepted interest free loans from Shareholders. Subject to the same we report that the company has complied with the provisions of section 58Aof the Companies Act' 1956 and the rules framed there under.

7. The company did not have and internal audit system during the year

8. The company has not appointed a Cost auditor pursuant to the order made by the Central government for the maintenance of cost records u/s 209 (1) (d) of the Companies Act' 1956 is respect of the company's products.

9. (a) According to the information and explanations given to us and the records examined by us' the

company is regular in depositing with the appropriate authorities undisputed statutory dues' Employees Provident Fund and Sales Tax. (b) According to the records of the company there are no dues of Sales Tax' Income Tax' Customs' Wealth Tax' Excise Duty Cess which have not been deposited on account of dispute except pending cases against the company for the period 1998-2002 under the Finance Act' 1994 (Chapter- V Service Tax Act) pending before the CESTAT involving a demand of Rs. 83'43'444/-. Also duringthe year the company has been served with an order u/s 271 (1) (c) & subsequent demand u/s 156 under the Income Tax Act' 1961 forthe aforementioned periods; AY 2002-03 forRs. 48'54'045/-' AY 2003-04 for Rs. 9'09'236/-' AY 2004-05 forRs. 32'73'733/-' AY 2007-08 for Rs. 1'92'07'921/-. The total amount of outstanding demand with the Income Tax Department totals to Rs. 2'82'44'935/-. The company has preferred an appeal with the Commissioner of Income Tax (Appeals) challenging the above penal levies.

10. The accumulated losses as at the end of the year do not exceed fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year

11. Based on our audit procedures and the information and explanations given by the management' we are of the opinion that the Secured loans due payable by the company as at 31/03/2012 upon giving due effect to the BIFR Order of Restructuring dated 17/08/2007 are as per the details tabulated hereunder:-

Name of the Institution/Purpose Amount in Rs

Secured Loans For Fixed Assets 1'45'00'000

Other Secured Loans 246'04'037

Canara Bank * 14'15'000

TOTAL AMOUNT 4'05'19'037

* Canara Bank has refuted the jurisdiction of the BIFR and has disputed the awarded rebate in claims as sanctioned by the BIFR in its order dated 17* A ugust 2007. The company has preferred a plea with the High Court of Mumbai for the same and the above disputed amounts have not been considered by the management in the preparation of the accounts.

12. Based on our examination of the record and the information and explanations given to us' the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares' debentures and other securities.

13. Clause (xiii) of the Order is not applicable to the company as the company is not a Chit Fund Company or Nidhi or Mutual Benefit Fund or Society.

14. During the year the company has no transactions in respect of dealing in shares' securities' debentures and other investments. All shares' debentures and other securities have been held by the company in its own name.

15. According to the information and explanations given to us' the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us' no Term Loans were raised during the year.

17. Based on our examination of the Balance Sheet of the company as at 31" March' 2012' we find that the company has not used funds raised on short term basis for long term investments.

18. The company has not made any preferential allotment of shares during the year.

19. During the year covered by our audit report the company has not issued any secured debentures.

20. The company has not raised money by public issues during the year covered by our audit.

21. As per the information and explanations given to us' no fraud on or by the company has been noticed or reported during the year.

For SAYEED KHAN & ASSOCIATES

Chartered Accountants

Place: Mumbai SayeedKhan

Date: 10TH September' 2012 Proprietor


Mar 31, 2011

1. We have audited the attached Balance Sheet of KESAR PETROPRODUCTS LIMITED, as at 31st March, 2011 and also the Profit & Loss Account and Cash Flow of the Company for the year ended on the 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 a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principle used and significant estimates 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.

3. As required by the Companies (Auditor's Report) order 2003, issued by the Central Government on India in terms of section 227 (4A) of the Companies Act, 1956 (The Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we enclose herein the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the annexure 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 subject to the fact that the earlier years, no proper takeover of accounts or operations of the company could be effected upon and as per the managements explanations due to sabotage and personnel irresponsibility and menace, the books of accounts for all the earlier periods i.e. prior to January 2008 have been lost. Hence detailed examination of the accounts and the records of the earlier periods could not be undertaken by us and the audit has been conducted based upon the available records on hand which was presented by the management before us. (Refer Note: B-1,2,3&4 of Schedule Q).

b. In our opinion, except for the non provision of interest payable and/or exchange gain/loss and any revision in the waivers and the outstanding balances thereby remaining payable on External Commercial Borrowings, Financial Institutions and losses on account of provisions for doubtful and irrecoverable Advances and Receivables the Company has kept proper books of account as required by Law, so far as appear from our examination of the books. (Refer Note: B-1,2,3&4 of Schedule Q).

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

d. In our opinion, except for non compliance with provisions of AS 15 (Refer clause g (ii) below) the Balance Sheet and Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards prescribed Under Section 211 (3C) of the Companies Act, 1956.

e. On the basis of the written representations received from the Directors as on 31st March, 2011 and taken on record by the Board of Directors, we report 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. -During the year the company has undertaken trading business. The company had been restructured under a scheme sanctioned by the BIFR and the company has given full effect to the said order and the company has also made a reference to the BIFR for a discharge under the said Rehabilitation charge and declaration of financial solvency & viability has been sought by the management in its application to the Board. (Refer Note: B-1 & 2 of Schedule Q).

g. (I) The currant has not provided for any interest payable and/or exchange gain/loss and any revision. in the waivers and the outstanding balances thereby remaining payable on External Commercial Borrowings, Financial Institutions and losses on account of provisions for doubtful and irrecoverable Advances and Receivables. Due to this, the loans and losses remain understated. by amounts of such interests, exchange loss/gain, provisions of doubtful & irrecoverable advances and receivables. (Refer Note: B-1,2,3 & 4 of Schedule Q).

(ii) The company has not translated the External Commercial Borrowings at the rates prevailing as at 31st March, 2011 as per the provisions of AS-11 "Accounting for Effects of changes in Foreign Exchange Rates" issued by the Institute of Chartered Accountants of India. The company has not quantified the amount for the same. (Refer Note: B-1,2,3&4of Schedule Q). .

(iii) No provisions have been made by the company for liability towards Gratuity and Leave Encashment payable to employees on retirement since the same are accounted for on cash basis. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India.

(iv) The company, has not obtained any confirmations for the balances for Secured Loans from Financial Institutions, Banks, Unsecured Loans, Sundry Debtors, Sundry Creditors, Advances Recoverable, Loans & Advances. All the balances therefore are as per the books of accounts and the same remain subject to reconciliations and confirmations if any. (Refer Note: B-1,2,3 & 4 of Schedule Q)

(v) The company has not provided for any losses on account of devaluation, expiration, obsolescence and damages in the stocks. The inventories have been valued and ascertained as certified by the management.

(VI) The company has not appointed a full time secretary as required u/s 383A of the Companies Act, 1956.

h. In our opinion, and to the best our information and according to the explanation 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:

a) In the case of Balance Sheet of the state of affairs of the Company as on 31st March, 2011.

b) In the case of the Profit & Loss Account of the Loss for the year ended on that date.

Statement referred to in paragraph 3 of the Auditors Report of even date to the members of M/s. KESAR PETROPRODUCTS LIMITED on the accounts for the year ended 31st March, 2011.

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we state as under:-

1 (a) In our opinion, the record of fixed assets maintained by the Company has been duly updated to show full particulars and situation of the fixed assets;

(b) We are informed that the physical verification of the fixed assets has been duly carried out by the management of the company during the year;

(c) During the year the company has not disposed off any substantial, major part of its fixed assets

2 (a) We are informed that the inventories of the company has been subjected to physical verification by the management.

(b) In our opinion and according to the information and explanations given to us, the company has verified its inventory for identification and valuations of its inventory however the management has not provided for any losses on account of devaluation, expiration, obsolescence and damages in the stocks.

(c) As informed to us by the management, the company is maintaining proper records for inventory and the physical verification of stock was however the management has not provided for any losses on account of devaluation, expiration, obsolescence and damages in the stocks.

3 (a) As per the information furnished, during the year the company has not granted or taken any loans, secured or unsecured, to or from any companies, firms, or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 hence clause 3 (b), 3 (c), 3 (d), 3 (e), 3 (f) & 3 (g) are not applicable to the company.

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 it business with regards to the purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, no other major weaknesses have been noticed in the internal controls and there is no continuing failure for the same.

5 (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that needed to be entered into the registers maintained u/s 301 of the Companies Act, 1956 have been duly entered. (b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the registers maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in respect of any party during the year.

6. The company has during the year accepted interest free loans from Shareholders. Subject to the same we report that the company has complied with the provisions of section 58A of the Companies Act, 1956 and the rules framed there under.

7. The company did not have and internal audit system during the year

8. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records u/s 209 (1) (d) of the Companies Act, 1956 is respect of the company's products.

9. (a) According to the information and explanations given to us and the records examined by us, the company is regular In depositing with the appropriate authorities undisputed statutory dues, Employees Provident Fund and Sales Tax. (b) According to the records of the company there are no dues of Sales Tax, Income Tax, Customs, Wealth Tax, Excise Duty Cess which have not been deposited on account of dispute except pending cases against the company for the period 1998-2002 under the Finance Act, 1994 (Chapter- V Service Tax Act) pending before the CESTAT involving a demand of Rs. 83,43,444/-

10.. The accumulated losses as at the end of the year do not exceed fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year

11. Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Secured loans due payable by the company as at 31/03/2011 upon giving due effect to - the BIFR Order of Restructuring dated 17/08/2007 are as per the details tabulated hereunder:-

Name of the Institution/Purpose Amount in Rs

Secured Loans For Fixed Assets 1,45,00,000

Other Secured Loans 2,46,04,037

Canara Bank 14,15,000

TOTAL AMOUNT 4,05,19,037

* Canara Bank has refuted the jurisdiction of the BIFR and have disputed the awarded rebate in claims as sanctioned by the BIFR in its order dated 1T August 2007. The company has preferred a plea with the High Court of Mumbai for the same and the above disputed amounts have not been considered by the management the Reparation of the accounts.

12. Based on our examination of the record and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Clause (xiii) of the Order is not applicable to the company as the company is not a Chit Fund Company or Nidhi or Mutual Benefit Fund or Society.

14. During the year the company has no transactions in respect of dealing in shares, securities, debentures and other investments. All shares, debentures and other securities have been held by the company in its own name.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, no Term Loans were raised during the year.

17. Based on our examination of the Balance Sheet of the company as at 31st March, 2011, we find that the company has not used funds raised on short term basis for long term investments.

18. The company has not made any preferential allotment of shares during the year.

19. During the year covered by our audit report the company has not issued any secured debentures.

20. The company has not raised money by public issues during the year covered by our audit.

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

For Sayeed Khan & Associates

Chartered Accountants

Place: Mumbai Sayeed Khan

Date :6th February, 2012 Proprietor


Mar 31, 2010

1. We have audited the attached Balance Sheet of KESAR PETROPRODUCTS LIMITED, as at 31st March, 2010 and also the Profit & Loss Account and Cash Flow of the Company for the year ended on the date annexed thereto. These financial statements are the responsibility of the Companys management.. Our responsibility is to express an opinion on these financial statements based on our audit.

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 a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principle used and significant estimates 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.

3. As required by the Companies (Auditors Report) order 2003, issued by the Central Government on India in terms of section 227 (4A) of the Companies Act, 1956 (The Act) and on the basis of such checks as we considered appropriate and according to the informations and explanations given to us during the course of * audit, we enclose herein the annexures a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the annexure 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 subject to the fact that during the take over of the Company under the BIFR scheme in January, 2008 the previous management has not given the old records of the Company. Thus any balances outstanding prior to Januray, 2008 are subject to verification. (Refer Note: B-1,2,3 &4of Schedule Q).

b. In our opinion, except for the non provision of interest payable and/or exchange gain/loss and any revision in the waivers and the outstanding balances thereby remaining payable on External Commercial Borrowings, Financial Institutions and losses on account of provisions for doubtful and irrecoverable Advances and Receivables the Company has kept proper books of account as required by Law, so far as appear from our examination of the books. (Refer Note: B-1,2,3 & 4 of Schedule Q).

c. The Balance Sheet and Profit & Loss Account dealt with by this Report are in agreement with the books ofaccount.

d. In our Opinion, except for non compliance with provisions of AS 15 (Refer clause g (ii) below) the Balance Sheet and Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards prescribed Under Section 211 (3C) of the Companies Act, 1956.

e. On the basis of the written representations received from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none ofthe Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

f. During the year the company has initiated and has undertaken production however production on full scale is anticipated in the next financial year. The company has been duly restructured under a scheme sanctioned by the BIFR and the company has given full effect to the said order and resultantly the Net worth of the company has become positive and the accumulated losses of the company has been duly covered up and the company has also made a reference to the BIFR for a discharge under the said Rehabilitation charge and declaration of financial solvency & viability has been sought by the

i management in its application to the Board. (ReferNote: B-1 & 2 of Schedule Q).

g. (i) The company has not provided for any interest payable and/or exchange gain/loss and any revision in the waivers and the outstanding balances thereby remaining payable on External Commercial Borrowings, Financial Institutions and losses on account of provisions for doubtful and irrecoverable Advances and Receivables. Due to this, the loans and losses remain understated by amounts of such interests, exchange loss/gain, provisions of doubtful & irrecoverable advances and receivables. (Refer Note: B-1,2,3 & 4 of Schedule Q).

(ii) No provisions have been made by the company for liability towards Gratuity and Leave Encashment payable to employees on retirement since the same are accounted for on cash basis. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India.

(iii) The company has not obtained any confirmations for the balances for Secured Loans from Financial Institutions, Banks, Unsecured Loans, Sundry Debtors, Sundry Creditors, Advances Recoverable, and Loans & Advances. All the balances therefore are as per the books of accounts and the same remain subject to reconciliations and confirmations if any. (Refer Note: B-1,2,3 & 4 of Schedule Q)

(iv) The inventories have been valued at after due recognition of losses due to obsolescence and damages therein, being duly valued and certified by the management;

(v) The company has not appointed a full time secretary as required u/s 383A of the Companies Act, 1956.

h. In our opinion, and.to the best our information and according to the explanation 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 principlesgenerally accepted in India:

a) In the case of Balance Sheet of the state of affairs of the Company as on 31st March, 2010.

b) In the case of the Profit & Loss Account of the Loss for the year ended on that date.

Statement referred to in paragraph 3 of the Auditors Report of even date to the members of M/s. KESAR PETROPRODUCTS LIMITED on the accounts for the year ended 31st March, 2010.

On the basis of such checks as considered appropriate and in terms of the information and explanations given to us, we state as under:-

1 (a) In our opinion, the record of fixed assets maintained by the Company has been duly updated to show

full particulars and situation of the fixed assets; ,

(b) We are informed that the physical verification of the fixed assets has been duly carried out by the management of the company during the year;

(c) During the year the company has not disposed off any substantial, major part of its fixed assets

2 (a) We are informed that the inventories of the company has been subjected to physical verification by the

management.

(b) In our opinion and according to the information and explanations given to us, the company has verified its inventory for identification and valuations of its inventory due account for losses due to obsolescence and damages therein.

(c) As informed to us by the management, the company is maintaining proper records for inventory and the physical verification of stock was undertaken and losses due to obsolescence and damages have been duly accounted for.

3 (a) As per the information furnished, during the year the company has not granted or taken any loans,

secured or unsecured, to or from any companies, firms, or other parties covered in the register maintained u/s 301 of the Companies Act, 1956 hence clause 3 (b), 3 (c), 3 (d), 3 (e), 3 (f) & 3 (g) are not applicable to the company.



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 natur with regards to the purchases of inventory and fixed assets and for the sale of goods, fruring the course of our audit, no other major weaknesses have been noticed in the internal controls and there is no conting failure for the same.

5 (a) Based on the audit procedures applied by- us and according to the information and explanations

provided by the management, we are of the opinion that the transactions that needed to be entered into the registers maintained u/s 301 of the Companies Act, 1956 have been duly entered. (b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the registers maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in respect of any party during the year.

6. The company has during the year accepted interest free loans from Shareholders, Subject to the same we report that the company has complied with the provisions of section 58A of the Companies Act, 1956 and the rules framed there under.

7. The company did not have and internal audit system during the year

8. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records u/s 209 (1) (d) of the Companies Act, 1956 is respect of the companys products.

9. (a) According to the information and explanations given to us and the records examined by us, the

company is regular in depositing with the appropriate authorities undisputed statutory dues, Employees Provident Fund and Sales Tax. (b) According to the records of the company there are no dues of Sales Tax, Income Tax, Customs, Wealth Tax, Excise Duty Cess which have not been deposited on account of dispute except pending cases against the company for the period 1998-2002 under the Finance Act, 1994 (Chapter- V Service Tax Act) pending before the CESTAT involving a demand of Rs. 83,43,444/-

10. The accumulated losses as at the end of the year do not exceed fifty percent of its net worth. The company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year

11. Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Secured loans due payable by the company as at 31 /03/2010 upon giving due effect to the BIFR Order of Restructuring dated 17/08/2007 are as per the details tabulated hereunder:-

Name of the Institution/Purpose Amount in Rs

Secured Loans For Fixed Assets 1,45,00,000

Other Secured Loans (being first charge over the assets taken by 2,46,04,037

way of assignments)

Canara Bank (second charge over the assets) 14,15,000

TOTAL AMOUNT 4,05,19,037

However some creditors have refuted the jurisdiction of the BIFR and have disputed the awarded rebate in ¦ claims as sanctioned by the BIFR in its order dated 17* August 2007. The above disputed amounts have not been considered by the management in the preparation of the accounts. The cases instituted by these creditors are going on invarious Courts.

12. Based on our examination of the record and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Clause (xili) of the Order is not applicable to the company as the company is not a Chit Fund Company or Nidhi or Mutual Benefit Fund or Society.

14. During the year the company has no transactions in respect of dealinginshares.securities.debenturesand other investments. All shares, debentures and other securities have been held by the company in its own name.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, no Term Loans were raised during the year,

17. Based on our examination of the Balance Sheet of the company as at 31st March, 2010, we find that the company has not used funds raised on short term basis for long term investments.

18. The company has made preferential allotment of shares during the year to parties covered in the Register maintained under section 301 of the Act, however according to the information and explanations given to us the price at which shares have been issued are not prima facie prejudicial to the interest of the company.

19. During the year covered by our audit report the company has not issued any secured debentures.

20. The company has not raised money by public issues during the year covered by our audit.

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

For Sayeed Khan & Associates Chartered Accountants

Place: Mumbai Sayeed Khan

Date : 30th November, 2010 Proprietor


Mar 31, 2009

1. We have audited the attached Balance Sheet of KESAR PETROPRODUCTS LIMITED, as at 31st March, 2009 and also the Profit & Loss Account and Cash Flow of the Company for the year ended on the date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit,

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 a test basis, evidence supporting the amount and disclosures in the financial statements. An audit also includes assessing the accounting principle used and significant estimates 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.

3. As required by the Companies (Auditors Report) order 2003, issued by the Central Government on India in terms of section 227 (4A) of the Companies Act, 1956 (The Act) and on the basis of such checks as we considered appropriate and according to the informations and explanations given to us during the course of audit, we enclose herein the annexures a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Further to our comments in the annexure 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 subject to the fact that during the year, no proper takeover of accounts or operations of the company could be effected upon and as per the managements explanations due to sabotage and personnel irresponsibility and menace the books of accounts for all the earlier periods ie prior to January 2008 have been lost. Hence detailed examination of the accounts and the records of the earlier periods could not be undertaken by us and the audit has been conducted based upon the available records on hand which was presented by the management before us. (Refer Note: B-1,2,3 &4of Schedule Q).

b. In our opinion, except for the non provision of interest payable and/or exchange gain/loss and any revision in the waivers and the outstanding balances thereby remaining payable on External Commercial Borrowings, Financial Institutions and losses on account of provisions for doubtful and irrecoverable Advances and Receivables the Company has kept proper books of account as required by Law, so far as appear from our examination of the books. (ReferNote: B-1,2,3&4 of Schedule Q).

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

d. In our opinion, except for non compliance with provisions of AS 15 (Refer clause g (ii) below) the Balance Sheet and Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards prescribed Under Section 211 (3C) of the Companies Act, 1956.

e. On the basis of the written representations received from the Directors as on 31st March, 2009 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31" March, 2009 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

f. The companys production process is inoperative since 18th August, 2004 and the plant is under closure since 18th November, 2004. The company has been restructured under a scheme sanctioned by the BIFR and during the year the company has given full effect to the said order and resultantly the Net worth of the company has become positive and the accumulated losses of the company has been duly covered up and the company has also made a reference to the BIFR for a discharge under the said Rehabilitation charge and declaration of financial solvency & viability has been sought by the management in its application to the Board. (ReferNote: B-1 & 2 of Schedule Q)

g. (I) The company has not provided for any interest payable and/or exchange gain/loss and any revision in the waivers and the outstanding balances thereby remaining payable on External Commercial Borrowings, Financial Institutions and losses on account of provisions for doubtful and irrecoverable Advances and Receivables. Due to this, the loans and losses remain understated by amounts of such interests, exchange loss/gain, provisions of doubtful & irrecoverable advances and receivables. (Refer Note: B-1,2,3 & 4 of Schedule Q).

(ii) The company has not translated the External Commercial Borrowings at the rates prevailing as at 31" March, 2009 as per the provisions of AS-11 "Accounting for Effects of changes in Foreign Exchange Rates" issued by the Institute of Chartered Accountants of India. The company has not quantified the amount for the same. (Refer Note: B-1,2,3 & 4ofSchedule Q).

(m) No provisions have been made by the company for liability towards Gratuity and Leave Encashments payable to employees on retirement since the same are accounted for on cash basis. The same is not in consonance with the provisions of AS-15 "Accounting for Retirement Benefits in Financial Statements" issued by the Institute of Chartered Accountants of India.

(iv) The company has not obtained any confirmations for the balances for Secured Loans from Financial Institutions, Banks, Unsecured Loans, Sundry Debtors, Sundry Creditors, Advances Recoverable, Loans & Advances. All the balances therefore are as per the books of accounts and the same remain subject to reconciliations and confirmations if any. (ReferNote: B-1,2,3 & 4 of Schedule Q)

(v) The inventories have been valued at after due recognition of losses due to obsolescence and damages therein, being duly valued and certified by the management and as sanctioned by the BIFR Order.

(vi) The company has not appointed a full time secretary as required u/s 383A of the Companies Act, 1956.

h. In our opinion, and to the best our information and according to the explanation 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:

a) In the case of Balance Sheet of the state of affairs of the Company as on 31* March, 2009.

b) In the case of the Profits Loss Account of the Loss for the year ended on that date. physical verification of stock was undertaken and losses due to obsolescence and damages have been duly accounted for.

3 (a) As per the information furnished, during the year the company has not granted or taken any loans, secured or unsecured, to or from any companies, firms, or other parties covered in the register maintained u/s 301 of the CompaniesAct, 1956 hence clause 3 (b), 3 (c), 3 (d), 3 (e), 3 (f) & 3 (g) are not applicable to the company.

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 it business with regards to the purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, no other major weaknesses have been noticed in the internal controls and there is no continuing failure for the same.

5 (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that needed to be entered into the registers maintained u/s 301 of the Companies Act, 1956 have been duly entered. (b) In our opinion and according to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements entered in the registers maintained u/s 301 of the Companies Act, 1956 and exceeding the value of Rupees Five Lacs in respect of any party during the year.

6. The company has during the year accepted interest free loans from Shareholders, Subject to the same we report that the company has complied with the provisions of section 58A of the Companies Act, 1956 and the rules framed thereunder.

7. The company did not have and internal audit system during the year

8. According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records u/s 209 (1) (d) of the Companies Act, 1956 is respect of the companys products.

9. (a) According to the information and explanations given to us and the records examined by us, the company is regular in depositing with the appropriate authorities undisputed statutory dues, Employees Provident Fund and Sales Tax. (b) According to the records of the company there are no dues of Sales Tax, Income Tax, Customs, Wealth Tax, Excise Duty Cess which have not been deposited on account of dispute except pending cases against the company for the period 1998-2002 under the Finance Act, 1994 (Chapter- V Service Tax Act) pending before the CESTATinvolving a demand Of Rs. 83,43,444/-

10. The company had accumulated losses exceeding 50% of its net worth, however during the year, upon giving due effect to the restructuring order issued by the BIFR dated 17/08/2007 the companies net worth has been valued at Rs. 805.33 Lacs and the earlier years accumulated losses have been duly restructured under the scheme of restructuring as provided in the said order. (ReferNote:B-1 & 2 of Schedule Q)

11. Based on our audit procedures and the information and explanations given by the management, we are of the opinion that the Secured loans due payable by the company as at 31 /03/2009 upon giving due effect to the BIFR Order of Restructuring dated 17/08/2007 areas per the details tabulated hereunder:-

Name of the Institution Amount in Rs

Canara Bank: 14,15,000

TOTAL AMOUNT 14,15,000

12. Based on our examination of the record and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Clause (xiii) of the Order is not applicable to the company as the company is not a Chit Fund Company or Nidhi or Mutual Benefit Fund or Society.

14. During the year the company has no transactions in respect of dealing in shares, securities, debentures and other investments. All shares, debentures and other securities have been held by the company in its own name.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by othersfrom banks or financial institutions.

16. According to the information and explanations given to us, no Term Loans were raised during the year.

17. Based on our examination of the Balance Sheet of the company as at 31st March, 2009, we find that the company has not used funds raised on short term basis for long term investments.

18. The company has not made any preferential allotment of shares during the year.

19. During the year covered by our audit report the company has not issued any secured debentures.

20. The company has not raised money by public issues during the year covered by our audit.

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

For SAYEED KHAN & ASSOCIATES Chartered Accountants

Place: Mumbai SayeedKhan

Date: 25.03.2010 Proprietor

 
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