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Auditor Report of Khaitan (India) Ltd.

Mar 31, 2015

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

Management's Responsibility for the Financial Statements:

2. 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 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 principle 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 judgements and estimates that are reasonable and prudent and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for insuring 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.

Auditors' Responsibility:

3. 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 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.

4. 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 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 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 operating 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 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.

5. Basis of Qualified Opinion:

a. Attention is provided to Note no. 14 regarding deferred tax asset which have not been written off amounting to Rs.32643751/- being recognized in the Balance Sheet. If the Deferred tax asset had been written off during the year, there would be a loss of Rs.8,85,15,565/- as against the loss of Rs.5,58,71,814/- shown in these financial statements. Deferred tax asset balance in the Balance sheet would amount to 'NIL'as against Rs.3,26,43,751/- as disclosed in these financial statements.

b. Closing balances of Debtors, Creditors, loans, deposits, advances, old liabilities relating to gratuity, land rent & panchayat tax and some bank balances are unconfirmed and fixed deposit receipts and National Saving certificates are not available with the company, in respect of which we are unable to express our opinion.

Qualified Opinion:

6. In our opinion and to the best of our information and according to the explanations given to us, except for the matter referred to in paragraph 5above, 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, 2015;

b) in the case of the Statement of Profit and Loss, of the Loss , 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.

Emphasis of Matter:

7. Without qualifying our opinion, we draw attention to the following matters:

Attention is drawn to Note No. 2(f) regarding valuation of planted trees on estimated realizable value being technical in nature, we are unable to express our opinion.

Report on Other Legal and Regulatory Requirements:

8. 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 Companies Act , 2013 we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order to the extent applicable .

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

a) except for the matter referred to in paragraph 5 above, we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion, except for the matter referred to in paragraph 5 above, 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) except for the matter referred to in paragraph 5 above, 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, except for the matter referred to in paragraph 5 above, 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 March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164 (2) of the Act .

f) With respect to the other matters to be included in the Auditors' 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 :

The company has disclosed the impact of pending litigations on its financial position in its financial statements 31 refer note 2 (M) to the financial statements .

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT REFERRED TO IN PARAGRAPH 8 WITH THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" SECTION OF OUR REPORT OF EVEN DATE

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

ii. The Fixed Assets have been physically verified in a phased manner by the management and reconciliation of the quantities with the Fixed Assets Register has been made. The differences, if any, have been adjusted and no serious discrepancies between the Fixed Assets Register and physical inventory have been noticed.

2. i. The management has conducted physical verification of inventory at reasonable intervals during the year.

ii. In our opinion the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

iii. On the basis of our examination of the records of Inventory, we are of the opinion that company is maintaining proper records of inventory. The discrepancies noticed on physical verification and the books stock wherever ascertained were not significant and have been properly dealt with in the books of accounts.

3. The Company has not granted loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly the requirements of clauses (iii) (a) to (b) of the paragraph 3 of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit no major weakness has been noticed in the internal control system.

5. The Company has not accepted deposits from the public during the year. The directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 of the Act and the rules framed there under are not applicable

6. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records. Under section 148 (1) of the Companies Act, 2013and are of the opinion primafacie, the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate or complete.

7. i. According to the information and explanations given to us and on the basis of our examination of the books and account, the company has generally been regular but with delays in depositing the Undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Excise Duty, Cess, Value Added Tax, T.D.S. and other statutory dues ,if any, with the appropriate authorities. No undisputed statutory dues were outstanding, as at 31st March 2015 for a period of more than six months from the date they became payable except Panchayat tax amounting to Rs.15,448/-and Service tax amounting to Rs.44,61,000/- .

ii. According to the information and explanations given to us and the records of the company examined by us, the dues of Income Tax, Sales Tax, Service Tax, Excise Duty, Value added Tax and Cess as at 31st March 2015 which have not been deposited on account of dispute and the forum where the disputes are pending are as follows :

Name of the Nature of Amount Period to which Statute Class is relating

Maharastra Tax & Penalty 94,87,225 Sales Tax Act on higher turnover on reassessment Income Tax

Income Tax - Do - 39,80,580 2008 - 09 Act, 1961

- Do - 0 2007 - 08

- Do - 7372674 2006 - 07

- Do - 53,21,692 2005 - 06

- Do - 1362312 2004 - 05

48,83,986 2003 - 04

Name of the Forum where dispute Statute is pending

Maharastra Joint Commissioner & Sales Tax Sales Tax Act (Appellate) Mumbai.

Income Tax Appeal filed by Company against Act, 1961 Assessment order before CIT(A)

Department filed appeal before ITAT

Department filed appeal before ITAT

Company filed appeal before ITaT

Department filed appeal before ITAT

Appeal filled before CIT(A)

8. The Company does not have accumulated losses more than fifty percent of its net worth at the end of the financial year but it has incurred cash losses during the financial year covered by our audit. It had incurred cash losses in the immediately preceding financial year also.

9. According to the information and explanations given to us by the management the company has not defaulted in repayment of dues to financial institutions/Banks .Refer note no 5 in Notes on Financial Statements .

10. According to the informations and explanations given to us, the company has given guarantee for loan taken by others, from bank or financial institutions. Since such guarantees or counter guarantees given are very old and records to this effect has not been provided to us we are unable to comment upon whether the terms and conditions are prejudicial to the interest of the company.

11. Based on information and explanations given to us and the records of the company examined by us, in our opinion the term loan has been applied for the purpose for which it was obtained .

12. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For O P Sharma and Associates Chartered Accountants 9 Old China Bazar St Registration M° 500128 M 5th fl., Room No 80 Om Prakash Sharma Kolkata-700001 Proprietor The 29th May, 2015 Membership No070762


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements:

2. 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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibilities:

3. 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 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.

5. Basis of Qualified Opinion:

A. Attention is provided to Note no. 14 regarding deferred tax asset which have not been written off amounting to Rs.3,26,43,751/- being recognized in the Balance Sheet. If the Deferred tax asset had been written off during the year, there would be a loss of Rs.5,10,46,258/- as against the loss of Rs.1,84,02,507/- shown in these financial statements. Deferred tax asset balance in the Balance sheet would amount to ''NIL'' as against Rs.3,26,43,751/- as disclosed in these financial statements.

B. Closing balances of Debtors, Creditors, loans, deposits, advances, capital advances taken against land, old liabilities relating to gratuity, land rent & panchayat tax and some bank balances are unconfirmed and fixed deposit receipts and National Saving certificates are not available with the company, in respect of which we are unable to express our opinion.

Qualified Opinion:

6. In our opinion and to the best of our information and according to the explanations given to us, except for the matter referred to in paragraph 5 above, 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 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.

Emphasis of Matter :

7. Without qualifying our opinion, we draw attention to the following matters:

a. Attention is drawn to Note No. 2(f) regarding valuation of planted trees, regarding valuation of planted trees on estimated realizable value being technical in nature, we are unable to express our opinion.

Report on Other Legal and Regulatory Requirements :

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

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

a) except for the matter referred to in paragraph 5 above, 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, except for the matter referred to in paragraph 5 above, 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) except for the matter referred to in paragraph 5 above, 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, except for the matter referred to in paragraph 5 above, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; 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.

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

ii. On the basis of informetion and explanations given to us, we find that Fixed Assets have been physically verified by the management during the year, and there is a program of verification having regard to the size of the Company and the nature of its fixed assets.

iii. There was no substantial disposal of fixed assets during the year.

2. i. The management has conducted physical verification of inventory at reasonable intervals during the year.

ii. The procedures of physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

iii. The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. i. On the basis of examination of records and according to information and explanations given to us, we report that the Company has not granted any loans, secured or unsecured to/from companies/firms or other parties covered in the register maintained under Section 301 of the Act.

ii. In view thereof, the provision of clause 3(b), (c) & (d) of paragraph 4 of the Order are not applicable to the company. iii. The Company has taken loan from three companies covered in the register maintained under Section 301 of the Companies Act. The maximum amount involved during the year was Rs.27,51,96,474/- and the year end balance of loans taken is Rs.26,86,10,530 /- (including interest).

iv. In our opinion the rate of interest and other terms and conditions on which above loans have been taken are not prima facie prejudicial to the interest of the company.

v. According to the information and explanation given to us, the Principal and interest amount where applicable are repayable on demand.

vi. In respect of the said Loans the same are repayable on demand and therefore the question of overdue amounts does not arise.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. Further during the course of our audit no major weakness has been noticed in the internal control systems.

5. i. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred in Section 301 of the Act have been entered into the register required to be maintained under that Section. ii. In our opinion and according to the information and explanations given to us, we report that transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lacs during the year are reasonable.

6. The Company had not accepted deposits from the public during the year. The directives issued by the Reserve Bank of India and the provisions of Section 58 A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable

7. In our opinion, the company''s internal audit needs to be strengthened.

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records. under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate or complete.

9. i. Undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Excise Duty, Cess,

TDS and other material statutory dues have been deposited with the appropriate authorities with delays. No undisputed statutory dues were outstanding, as at 31st March 2014 for a period of more than six months from the date they became payable except Panchayat tax amounting to Rs.65,461/-. Further Service tax amounting to Rs.5,35,568/- has not been paid by the company. ii. According to the information and explanations given to us, there are no dues of Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute except dues outstanding of Sales Tax and Income Tax on account of any dispute are as follows :

Name of Nature of Class Amount Period to which Status Class Rs. is relating

Maharastra Tax & Penalty 94,87,225 Sales on higher turnover on reassessment

Income Tax Act, Income Tax 39,80,580 2008 - 09 1961

- Do - 28,018 2007 - 08

- Do - 50,42,790 2006 - 07

- Do - 53,21,692 2005 - 06

- Do - 23,29,884 2004 - 05

- Do - 48,83,986 2003 - 04

NAme pf Status Forum where dispute is pending

Maharastra Sales Joint Commissioner & Sales Ta x (Appellate) Mumbai.

Income Tax Act Appeal filed by Company against Assessment order 1961 before CIT(A)

Department filed appeal before ITAT

Department filed appeal before ITAT

Company filed appeal before ITAT

Department filed appeal before ITAT

Appeal filed before CIT(A)

10. The Company does not have accumulated losses more than fifty percent of its net worth at the end of the financial year but it has incurred cash losses during the financial year covered by our audit. It had incurred cash losses in the immediately preceding financial year also.

11. Based on our audit procedures and as per the information and explanations given by the management the company has delayed in repayment of dues to financial institutions for term loan of all twelve installments of Rs.10 lakhs each pertaining to the period April''13 to March,14.

12. According to the information and explanations given to us and based on the documents and records produced before us we report that the Company has not granted loans and advances on the basis of security by way of pledge of share, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi / mutual fund/society. Therefore, the provision of clause 4 (xiii) of paragraph 4 of the Order are not applicable to the company.

14. In our opinion the company is not dealing in or trading in share, securities, debentures and other investment. Accordingly the provision of clause 4 (xiv) of Paragraph 4 of the order are not applicable to the company.

15. According to the information and explanation to us, the company has given guarantee for loan taken by others, from bank or financial institutions. Since such guarantees or counter guarantees given are very old and records to this effect have not been provided to us we are unable to comment upon whether the term and conditions are prejudicial to the interest of the company.

16. Based on information and explanation given to us by the management, we report that the Company has not taken further term loan during the year.

17. According to the information and explanation given to us and on an overall examination of the balance sheet and the cash flow statement of the company, we report that no funds raised on short term basis have been used for long term investment.

18. The Company has not made any preferential allotment of share to the parties or companies covered in the register maintained u/s 301 of the Companies Act, 1956.

19. According to the information and explanations given to us during the period covered by our audit report, we report that no debentures have been issued by the company.

20. The company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statement and as per the information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For CHATURVEDI & CO. Chartered Accountants Registration No. 302137E 60 Bentinck Street CANilima Joshi Kolkata-700069 Partner the 30th May, 2014 (Membership No. 52122)


Mar 31, 2013

Report on the Financial Statement

1. We have audited the accompanying financial statements of Khaitan (india) Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, 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.

Managements'' Responsibilities for the Financial Statement

2. Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies act, 1956 ("the Act"), 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 mis-statement, whether due to fraud or error.

Auditors'' Responsibilities

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conduct our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards required 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 mis-statement.

4. 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 mis-statement 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 the 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.

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

6. Basis of Qualified Opinion

a. Attention is provided to Note no. 13 regarding deferred tax asset which have not been written off amounting to Rs. 3,26,43,751/- being recognised in the Balance Sheet. If the Deferred tax asset had been written off during the year, there would be a loss of Rs 5,14,90,655/- as against the loss of Rs 1,88,46,894/- shown in these financial statements. Deferred tax asset balance in the Balance sheet would amount to ''NIL'' as against Rs 3,26,43,751/- as disclosed in these financial statements.

b. Closing balances of Debtors, Creditors, loans, deposits, advances, demat accounts, and some bank balances are unconfirmed and fixed deposit receipts and National Saving certificates are not available with the company, in respect of which we are unable to express our opinion.

Opinion

7. Attention is drawn to Note No. 2(f) regarding valuation f planted trees, regarding valuation of planted trees on estimated realisable value being technical in nature, we are unable to express our opinion.

8. In our opinion and to the best of our information and according to the explanations given to us, the financial statements subject to the effects of the matters described in the Basis for Qualified Opinion paragraph and emphasis mentioned in para 7 above, 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, 2013.

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

c) in the case of cash flow statement, of the cash flow for the year ended on that date. Report on Other Legal and Regulatory Requirements

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

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

i. 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;

ii. 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,

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

iv. in our opinion, the Balance Sheet, Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards refered to the sub-section (3C) of section 211 of the Companies Act, 1956;

v. on the basis of written representations received from the directors, as on 31st March, 2013 and taken on records by the Board of Directors, none of the Directors are disqualified as on 31st March, 2013, from being appointed as a director in terms of clause (g) of Sub section (1) of Section 274 of the Companies Act, 1956. - vi. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT REFERRED TO IN PARAGRAPH 9 "UNDER REPORT AND OTHER LEGAL ON REGULATORY REQUIREMENTS" SECTION OF OUR REPORT OF EVEN DATE

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

ii) On the basis of information and explanations given to us, we find that Fixed Assets have been physically verified by the management during the year, and there is a programme of verification having regard to the size of the Company and the nature of its fixed assets.

iii) There was no substantial disposal of fixed assets during the year.

2. i) The management has conducted physical verification of inventory at reasonable intervals during the year

ii) The procedures of physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business.

iii) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. i) On the basis of examination of records and according to information and explanations given to us, we report that the Company has not granted any loans, secured or unsecured to/from companies/firms or other parties covered in the register maintained under Section 301 of the Act.

ii) In view thereof, the provision of clause 3(b), (c) & (d) of paragraph 4 of the Order are not applicable to the company.

iii) The Company has taken loan from a company covered in the register maintained under Section 301 of the Companies Act. The maximum amount involved during the year was Rs. 16,95,35,328/- from two parties and the year end balance of loans taken is Rs. 13,08,89,148/- (including interest).

iv) In our opinion the rate of interest and other terms and conditions on which above loans have been taken are not prima facie prejudicial to the interest of the company.

v) According to the information and explanation given to us, the Principal and interest amount where applicable are repayable on demand.

vi) In respect of the said Loans the same are repayable on demand and, therefore, the question of overdue amounts does not arise.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. Further, during the course of our audit no major weakness has been noticed in the internal control systems.

5. i) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred in Section 301 of the Act have been entered into the register required to be maintained under that Section.

ii) In our opinion and according to the information and explanations given to us, we report that transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lacs during the year are reasonable.

6. The Company had not accepted deposits from the public during the year. The directives issued by the Reserve Bank of India and the provisions of Section 58 A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder are not applicable.

7. In our opinion, the Company has an 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 made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate or complete.

9. i) Undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Excise Duty, Cess, TDS and other material statutory dues have generally been regularly deposited with the appropriate authorities except Service Tax and TDS payment which has been delayed.

ii) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which were outstanding at the year end for a period of more than six months from the date they became payable.

10. Company has accumulated losses at the end of the financial year and it has incurred cash losses during the financial year covered by our audit. It had incurred cash losses in the immediately preceding financial year also.

11. Based on our audit procedures and as per the information and explanations given by the management the company has delayed in repayment of dues to financial institutions for term loan of all twelve instalments of Rs. 10 lacs each pertaining to the period April 12 to March, 13.

12. According to the information and explanations given to us and based on the documents and records produced before us we report that the Company has not granted loans and advances on the basis of security by way of pledge of share, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi/mutual fund/society. Therefore, the provision of clause 4 (xiii) of paragraph 4 of the Order are not applicable to the company.

14. In our opinion the company is not dealing in or trading in share, securities, debentures and other investment. Accordingly, the provision of clause 4 (xiv) of Paragraph 4 of the order are not applicable to the company.

15. According to the information and explanation given to us, the company has given guarantee for loan taken by others, from bank or financial institutions. Since such guarantees or counter guarantees given are very old and records to this effect have not been provided to us, we are unable to comment upon whether the terms and conditions are prejudicial to the interest of the company.

16. Based on information and explanation given to us by the management, we report that the Company has not taken further term loan during the year.

17. According to the information and explanation given to us and on and overall examination of the balance sheet and the cash flow statement of the company, we report that no funds raised on short term basis have been used for long term investment.

18. The Company has not made any preferential allotment of shares to the parties or companies covered in the register maintained u/s 301 of the Companies Act, 1956.

19. According to the information and explanations given to us during the period covered by our audit report, we report that no debentures have been issued by thj company.

20. The company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statement and as per the information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For CHATURVEDI & CO.

Registration No. 302137E

Chartered Accountants 60,

Bentinck Street

Kolkata-700069 CA NILiMA JOSHI

the 7th June, 2013 Partner

(Membership No. 52122)


Mar 31, 2010

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

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

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

4. The closing balances of debtors, some creditors, loans, advances, demat account and some bank balances are unconfirmed.

5. Further to our comments in the Annexure referred to above, we report that:

i. 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.

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

iii. In our opinion, the said Balance Sheet, Profit & Los Account 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 except AS-15 where accruing gratuity/leave encashment is treated on cash basis in Sugar & Agriculture Divisions and AS-22 wherein Deferred Tax Assets have not been written off.

iv. In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to Note 1(f) regarding valuation of planted trees, Note- 9 regarding unprovided gratuity and leave encashment liability of Rs.69,79,202 and Rs.2,61,796, Note-16 regarding Deferred Tax Assets amounting to Rs.3,26,43,751/- has been recognised in Balance Sheet resulting in over statement of profit and understatement of liabilities to such extent of the notes to Accounts in Schedule N and read together with other Notes give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

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

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

c) In the Case of Cash Flow Statement of the cash flow for the year ended on that date.

v. Subject to4& 5(iv) above in our opinion, the Company has kept proper books of account as required by law so far as appears from our examination of those books.

vi. On the basis of written representations received from the Directors, as on 31st March, 2010 and taken on records by the Board of Directors, we report that none of the Directors are 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.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF KHAITAN (INDIA) LIMITED ON THE ACCOUNTS AS AT AND FOR THE YEAR ENDED 31 ST MARCH, 2010

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

ii) On the basis of information and explanations given to us, we find that Fixed Assets have been physically verified by the management during the year, and there is a regular programme of verification having regard to the size of the Company and the nature of its fixed assets.

iii) There was no substantial disposal of fixed assets during the year.

2. i) The management has conducted physical verification of inventory at reasonable intervals during the year. ii) The procedures of physical verification of inventory followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business. iii) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. i) On the basis of examination of records and according to information and explanations given to us, we report that the Company has not granted any loans, secured or unsecured to/from companies/firms or other parties covered in the register maintained under Section 301 of the Act.

ii) In view thereof, the provisions of clause 3(b), (c) & (d) of paragraph 4 of the Order are not applicable to the company.

iii) The Company has taken loan from a company covered in the register maintained under Section 301 of the Companies Act. The maximum amount involved during the year was Rs.7,02,97,022 (including interest) from two parties and the year end balance of loans taken is Rs.43,47,022.

iv) In our opinion, the rate of interest and other terms and conditions on which above loans have been taken are not prima facie prejudicial to the interest of the company.

v) According to the information and explanation given to us, the Principal and interest amount where applicable are repayable on demand.

vi) In respect of the said Loans, the same are repayable on demand and, therefore, the question of overdue amounts does not arise.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. Further during the course of our audit no major weakness has been noticed in the internal control systems.

5. i) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred in Section 301 of the Act have been entered into the register required to be maintained under that Section.

ii) In our opinion and according to the information and explanations given to us, we report that there are transactions made in persuasion of such contracts or arrangements exceeding the value of Rupees five lacs during the year are reasonable.

6. The Company had accepted deposits from the public. The directives issued by the Reserve Bank of India and the provisions of Section 58 A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed thereunder, wherever applicable have been complied with. Deposits amounting to Rs 166,000 have been paid but cheques has not cleared till date.

7. In our opinion, the Company has an 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 made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made detailed examination of the records with a view to determine whether they are accurate or complete.

9. i) Undisputed statutory dues including Provident Fund, Employees State Insurance,

Income Tax, Sales Tax, Excise Duty, Cess, TDS and other material statutory dues have generally been regularly deposited with the appropriate authorities except Service Tax payment which has been delayed.

ii) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and Cess which were outstanding at the year end for a period of more than six months from the date they became payable.

iii) According to the information and explanations given to us, there are no dues of Custom Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute. According to the records of the Company and as per the information and explanations given to us, the dues outstanding of Sales Tax and Income Tax on account of any dispute are as follows :

Name of the Statute Nature of Class Amount Forum where

Rs. dispute is pending

Maharastra Sales Tax & penalty on 94,87,225 Joint Commi- ssioner

Tax Act higher turnover on & Sales Tax

reassessment (Appellate) Mumbai

Income tax Act. 1961 Applicability of Rule 4,80,42,913 Commissioner of

8D on Agriculture Income Tax and

Income Income Tax Tribunal

10. The Company does not have accumulated losses at the end of the financial year and it has incurred cash losses amounting to Rs. 1,58,75,206 during the financial year covered by our audit. It had incurred cash losses amounting to Rs.1,27,66,540 in the immediately preceding financial year.

11. Based on our audit procedures and as per the information and explanations given by the management, the company had applied for reschedulement of dues last year and the same have been accepted by the Bank and repayment falls due w.e.f. 01-04-2009. Company has defaulted in repayment of dues to financial institutions, amounting to Rs. 30,00,000 on loan taken from IDBI Bank.

12. According to the information and explanations given to us and based on the documents and records produced before us, we report that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion, the Company is not a chit fund or a nidhi/mutual fund/society. Therefore, the provisions of clause 4 (xiii) of paragraph 4 of the Order are not applicable to the company.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investment. Accordingly the provision of clause 4 (xiv) of Paragraph 4 of the order are not applicable to the company.

15. According to the information and explanation to us, the company has given guarantee for loan taken by others, from bank or financial institutions. Since such guarantees or counter guarantees given are very old and records to this effect have not been provided to us, we are unable to comment upon whether the terms and conditions are prejudicial to the interest of the company.

16. Based on information and explanation given to us by the management, we report that the Company has not taken any term loan during the year.

17. According to the information and explanation given to us and on and overall examination of the balance sheet and the cash flow statement of the company, we report that no funds raised on short term basis have been used for long term investment.

18. The Company has not made any preferential allotment of share to the parties or companies covered in the register maintained u/s 301 of the Companies Act, 1956.

19. According to the information and explanations given to us during the period covered by our audit report, we report that no debentures have been issued by the company.

20. The company has not raised any money through a public issue during the year.

21. Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statement and as per the information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.



For CHATURVEDI & CO.

Chartered Accountants

60, Bentinck Street Nilima Joshi

Kolkata 700 069 Partner

The 23rd July, 2010 (Membership No. 52122)



 
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