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Auditor Report of Kriti Industries (India) Ltd.

Mar 31, 2016

To,

The Members,

Kriti Industries (India) Limited

34, Siyaganj, Indore (M.P.)

Report on the Financial Statements:

We have audited the accompanying financial statements of Kriti Industries (India) Limited ("the Company"), which comprise the Balance Sheet as at March 31,2016, and the Statement of Profit and Loss and Cash Flow Statement for the year ended March 31,2016, 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 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 principles generally accepted in India, including the Accounting Standards specified under Section 133oftheAct, 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

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

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

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

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

An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

1) As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order.

2) As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

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

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

(e) On the basis of the written representations received from the directors as on 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B".

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note 27.3 to the financial statements.

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

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

Kriti Industries (India) Limited

"Annexure A" to the Auditor''s Report

The Annexure referred to in paragraph 1 under "Report on other Legal and Regulatory Requirements" of our Independent

Auditor''s Report of even date on the standalone financial statements to the members of Kriti Industries (India) Limited for the year ended 31- March 2016, we further report that:

(I) a. As informed to us, the Company has maintained proper records, on yearly basis, showing full particulars, including quantitative details and situation of fixed assets.

b. As informed to us, the management of the Company has done physical verification of certain fixed assets at reasonable intervals in accordance with programme of verification, which in our opinion is reasonable, having regard to the size of the company and nature of its assets and no material discrepancies were noticed on such verification.

c. The title deeds of immovable properties are held in the name of the company except the title deeds of the land acquired pursuant to the scheme of demerger in earlier year which are pending for registration in the name of the company.

(ii) As informed to us, the inventory of the Company has been physically verified during the year by the management at reasonable intervals. Discrepancies noticed during the physical verification of stock were not material and have been properly dealt with in the books of accounts of the company.

(iii) As per information and explanation given to us, the Company has granted unsecured loan to one (1) company covered in the register maintained under section 189 of the Companies Act, 2013.

a. In respect of loan granted to the body corporate , the terms and conditions of the loans are prima facie not prejudicial to the interest of the company.

b. The terms of arrangement do not stipulate any repayment schedule and also the loan is repayable on demand. The borrower has been regular in the payment of interest as stipulated.

c. As there is no specified repayment schedule of the loan granted to the body corporate, the clause (iii) (c) of the order is not applicable to the company.

(iv) As per information and explanation given to us, the Company has complied all provisions in respect of loans, investment and guarantees covered under section 185 to section 186 of the Companies Act, 2013.

(v) In our opinion and according to the information and explanations given to us, the Company neither accepted nor invited any deposits from public within the provision of Section 73 to 76 of Companies Act, 2013 and rules made there under.

(vi) 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 the cost records under section 148 (1) of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made detailed examinations of the records with a view to determine whether they are accurate or complete.

(vii) a. According to the information and explanation given to us, the Company has been generally regular in depositing undisputed dues relating to Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Duties of Customs, Duties of Excise, Value Added Tax, Cess and other material statutory dues applicable to it with appropriate authorities. There are no undisputed statutory dues payable which are outstanding as at March 31, 2016 for a period of more than 6 months from the date they became payable.

b. According to the information and explanations given to us, following dues of Income Tax, Sales Tax, Service Tax, duties of Customs, duties of Excise or Value Added Tax has not been deposited on account of any dispute:-

Name of the Statute (Nature of the Dues)

Forum where Matter is pending

Period to which the amounts relates

Amount (in Rs.)

Central Excise

CESTAT , Delhi

2006-07

97000

Central Sales Tax

High Court

2005-06

7238189

Central Sales Tax

High Court

2006-07

1335795

Entry Tax

Appellate Board , Bhopal

2007-08

1808843

Central Excise

CESTAT , Delhi

2007-08, 2008-09

1825043

Central Sales Tax

Appellate Board , Bhopal

2008-09

114553

Central Excise

Commissioner of Central Excise (Appeals)

2008-09 to 2012-13

1688478

Central Excise

Commissioner of Central Excise (Appeals)

2008-09

81000

Central Excise

Commissioner of Central Excise (Appeals)

2008-09 to 2012-13

2712850

Central Excise

CESTAT , Delhi

2008-09, 2009-10, 2010-11

7188000

Central Sales Tax

Appellate Board , Bhopal

2009-10

227206

Income Tax

Commissioner of Income Tax (Appeals)

2009-10

5830530

Central Excise

CESTAT , Delhi

2008-09, 2009-10

6779192

Service Tax

Commissioner of Central Excise (Appeals)

2009-10, 2010-11

1572709

M.P. Commercial Tax

Appellate Board , Bhopal

2009-10

741835

M.P. Commercial Tax

Appellate Board , Bhopal

2009-10

845026

Central Sales Tax

Appellate Board , Bhopal

2010-11

589001

M.P. Commercial Tax

Appellate Board , Bhopal

2010-11

3154351

Central Excise

CESTAT , Delhi

2010-11, 2011-12

472172

Central Sales Tax

Appellate Board , Bhopal

2011-12

1587144

Central Excise

Commissioner of Central Excise (Appeals)

2011-12, 2012-13

7474000

M.P. Commercial Tax

Appellate Board , Bhopal

2011-12

4405077

Income Tax

Commissioner of Income Tax (Appeals)

2011-12

9933710

Entry Tax

Deputy Commissioner

2012-13

380439

Central Excise

Commissioner of Central Excise (Appeals)

2012-13

2114692

M.P. Commercial Tax

Deputy Commissioner

2012-13

764646

Income Tax

Commissioner of Income Tax (Appeals)

2012-13

2827610

Central Excise

Commissioner of Central Excise (Appeals)

2013-14

3216800

M.P. Commercial Tax

Deputy Commissioner

2013-14

245924

Central Sales Tax

Deputy Commissioner

2013-14

980894

Central Excise

Commissioner of Central Excise (Appeals)

2014-15 , 2015-16

7517771

(viii) According to information and explanations given to us by the management and according to the records of the company examined by us, we are of the opinion that the Company has not defaulted in repayment of any loan from Financial Institutions, Banks or debenture holders.

(ix) To the best of our knowledge and belief and according to the information and explanations given to us and based on documents provided to us, the company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year. However, term loan availed by the Company were, prima-facie, applied by the Company for the purposes for which the loans were obtained.

(x) During the course of our examination of the books of accounts and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on the company by its officers/employees or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

(xi) According to the information and explanation given to us, and based on documents provided to us, the managerial remuneration has been paid /provided in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act, 2013.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanation given to us, and based on document provided to us, all transactions with the related parties are in compliance with section 188 & section 177 of the Companies Act, 2013 where applicable and details of such transactions to the extent required has been disclosed in the financial statements as required by applicable accounting standards.

(xiv)According to the information and explanation given to us, the Company has not made any preferential allotment/private placement of shares or fully or partly convertible debenture during the year.

(xv) According to the information and explanation given to us, the Company has not entered into any non-cash transactions with Directors or Persons connected with him.

(xvi) In our opinion and according to explanations given to us, the company is not required to get registered under section 45-IA of the Reserve Bank of India Act, 1934.

"Annexure B" to the Auditor''s Report

The Annexure referred to in paragraph 2(f) under "Report on other Legal and Regulatory Requirements" of our Independent Auditor''s Report of even date on the standalone financial statements to the members of Kriti Industries (India) Limited for the year ended 31- March 2016.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Kriti Industries (India) Limited ("the Company") as of March 31,2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India ("ICAI"). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and Standards on Auditing, and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and , both issued by ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that:

1. pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31,2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For Rakesh Kumar & Associates

Chartered Accountants

FRN: 002150C

Rakesh KumarGupta

Partner M. No: 070906

Indore

May 12th, 2016


Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 u/s 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent, and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation ofthefinancial statementsthatgivea true and fair view tofraud or error.

Auditor's Responsibility

Ourresponsibility isto express an opinion on thesefinancial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are requiredtobeincludedintheauditreportunder the provisions of the Actand the Rules madethereunder. We conducted our audit in accordance with the Standards on Auditing specified u/s 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonableassuranceabout whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors 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 on adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation ofthefinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion onthefinancial 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, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor's Report) Order, 2015 (the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) We have sought and obtained all the information and explanations which to the best of our knowledgeand beliefwere necessary for the purposesofouraudit.

(b) In our opinion, proper books of accounts and required by law have been kept by the Companyso far as itappears from ourexamination ofthose books.

(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this report areinagreementwiththebooks of account.

(d) In our opinion the aforesaid standalone financial statements comply with the Accounting Standards specified u/s 133 ofthe Act, read with the standalone Rule 7 of the Companies (Accounts) Rules, 2014.

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

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

(i) The Company has disclosed the impact of pending litigations as at 31st March, 2015 on its financial position in its financial statements.

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

(iii) There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended 31st March, 2015.

Referred to in paragraph 1 under the heading "Report on other Legal and Regulatory Requirements" of our report of even date on the standalone financial statements as of and forthe year ended31st March, 2015.

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

(b) The Company has physically verified certain assets during the year in accordance with a programme of verification, which in our opinion provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(ii) (a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) (a) The company has granted unsecured loans to 1 company covered in the register maintained under Section 189 ofthe Act.

(b) In the case of loan granted to the body corporate listed in the register maintained u/s 189 of the Act, the borrower has been regular in the payment ofinterest as stipulated.

(c) The terms of arrangement do not stipulate any repayment schedule and the loan is repayable on demand. Accordingly clause 'C for repayment is not applicable.

(d) There is no overdue amount of more than Rs. 1 lac in respect of the loan granted to the bodies corporate as listed in the registermaintained u/s 189 oftheAct.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to acquisition of properties, fixed assets and with regard to the sale of properties and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) The Company has not accepted any deposits from the public within the meaning of section 73 and 74 of the Actand the rules framed there under tothe extent notified.

(vi) We have broadly reviewed the cost records maintained by the company pursuant to the Companies Cost Record & Audit Rule, 2014, prescribed by the Central Government under section 148(1) ofthe Act and we are ofthe opinion that prima facie the prescribed cost records have been maintained. We have however not made detailed examination ofthe cost records with a view to determine whether they are adequate andcomplete.

(vii) (a) According to the information and explanations given to us and the records ofthe Company examined by us, the particulars of dues of sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and othermaterial statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us, following amounts have not been deposited as on 31st March, 2015 on account ofany dispute:

Nature of dues Related period Forum where the Amount dispute is pend ing

Central Sales Tax 2005-06 High Court 7238189

Central Sales Tax 2006-07 High Court 1335795

Entry Tax 2007-08 Appellate Board, Bhopal 1808843

Central Sales Tax 2008-09 Appellate Board, Bhopal 114553

Central Sales Tax 2009-10 Appellate Board, Bhopal 227206

M.P. Commercial Tax 2009-10 Appellate Board, Bhopal 741835

M.P. Commercial Tax 2009-10 Appellate Board, Bhopal 901426

Central Sales Tax 2010-11 Appellate Board, Bhopal 634351

M.P. Commercial Tax 2010-11 Appellate Board, Bhopal 3326751

Central Sales Tax 2011-12 Appellate Board, Bhopal 1692994

M.P. Commercial Tax 2011-12 Appellate Board, Bhopal 4698777

Central Sales Tax 2012-13 Deputy Commissioner 1165146

Entry Tax 2012-13 Deputy Commissioner 475639

M.P. Commercial Tax 2012-13 Deputy Commissioner 1227546

Income Tax 2011-12 Commissioner of Income Tax (Appeals) 7806890

Income Tax 2012-13 Commissioner of Income Tax (Appeals) 17640910

(c) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956(1 of 1956) and rules madethereunder has been transferred to such fund withintime.

(viii) The Company neither has any accumulated losses nor has incurred any cash losses during the financial yearcovered byourauditandthe immediately precedingfinancial year.

(ix) According to the information and explanations given to us, the Company has not defaulted in repayment of dues tobanksor debentures holders.

(x) To the best of our knowledge and belief and according to the information and explanations given to us, the Companyhasnotgivenany guarantee for loanstaken by othersfrom bankorfinancial institutions.

(xi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the terms loans obtained during the year were, prima facie, applied by the Company for the purpose for whichtheywere obtained.

(xii) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of matrial fraud on or by the Company, noticed or reported during theyear, nor havewe been informed ofany such case bythe Management.

For R. D. Asawa & Co. Chartered Accountants (FRN 001164C) Place: Indore. (CA. R. D. Asawa) Dated : 20th May, 2015. Proprietor (M.No.016562)


Mar 31, 2014

We have audited the accompanying financial Statements of Kriti Industries (India) Limited ("the Company"), which comprise the Balance Sheet as at 3lst March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the Accounting Standards referred to in sub-section 3(C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13.09.2013 issued by the Ministry of Corporate Affairs, in respect of section 133 of the Companies Act, 2013 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express and 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the 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 bu not for the purpose of expressing an opinion on 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 the 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 3lst March, 2014,

(b) In the case of the Statement of Profit and Loss, of the profit of the Company for the year ended on that date, and

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

Report on Other Legal and Regulatory Requirements

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

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

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appear from our examination of those books.

(c) The Balance sheet, Statement of Profit and Loss and Cash Flow Statement, dealt with by this Report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting standards referred to in the Companies Act, 1956 read with General Circular 15/2013 dated 13.09.2013 issued by the Ministry of Corporate Affairs, in respect of section 133 of the Companies Act, 2013

(e) On the basis of the written representations received from the directors as on 3lst March, 2014, taken on record by the Board of Directors, none of the directors is disqualified as on 3lst March,2014 from being appointed as a director in terms of clause (g) of sub-section(l) of Section 274 of the Act.

Annexure to the Independent Auditor''s Report Referred to in Paragraph 1 under the Heading of "Report on other legal and regulatory requirements" of our report of even date

1. In respect of Company''s fixed assets:

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

(b) The Company has physically verified certain assets during the year in accordance with a programme of verification, which in our opinion provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the company during the year.

2. In respect of Company''s inventories:

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

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

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

(a) In respect Company has granted unsecured loans to 2 party, covered in the register maintained U/S 301 of the Act, and amount involved is Rs. 2332.00 lacs.

(b) Rate of interest and other terms and conditions of loan given are not primafacie prejudicial to the interest of company.

(c) In our opinion receipt of principal and interest is regular as stipulated.

(d) In our opinion there is no overdue of interest or principal.

(e) Company has taken unsecured loan from 3 parties covered in the register maintained U/S 301 of the Act, and amount involved is Rs. 640 lacs.

(f) Rate of Interest and other terms and conditions of loan taken are primafacie not prejudicial to the interest of the company.

(g) Company is regular in repaying principle amount and interest as stipulated.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services Further, the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under that Section, have been so entered.

(b) According to the information and explanations given to us, there are transaction for purchase of DEPB Licenses etc, in excess of Rs.5lacs in respect of each party covered u/s 301 of the Act. There is no similar transaction available for comparison and therefore reasonableness of price/value of transaction could not be ascertained. However there are no other transaction for sale/purchase of services etc.

6. The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under and therefore clause is not applicable to the company.

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

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

9. (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year.

(b) The disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Nature of dues Related Forum where dispute is Amount(Rs.> pending

Central Sales Tax 2004-05 High Court 1836995

Central Sales Tax 2005-06 High Court 7238189

Central Sales Tax 2006-07 High Court 1335795

Entry Tax 2007-08 Appellate Board BHOPAL 1808843

Central Excise Tax 2007-08 Deputy Commissioner 947051

Central Sales Tax 2008-09 Appellate Board BHOPAL 114553

Central Excise Tax 2010-11 Comm. Appeal(1), Indore 2662714

Central Sales Tax 2009-10 Appellate Board BHOPAL 227206

Central Sales Tax 2010-11 Appellate Board BHOPAL 724979

M.P. Commercial Tax 2009-10 Appellate Board BHOPAL 741835

M.P. Commercial Tax 2010-11 Appellate Board BHOPAL 3802001

Income Tax 2011-12 CIT (A), Indore 13306890

10. The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses during the current and the immediately preceding financial year.

11. Based on our audit procedures and as per the information and explanation given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institutions, banks or debenture holders.

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

13. The provisions of any special statute applicable to chit fund / nidhi /mutual benefit fund / societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. Company has not given any guarantees for loans taken by others from banks or institutions, and therefore commenting over terms and conditions does not arise.

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company for the purposes for which the loans were obtained.

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

18. The Company has not made preferential allotment of shares to the parties and companies covered under section 301 of the Act.

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

20. The Company has not raised any money by public issue during the year, and therefore question of end use does not arise.

21. 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 was noticed or detected during the year.

Place : Indore For R. D. Asawa & Co. , Chartered Accountants

Dated : 29th May, 2014 (FRN 001164C)

R. D. Asawa, Proprietor, Membership No.16562


Mar 31, 2012

1) We have audited the attached Balance Sheet of Kriti Industries (India) Limited as at 31st March, 2012 and also the Statement of Profit and Loss and the Cash Flow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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) Further to our comments in 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 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 such books.

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

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

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 31st March, 2012 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012. ii) In the case of Statement of Profit and Loss, of the profit for the year ended on that date, and iii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date

4. As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and according to information & explanation given to us on our enquiries and on the basis of such checks we considered appropriate, we further state that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. (b) The Company has physically verified certain assets during the year in accordance with a programme of verification, which in our opinion provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the company during the year. (ii) (a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) (a) Company has granted unsecured loans to 1 party, covered in the register maintained U/S 301 of the Companies Act, 1956. Outstanding of loan given at the year end Rs.90 lacs and maximum outstanding during the year 668.25 lacs.

(b) Rate of interest and other terms and conditions of loan given are not prima-facie prejudicial to the interest of company.

(c) In our opinion receipt of principal and interest is regular as stipulated.

(d) In our opinion there is no overdue of interest or principal.

(e) Company has taken unsecured loan from 2 parties covered in the register maintained U/S 301 of the Companies Act, 1956 amount involved Nil, maximum Outstanding during the year 941.67 lacs .

(f) Rate of interest and other terms and conditions of loan taken are not prima-facie prejudicial to the interest of the company.

(g) Payment of principal and interest is regular as stipulated.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that need to be entered into the register maintained under that Section, have been so entered.

(b) According to the information and explanations given to us, there are transaction for purchase of DEPB Licenses etc, in excess of Rs.5 lacs in respect of each party. There is no similar transaction available for comparison and therefore reasonableness of price/value of transaction could not be ascertained. However there are no other transaction for sale/purchase of services etc.

vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the

Companies Act, 1956 and the rules framed there under and therefore clause is not applicable to the company.

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

viii) The Company is not required to maintain cost records in terms of Sec 209(1) (d) of the Companies Act, 1956.

ix) (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year.

(b) According to the records of the Company, the disputed dues in respect of Sales Tax, Entry Tax and Central Excise Tax are as under:

S.no. Nature of dues Related Period Amount (Rs.)

1 Central Sales Tax 2004-05 1836995

2 Central Sales Tax 2005-06 7238189

3 Central Sales Tax 2006-07 1335795

4 VAT Tax 2007-08 3947024

5 Entry Tax 2007-08 1808843

6 Entry Tax 2007-08 425618

7 Central Excise Tax 2007-08 947051

8 Central Sales Tax 2008-09 114553

9 Central Excise Tax 2010-11 2662714

10 VAT Tax 2011-12 118750

11 Entry Tax 2011-12 23750

S.no. Forum where dispute is pending

1 High Court

2 High Court 3 High Court

4 Appellate Board BHOPAL

5 Appellate Board BHOPAL

6 Appellate Board BHOPAL

7 Deputy commissioner

8 Appellate Board BHOPAL

9 Comm. Appeal(1), Indore

10 Deputy commissioner

11 Deputy commissioner

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses during the current and the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanation given by the management, we are of the

opinion that the company has not defaulted in the repayment of dues to financial institutions, banks or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

(xv) Company has not given any guarantees for loans taken by others from banks or institutions, and therefore commenting over terms and conditions does not arise.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima-facie, applied by the Company for the purposes for which the loans were obtained.

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

(xviii) The Company has not made preferential allotment of shares to the parties and companies covered under section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issue during the year, and therefore question of end use does not arise. (xxi) 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 was noticed or detected during the year.

For R.D Asawa & Co. Chartered Accountants (FRN O1164C)

(R.D. ASAWA) Proprietor M.No. 16562

PLACE : Indore DATED : 26th May, 2012


Mar 31, 2011

1) We have audited the attached Balance Sheet of Kriti Industries (India) Limited as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2) We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. 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) Further to our comments in 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 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 such books.

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

d) In our opinion, the Balance Sheet, Profit and Loss 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.

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) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

ii) in the case of Profit and Loss Account, of the profit for the year ended on that date, and

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

4. As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and according to information & explanation given to us on our enquiries and in consideration of the scheme of arrangement as per note No 17 to the notes on accounts and on the basis of such checks we considered appropriate, we further state that:

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

(b) The Company has physically verified certain assets during the year in accordance with a programme of verification, which in our opinion provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the company during the year.

(ii) (a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) (a) Company has granted unsecured loans to 2 company, covered in the register maintained U/S 301 of the Act. outstanding of loan given at the year end Rs. 50 lacs and maximum outstanding during the year Rs. 1779.40 lacs.

(b) Rate of interest and other terms and conditions of loan given are not prima-facie not prejudicial to the interest of company.

(c) In our opinion receipt of principal and interest is regular as stipulated

(d) In our opinion there is no overdue of interest or principal.

(e) Company has taken unsecured loan from a company covered in the register maintained u/s 301 of the Act, amount involved Nil, maximum Outstanding during the year Rs. 496.96 lacs

(f) Rate of interest and other terms and conditions of loan taken are not prima-facie prejudicial to the interest of the company.

(g) Payment of principal and interest is regular as stipulated

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services further, the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under that Section, have been so entered.

(b) According to the information and explanations given to us, there are transaction for purchase of DEPB Licenses etc, in excess of Rs.5 lacs in respect of each party. There is no similar transaction available for comparison and therefore reasonableness of price/value of transaction could not be ascertained. However there are no other transaction for sale/purchase of services etc.

vi) The Company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under and therefore clause is not applicable to the company.

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

viii) The Company is not required to maintain cost records in terms of Sec 209(1) (d) of the Companies Act, 1956.

ix) (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State insurance, Income-tax, Sales-tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year.

(b) According to the records of the Company, the disputed dues in respect of Sales Tax, Entry Tax and Income Tax are as under:

S.no. Nature of dues Related Amount(Rs.) Forum where Period dispute is pending

1 Central Sales 2004-05 1836995 Appellate Board Tax

2 Central Sales 2005-06 7238189 Deputy Tax commissioner

3 Central Sales 2006-07 1335795 Deputy Tax commissioner

4 VAT Tax 2007-08 4934024 Deputy commissioner

5 Entry Tax 2007-08 1808843 Appellate Board

6 Central Excise 2007-08 947051 Deputy Duty commissioner

7 Entry tax 2007-08 532118 Deputy commissioner

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses during the current and the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanation given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institutions, banks or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statute applicable to chit fund / nidhi /mutual benefit fund / societies are not applicable to the Company.

(xiv) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

(xv) Company has not given any guarantees for loans taken by others from banks or institutions, and therefore commenting over terms and conditions does not arise.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima-facie, applied by the Company for the purposes for which the loans were obtained.

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

(xviii) The Company has not made preferential allotment of shares to the parties and companies covered under section 301 of the Act.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issue during the year, and therefore question of end use does not arise.

(xxi) 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 was noticed or detected during the year.

For SUBHASH DESHPANDE & CO. CHARTERED ACCOUNTANTS F.R.N. 000476C

(R.D. ASAWA) PARTNER M.No. 16562

PLACE : INDORE DATED: 21st May, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Kriti Industries (India) Limited as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company 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. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant 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. Further to our comments in 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 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 such books.

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

d) In our opinion, the Balance Sheet, Profit and Loss 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.

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 of the 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) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010. ii) In the case of Profit and Loss Account, of the profit for the year ended on that date, and iii) In the case of Cash Flow Statement, of the cash flows for the year ended on that date

4. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and according to information & explanation given to us on our enquiries and in consideration of the scheme of arrangement as per note No 17 to the notes on accounts and on the basis of such checks we considered appropriate, we further state that:

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

(b) The Company has physically verified certain assets during the year in accordance with a programme of verification, which in our opinion provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us no material discrepancies were noticed on such verification.

(c) On the demerger of the companys solvent division with Kriti Nutrients Ltd, and hived off of engineering and moulding division with Kriti Auto & Engineering Plastic Pvt. Ltd. as Per note no. 17 to the Notes on Accounts, Companys going concern concept is not effected since pipe division is independent and still with company.

(ii) (a) As explained to us, inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) (a) Company has granted unsecured loans to a subsidiary company, Maximum amount outstanding during the year Rs. 16.39 lacs, however closing balance was Rs.1.25 lacs.

(b) Rate of interest and other terms and conditions of loan given are not prima-facie prejudicial to the interest of company.

(c) Receipt of principal and interest are regular as stipulated.

(d) Since receipt of principal and interest is regular as stipulated and therefore question of overdue does not arise.

(e) Company has taken unsecured loan from a company covered in the register maintained U/S 301 of the Act, amount involved 368.04lacs, maximum outstanding during the year 1031.30 lacs.

(f) Rate of interest and other terms and conditions of loan taken are not prima-facie prejudicial to the interest of the company.

(g) Payment of principal and interest is regular as stipulated.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, the basis of our examination of the books and records of the company and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under that Section, have been so entered.

(b) According to the information and explanations given to us, there is no transaction in excess of Rs; 5 lakhs in respect of any party and hence the question of reasonable prices in respect of such transactions regards to the prevailing market prices does not arise.

vi) The Company has not accepted any deposits from the public within the meaning of Sections 58 A and 58 AA of the Act and the rules framed there under and therefore clause is not applicable to the company.

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

viii) The Company is not required to maintain cost records in terms of Sec 209(1) (d) of the Companies Act, 1956.

ix) (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, the Company has been generally regular in depositing,undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues as applicable with the appropriate authorities during the year. (b) According to the records of the Company, the disputed dues in respect of Sales Tax, Entry Tax and Income Tax are as under:

S.No. Nature of dues Related Period Amount (Rs.) Forum where dispute is pending

1 Central Sales Tax 2004-05 1836995 Appellate Board

2 Central Sales Tax 2005-06 7238189 Deputy commissioner

3 Central Sales Tax 2006-07 1335795 Deputy commissioner

4 Entry Tax 2006-07 63822 Deputy commissioner

5 Entry Tax 2007-08 1808843 Appellate Board

6 Central Excise Duty 2004-05 775000 CESTAT

7 Central Excise Duty 2004-05 1700000 CESTAT

8 Central Excise Duty 2006-07 2329153 CESTAT

9 Central Excise Duty 2007-08 520544 CESTAT

10 Central Excise Duty 2008-09 1825043 CESTAT

11 Central Excise Duty 2008-09 165657 CESTAT

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses during the current and the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanation given by the management, we are of the opinion that the company has not defaulted in the repayment of dues to financial institutions, banks or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced before us, the Company has not given any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The provisions of any special statute applicable to chit fund / nidhi /mutual benefit fund / societies are not applicable to the Company.

(xiv) In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

(xv) Company has not given any guarantees for loans taken by others from banks or institutions, and therefore commenting over terms and conditions does not arise.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima-facie, applied by the Company for the purposes for which the loans were obtained.

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

(xviii)The Company has not made preferential allotment of shares to the parties and companies covered under section 301 of the Act.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by public issue during the year, and therefore question of end use does not arise. (xxi) 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 was noticed or detected during the year.

For Subhash Deshpandc & Co.

Chartered Accountants

(FRN-000476c)

(R.D. Asawa) Place : Indore Partner

Date : 19th May 2010 M.No. 16562

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