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Auditor Report of Mohit Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of MOHIT INDUSTRIES LIMITED ('the Company'), which comprise the balance sheet as at 31 March 2015, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness ofthe 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 ofthe Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

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

Basis of Qualified Opinion

The company has not provided for Long Term Employee Benefits such as Gratuity and Leave Encashment on accrual basis but provides the same as and when they become due for payment. This method of accounting of Long Term Employee Benefits is in deviation with Accounting Standard-15 on Employee Benefits in respect of provision for Long Term Employee Benefit & Defined Benefit plans. As there is no actuarial report or basis of calculation available with the management of such long term employee benefits, the quantum of deviation cannot be determined. If the company had followed the method accounting as per AS - 15, then employee benefit expense would have increased and correspondingly long term provision would have also increased for such employee benefits.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of matter described in the 'Basis of Qualified Opinion' Paragraph above, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

1) We draw attention to Note No. 28(i) on "Contingent Liabilities" forming part of financial statements which describes various tax demands liabilities against the Company under litigation.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

2. As required by Section 143(1) ofthe Act, we report that:-

a) The company has sold shares at the price which is less than purchase price of the shares and has incurred a loss of Rs. 40.37 Lakhs.

3. As required by Section 143(3) ofthe Act, we report that:-

a) We have sought & 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 accounts as required by law have been kept by the company so far as appears from our examination of such books.

c) The Balance Sheet, the Statement of Profit & 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 except for Accounting Standard-15 on Employee Benefits in respect of provision for Long Term Employee Benefit & Defined Benefit plans.

e) In our opinion, the tax demands litigation matters described in sub-paragraph (1) under the 'Emphasis of Matters' paragraph above, if decided against the company, may have an adverse effect on the functioning of the Company.

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

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 28(i) 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.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in Paragraph '1' under "Report on Other Legal and Regulatory Requirements' of our report of even date)

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

(b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified at reasonable intervals. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification.

ii. (a) Physical verification of inventory has been conducted 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 are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. As explained to us, no material discrepancies were noticed on such physical verification

iii. As informed to us, the company has not granted loans to companies, firms or other parties covered in the Register maintained under section 189 of the Companies Act, 2013 ('the Act'). Hence, provisions of Paragraph 3 (iii) (a) and (b) the Order are not applicable.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business with regard to purchases of inventories and fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control systems.

v. According to information & explanation given to us, the company has not accepted any deposit from the public.

vi. As explained to us, the company is maintaining cost accounts and records prescribed by the Central Government under section 148 (1) of the Companies Act, 2013. However, these cost accounts/records were not examined by us.

vii. (a) The company has generally been regular in depositing the undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, applicable to it, with the appropriate authorities.

According to the information and explanation given to us, no undisputed amounts in respect of income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess were in arrears, as at 31st March, 2015 for a period of more than six months from the date they became payable.

(b) Details of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax (VAT), Entry Tax and Cess which have not been deposited as on 31 March, 2015 on account of disputes are given below:-

Nameof The Natureof Amount Period to Statute Dues (Rs. In which the Lakhs) amount relates

Sales Tax Law of Gujarat Sales Tax 4.86 FY 2001-02

Gujarat VAT Act Gujarat VAT 460.81 FY 2006-07

Gujarat Entry Tax Laws Gujarat EntryTax 433.18 FY 2006-07

Gujarat VAT Act Gujarat VAT 455.07 FY 2006-07

Gujarat Entry Tax Laws GujaratEntryTax 513.82 FY 2009-10

Gujarat VAT Act Gujarat VAT 301.49 FY2010-11

Gujarat Entry Tax Laws Gujarat Entry Tax 323.53 FY 2010-11

Central Excise Act ExciseDuty& 174.74 F.Y. 2012-13 Penalty

Central Excise Act Excise duty rebate 8.90 F.Y. 2013-14 rejection

Finance Act, 1994 Service Tax & 7.90 Sept. 2005to Penalty March 2010

Nameof The Forum where Statute dispute is pending

Sales Tax Law of Gujarat Gujarat Value Added Tax Tribunal

Gujarat VAT Act Gujarat Value Added Tax Tribunal

Gujarat Entry Tax Laws Gujarat Value Added Tax Tribunal

Gujarat VAT Act Gujarat Value Added Tax Tribunal

Gujarat Entry Tax Laws Gujarat Value Added Tax Tribunal

Gujarat VAT Act The order is dated 30-03-2015 and appeal is pending to be filed before First Appellate Authority.

Gujarat Entry Tax Laws The order is dated 27-03-2015 and appeal is pending to be filed before First Appellate Authority.

Central Excise Act CESTAT, Ahmedabad

Central Excise Act Commissioner (Appeals), Surat

Finance Act, 1994 CESTAT, Ahmedabad

(c) According to the information and explanation given to us, there is no amount required to be transferred to investor education and protection fund in accordance with relevant provision of the Companies Act, 1956 and rules made thereunder. Thus, Paragraph 3(vii) (c) ofthe Order is not applicable.

viii. The company does not have any accumulated losses at the end of financial year. The company has not incurred cash loss during the financial year covered by our audit and in immediately preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to the banks or financial institutions. As explained to us, no debenture has been issued by the company.

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

xi. According to information and explanations given to us, we are of the opinion that the term loans have been applied for the purposes for which they were raised.

xii. According to the information and explanations given to us, no material fraud on or by the company has been noticed or reported during the course of our audit.

For RKM & CO. Chartered Accountants Firm Registration No.: 108553W

(DeepakV. Bhatia) Place : Surat Partner Date : 30.05.2015 M. No. 102465


Mar 31, 2014

We have audited the accompanying financial statements of MOHIT INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, Statement of Profit & Loss and Cash Flow Statement for the year then ended, and summary of 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 financial position, financial performance and cash flows of the company in accordance with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s 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 company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and subject to Note No. 2(F) of Notes to Accounts forming part of Financial Statements in respect of provision of Long Term Employee Benefits & Defined Benefit Plan, give a true and fair view in conformity with the accounting principles generally accepted in India:-

(a) In the case of Balance Sheet, of the state of affairs of the company as at 31st March, 2014,

(b) In case of the Statement of Profit & Loss, of the Profit of the company for the year ended on that date.

(c) In case of the cash flow statement, of the cash flows of the company for the year ended on that date.

Emphasis of Matter

1) We draw attention to Note No. 28(i) on "Contingent Liabilities" forming part of financial statements.

2) We also draw attention to Note No. 37 in respect of "Change in Accounting Policy" forming part of financial statements, relating to accounting treatment of foreign exchange fluctuation in respect of Long Term Monetary Liabilities of the company which has been added to Cost of Depreciable Assets in accordance with Paragraph 46A of AS - 11 on "The Effects of Changes in Foreign Exchange Rates" of the Companies (Accounting Standards) Rules, 2006 due to which the Profit and Tangible Fixed Assets of the company, both are higher by Rs. 83.13 Lakhs.

Report on Other Legal and Regulatory Requirements

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

2. As required by Section 227(1A) of the Act, we report that:-

a) The company has sold shares at the price which is less than purchase price of the shares and has incurred a loss of Rs. 20.39 Lakhs.

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

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

b) In our opinion, proper books of accounts 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 & Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet and the Statement of Profit & Loss and the cash flow statement comply with the Accounting Standard notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 except for Accounting Standard-15 on Employee Benefits in respect of provision for Long Term Employee Benefit & Defined Benefit plans.

e) On the basis of the written representations received from the directors as on 31st March, 2014 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Since the Central Government has not issued any notification as to the rate at which 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 ''1'' under "Report on Other Legal and Regulatory Requirements'' of our report of even date)

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

(b) These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

(c) During the year, the company has disposed off Factory Land & Building of its Silvassa Unit. However, in our opinion, it does not affect the ''going on concern'' status of the company.

ii. (a) Physical verification of inventory has been conducted by the management at reasonable intervals.

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

(c) The company is maintaining proper records of inventory. As explained to us, no material discrepancies were noticed on such physical verification.

iii. (a) The company has granted advances in the nature of loans to companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956. The numbers of parties to whom such advances have been granted are five. The maximum amount involved during the year was Rs. 74.54 Lakhs and the year end balance was Nil.

(b) In our opinion and as explained to us, the rate of interest and other terms and conditions on which the advances in the nature of loans have been granted to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, are, prima facie, prejudicial to the interest of the company as no interest has been charged from them.

(c) As explained to us, the payment of principal and interest, wherever applicable, in respect of advances so given are regular.

(d) As explained to us, there are no overdue amounts of principal or interest in respect of advances so given.

(e) As explained to us, the company has taken loans from parties covered in the Register maintained under section 301 of the Companies Act, 1956. The number of parties from whom loans have been taken is one. The maximum amount involved during the year was Rs. 380.60 Lakhs and the year end balance is Nil.

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

(g) As explained to us, the payment of principal and interest as applicable in respect of the loans taken is regular.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control

system commensurate with the size of the company and nature of its business with regard to purchases of

inventories and fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control systems.

v. (a) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act, that need to be entered into the register maintained under section 301, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs have been entered into during the financial year at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

vi. According to information & explanation given to us, the company has not accepted any deposit from public.

vii. As explained to us, the company has an in-house internal audit system commensurate with the size of the company and nature of its business.

viii. As explained to us, the company is maintaining accounts and records prescribed by the Central Government under section 209(l)(d) of the Companies Act, 1956. However, no such accounts/records were verified by us.

ix. (a) The company has generally been regular in depositing the undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it with appropriate authorities. According to the information and explanations given to us, no undisputed amounts in respect of income tax, sales tax, service tax, wealth tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us, there are no dues of custom duty, wealth tax and cess which have not been deposited on account of any dispute. The disputed sales tax of Rs. 4.86 Lakhs, VAT of Rs. 974.63 Lakhs, Entry Tax of Rs. 433.18 Lakhs, Central Excise Duty & Penalty of Rs. 235.07 Lakhs and Service Tax & Penalty of Rs. 7.90 Lakhs have not been deposited on account of disputed matters pending before appropriate authorities as under:-

Name of The Statute Nature of Dues Amount Rs Period to which the in Lakhs amount relates

Sales Tax Law of Sales Tax 4.86 FY 2001-02 Gujarat

Gujarat VAT Act Gujarat VAT 460.81 FY 2006-07

Gujarat EntryTax Laws Gujarat Entry Tax 433.18 FY 2006-07

Gujarat VAT Act Gujarat VAT 513.82 FY 2009-10

Central Excise Act Excise Duty & 174.74 F.Y. 2012-13 Penalty

Central Excise Act Excise Duty & 14.72 March, 2008 to Penalty October, 2010

Central Excise Act Excise Duty & 44.60 August, 2010 to Penalty March, 2010

Central Excise Act Excise Duty & 1.01 F.Y. 2008-09 Penalty

Finance Act, 1994 Service Tax & 7.90 Sept. 2005 to Penalty March 2010

Name of The Statute Forum where dispute is pending

Sales Tax Law of Gujarat Gujarat Value Added Tax Tribunal

Gujarat VAT Act First Appellate Authority (The matter has been set aside by Gujarat VAT Tribunal)

Gujarat EntryTax Laws First Appellate Authority (The matter has been set aside by Gujarat VAT Tribunal)

Gujarat VAT Act The order is dated 29-03-2014 and appeal is pending to be filed before First Appellate Authority.

Central Excise Act CESTAT, Ahmedabad

Central Excise Act Commissioner of Central Excise (Appeals)

Central Excise Act CESTAT, Ahmedabad

Central Excise Act CESTAT, Ahmedabad

Finance Act, 1994 CESTAT, Ahmedabad

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

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution, bank or debenture holders during the year.

xii. In our opinion, and according to the information and explanations given to us and based on information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. The company has maintained proper records regarding transactions and contracts for trading of shares and has done timely entries in such records. According to the informations and explanations given to us, all the investments are in the company''s own name.

xv. According to information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, provisions of Clause 4(xv) of the Order are not applicable to the company.

xvi. According to information and explanations given to us, we are of the opinion that the term loans have been applied for the purposes for which they were raised.

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

xviii. The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies act, 1956. Hence, the provisions of Clause 4(xviii) of the Order are not applicable to the company.

xix. The company has not issued debentures during the year. Hence, the provisions of Clause 4(xix) of the Order are not applicable to the company.

xx. The company has not made any public issue during the year. Hence, the provisions of Clause 4(xx) of the Order are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year under consideration.

For RKM & CO. Chartered Accountants Firm Registration No.: 108553W

(DeepakV. Bhatia) Place : Surat Partner Date : 30.05.2014 M. No. 102465


Mar 31, 2013

Report of the Financial Statements

We have audited the accompanying financial statements of MOHIT INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, Statement of Profit & Loss and Cash Flow Statement for the year then ended, and summary of 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 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'') and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s 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 for the purpose of expressing an opinion on the effectiveness of the company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

1) Without qualifying our report, we draw attention to Note No. 28(ii) forming part of the financial statements.

2) In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and subject to Note No. 2(F) of Notes to Accounts forming part of Financial Statements in respect of provision of Long Term Employee Benefits & Defined Benefit Plan, give a true and fair view in conformity with the accounting principles generally accepted in India:- (a) In the case of Balance Sheet, of the state of affairs of the company as at 31st March, 2013,

(b) In case of the Statement of Profit & Loss, of the Profit of the company for the year ended on that date.

(c) In case of the cash flow statement, of the cash flows of the company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

2. As required by Section 227(3) of the Act, we report that:- a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion, proper books of accounts 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 & Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet and the Statement of Profit & Loss and the cash flow statement comply with the Accounting Standards referred to Section 211 (3C) of the Act except for Accounting Standard-15 on Employee Benefits in respect of provision for Long Term Employee Benefit & Defined Benefit plans.

e) On the basis of the written representations received from the directors as on 31st March, 2013 and taken on record by the Board of Directors, we report that none of the directors is 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.

f) Since the Central Government has not issued any notification as to the rate at which 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 ''1'' under "Report on Other Legal and Regulatory Requirements'' of our report of even date)

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

(b) These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

(c) The company has not disposed off substantial part of fixed assets during the year.

ii. (a) Physical verification of inventory has been conducted by the management at reasonable intervals.

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

(c) The company is maintaining proper records of inventory. As explained to us, no material discrepancies were noticed on such physical verification.

iii. (a) The company has granted advances in the nature of loans to companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956. The numbers of parties to whom such advances have been granted are six. The maximum amount involved during the year was Rs. 110.34 Lakhs and the year end balance was Rs. 31.99 Lakhs.

(b) In our opinion and as explained to us, the rate of interest and other terms and conditions on which the advances in the nature of loans have been granted to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, are, prima facie, prejudicial to the interest of the company as no interest has been charged from them.

(c) As explained to us, the payment of principal and interest, wherever applicable, in respect of advances so given are regular.

(d) As explained to us, there are no overdue amounts of principal or interest in respect of advances so given.

(e) As explained to us, the company has taken loans from parties covered in the Register maintained under section 301 of the Companies Act, 1956. The number of parties from whom loans have been taken are two. The maximum amount involved during the year was Rs. 344.03 Lakhs and the year end balance is Rs. 232.11 Lakhs.

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

(g) As explained to us, the payment of principal and interest as applicable in respect of the loans taken is regular.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business with regard to purchases of inventories and fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control systems.

v. (a) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act, that need to be entered into the register maintained under section 301, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs have been entered into during the financial year at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

vi. According to information & explanation given to us, the company has not accepted any deposit from public.

vii. As explained to us, the company has an in-house internal audit system commensurate with the size of the company and nature of its business.

viii. As explained to us, the company is maintaining accounts and records prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956. However, no such accounts/records were verified by us.

ix. (a) There has been delay in depositing the dividend distribution tax under section 115O of the Income Tax Act, 1961 of Rs. 30.88 Lakhs. The company has generally been regular in depositing the undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it with appropriate authorities. According to the information and explanations given to us, no undisputed amounts in respect of income tax, sales tax, service tax, wealth tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2013 for a period of more than six months from the date they became payable.

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

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution, bank or debenture holders during the year.

xii. In our opinion, and according to the information and explanations given to us and based on information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. The company has maintained proper records regarding transactions and contracts for trading of shares and has done timely entries in such records. According to the informations and explanations given to us, all the investments are in the company''s own name.

xv. The company has given guarantee to State Bank of Travancore in respect of loan taken by Mohit Overseas Limited, in which the company is one of the main promoters. According to information and explanations given to us, we are of the opinion that the terms and conditions of guarantee so given are not, prima facie, prejudicial to the interest of the company.

xvi. According to information and explanations given to us, we are of the opinion that the term loans have been applied for the purposes for which they were raised.

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

xviii. The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies act, 1956. Hence, the provisions of Clause 4(xviii) of the Order are not applicable to the company.

xix. The company has not issued debentures during the year. Hence, the provisions of Clause 4(xix) of the Order are not applicable to the company.

xx. The company has not made any public issue during the year. Hence, the provisions of Clause 4(xx) of the Order are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year under consideration.

For RKM & CO.

Chartered Accountants

Firm Registration No.: 108553W

(Ramesh Kumar Malpani)

Place: Surat Partner

Date: 31-05-2013 M. No. 33840


Mar 31, 2012

We have audited the attached Balance Sheet of MOHIT INDUSTRIES LTD., as at 31st March, 2012 and also the Profit and Loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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 the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis forouropinion.

As required by the Companies (Auditor's Report) Order, 2003 ('the Order') issued by the Central Government in terms of section 227(4A) 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.

Further to our comments in the Annexure referred to in paragraph above, we report that: -

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

b) In our opinion proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books.

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

d) In our opinion, the Balance Sheet and 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 except for Accounting Standard-15 on Employee Benefits in respect of provision for Long Term Employee Benefit & Defined Benefit plans.

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) Without qualifying our report, we draw attention to Note No. 27(ii) & (iii) forming part of the financial statements.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and subject to Note No. 2(F) of Notes to Accounts forming part of Financial Statements in respect of provision of Long Term Employee Benefits & Defined Benefit Plan, give a true and fair view in conformity with the accounting principles generally accepted in India:-

1) In the case of Balance Sheet, of the state of affairs of the company as at 31st March, 2012,

2) In case of the Profit & Loss account, of the Profit of the company for the year ended on that date.

3) In case of the cash flow statement, of the cash flows of the company for the year ended on that date.

i. (a) The Company has maintained proper records showing full particulars including quantitative details

and situation of fixed assets.

(b) These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

(c) During the year, the company has disposed off the AAC Blocks Unit at Palghar. In our opinion, the disposal of the Unit does not adversely affect the going on concern status of the company as the company is continuing its other businesses and is also in process of setting up another Unit of AAC Blocks at Umargam, Gujarat.

ii. (a) Physical verification of inventory has been conducted by the management at reasonable intervals.

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

(c) The company is maintaining proper records of inventory. As explained to us, no material discrepancies were noticed on such physical verification.

iii. (a) The company has granted advances in the nature of loans to companies and other parties covered in

the register maintained under section 301 of the Companies Act, 1956. The numbers of parties to whom such advances have been granted are six. The maximum amount involved during the year was Rs. 107.65 Lakhs and the year end balance was Rs. 18.80 Lakhs.

(b) In our opinion and as explained to us, the rate of interest and other terms and conditions on which the advances in the nature of loans have been granted to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, are, prima facie, prejudicial to the interest of the company as no interest has been charged from them.

(c) As explained to us, the payment of principal and interest, wherever applicable, in respect of advances so given are regular.

(d) As explained to us, there are no overdue amounts of principal or interest in respect of advances so given.

(e) As explained to us, the company has taken loans from parties covered in the Register maintained under section 301 of the Companies Act, 1956. The number of parties from whom loans have been taken are four. The maximum amount involved during the year was Rs. 200.71 Lakhs and the year end balance is Rs. 0.03 Lakhs.

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

(g) As explained to us, the payment of principal and interest as applicable in respect of the loans taken is regular.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business with regard to purchases of inventories and fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control systems.

v. (a) According to the information and explanation given to us, we are of the opinion that the particulars of

contracts or arrangements referred to in section 301 of the Act, that need to be entered into the register maintained under section 301, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs have been entered into during the financial year at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

vi. According to information & explanation given to us, the company has not accepted any deposit from public.

vii. As explained to us, the company has an in-house internal audit system commensurate with the size of the company and nature of its business.

viii. As explained to us, the company is maintaining accounts and records prescribed by the Central Government under section 209(l)(d) of the Companies Act, 1956. However, no such accounts/records were verified by us.

ix. (a) There has been delay in depositing the dividend distribution tax under section 1150 of the Income

Tax Act, 1961 of Rs. 28.37 Lakhs. The company has not deducted E.S.I., hence question of its payment does not arise. In respect of other undisputed statutory dues including provident fund, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it, the company has generally been regular in depositing these dues with appropriate authorities. According to the information and explanations given to us, no undisputed amounts in respect of income tax, sales tax, service tax, wealth tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2012 for a period of more than six months from the date thev became Davable.

(b) According to the information and explanation 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. The disputed income tax aggregating Rs. 31.47 Lakhs, VAT of Rs. 465.67 Lakhs and Entry Tax of Rs. 433.18 Lakhs have not been deposited on account of disputed matters pending before appropriate authorities as under:-

Name Nature Amount Period to Forum where of of (Rs. in which the dispute is The Statute Dues Lakhs) amount relates pending

Income Tax Act, 1961 Income Tax 0.73 AY 2008-09 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income Tax 30.74 AY 2009-10 Commissioner of Income Tax (Appeals)

Sales Tax Law of Gujarat Sales Tax 4.86 FY 2001-02 Gujarat Value Added Tax Tribunal

Gujarat VAT Act, 2003 Gujarat VAT 60.81 FY 2006-07 Gujarat Value Added Tax Tribunal

Gujarat Entry Tax Laws Gujarat Entry Tax 433.18 FY 2006-07 Gujarat Value Added Tax Tribunal

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

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution, bank or debenture holders during the year.

xii. In our opinion, and according to the information and explanations given to us and based on information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. The company has maintained proper records regarding transactions and contracts for trading of shares and has done timely entries in such records. According to the informations and explanations given to us, all the investments are in the company's own name except investment in Government Securities (Kisan Vikas Patra) which are held in the name of directors on behalf of the company.

xv. The company has given guarantee to State Bank of Travancore in respect of loan taken by Mohit Overseas Limited, in which the company is one of the main promoters. According to information and explanations given to us, we are of the opinion that the terms and conditions of guarantee so given are not, prima facie, prejudicial to the interest of the company.

xvi. According to information and explanations given to us, we are of the opinion that the term loans have been applied for the purposes for which they were raised.

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

xviii. The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies act, 1956. However, during the year the company has allotted the shares against share warrants issued in earlier years to the parties and companies covered in the register maintained under section 301 of the Act. The price at which the warrants were issued is in compliance with SEBI rules and regulations.

xix. The company has not issued debentures during the year. Hence, the provisions of Clause 4(xix) of the Order are not applicable to the company.

xx. The company has not made any public issue during the year. Hence, the provisions of Clause 4(xx) of the Order are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year under consideration.

For RKM & CO.

Chartered Accountants Firm Registration No.: 108553W

(RAMESH KUMAR MALPANI)

Place : Surat Partner

Date : 24-08-2012 M. No. 33840


Mar 31, 2011

We have audited the attached Balance Sheet of MOHIT INDUSTRIES LTD., as at 31st March, 2011 and also the Profit and Loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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 the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basisforouropinion.

As required by the Companies (Auditor's Report) Order, 2003 ('the Order') issued by the Central Government in terms of section 227(4A) 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.

Further to our comments in the Annexure referred to in paragraph above, we report that:-

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

b) In our opinion proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books.

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

d) In our opinion, the Balance Sheet and 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 except for Accounting Standard-15 on Employee Benefits in respect of provision for Long Term Employee Benefit & Defined Benefit plans.

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) Without qualifying our report, we draw attention to Note No. 2(a)(ii) & (iii) in Schedule "T" on 'Significant Accounting Policies & Notes to Accounts' annexed to and forming part of the financial statements.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and subject to Note No. 1(E) of Schedule 'V of Significant Accounting Policies and Notes on Accounts in respect of provision of Long Term Employee Benefits & Defined Benefit Plan, give a true and fair view in conformity with the accounting principles generally accepted in India:-

1) In the case of Balance Sheet, of the state of affairs of the company as at 31st March, 2011,

2) In case of the Profit & Loss account, of the Profit of the company for the year ended on that date.

3) In case of the cash flow statement, of the cash flows of the company for the year ended on that date.

ANNEXURE TO AUDITORS' REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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

(b) These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

(c) The company has not disposed off substantial part of fixed assets during the year.

ii. (a) Physical verification of inventory has been conducted by the management at reasonable intervals.

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

(c) The company is maintaining proper records of inventory. As explained to us, no material discrepancies were noticed on such physical verification.

iii. (a) The company has granted advances in the nature of loans to companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956. The numbers of parties to whom such advances have been granted are two. The maximum amount involved during the year was Rs. 191.31 Lac and the year end balance was Rs. 3.11 Lac.

(b) In our opinion and as explained to us, the rate of interest and other terms and conditions on which the advances in the nature of loans have been granted to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, are, prima facie, prejudicial to the interest of the company as no interest has been charged from them.

(c) As explained to us, the payment of principal and interest, wherever applicable, in respect of advances so given are regular

(d) As explained to us, there are no overdue amounts of principal or interest in respect of advances so given.

(e) As explained to us, the company has taken loans from parties covered in the Register maintained under section 301 of the Companies Act, 1956. The number of parties from whom loans have been taken are three. The maximum amount involved during the year was Rs. 29.09 Lac and the yearend balance is Rs. 12.58 Lac.

(f) In our opinion, the rate of interest and other terms and conditions on which the loan has been taken are not, prima facie, prejudicial to the interests of the company.

(g) As explained to us, the payment of principal and interest as applicable in respect of the loan taken is regular.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business with regard to purchases of inventories and fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control systems.

v. (a) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act, that need to be entered into the register maintained under section 301, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs have been entered into during the financial year at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

vi. According to information & explanation given to us, the company has not accepted any deposit from public.

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

viii. As explained to us, the company is maintaining accounts and records prescribed by the Central Government under section 209(l)(d) of the Companies Act, 1956. However, no such accounts/records were verified by us.

ix. (a) As explained to us, laws of Employee State Insurance are not applicable to the company. In respect of other undisputed statutory dues including provident fund, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it, the company has generally been regular in depositing the same with appropriate authorities. According to the information and explanations given to us, no undisputed amounts in respect of income tax, sales tax, service tax, wealth tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2011 for a period of more than six months from the date they become payable except for Dividend Distribution Tax ofRs. 17.43 Lacs which is still payable.

(b) According to the information and explanation 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. The disputed income tax aggregating Rs. 9.79 Lac, sales tax of Rs.465.67 Lac and Entry Tax of Rs. 433.18 Lac have not been deposited on account of disputed matters pending before appropriate authorities as under:-

Name of Nature of Amount Period to Forum which where The Statute Dues (Rs.) the amount dispute relates is pending

Income Tax Act, Income Tax 9.79 AY 2008-09 Commissioner 1961 of Income Tax (Appeals)

Sales Tax Law Sales Tax 4.86 FY 2001-02 Commissioner of Gujarat (Appeals)

Gujarat VAT Act, Gujarat VAT 460.81 FY 2006-07 Commissioner 2003 (Appeals)

Gujarat Entry Gujarat 433.18 FY 2006-07 Commissioner Laws Entry (Appeals) Tax

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

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution, bank or debenture holders during the year.

xii.In our opinion, and according to the information and explanations given to us and based on information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. The company has maintained proper records regarding transactions and contracts for trading of shares and has done timely entries in such records. According to the informations and explanations given to us, all the investments are in the company's own name except investment in Government Securities (Kisan Vikas Patra) which are held in the name of directors on behalf of the company.

xv. The company has given guarantee to State Bank of Travancore in respect of loan taken by Mohit Overseas Limited, in which the company is one of the main promoters. According to information and explanations given to us, we are of the opinion that the terms and conditions of guarantee so given are not, prima facie, prejudicial to the interest of the company.

xvi. According to information and explanations given to us, we are of the opinion that the term loans have been applied for the purposes for which they were raised.

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

xviii.The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies act, 1956.

xix. The company has not issued debentures during the year. Hence, the provisions of Clause 4 (xix) of the Order are not applicable to the company

xx. The company has not made any public issue during the year. Hence, the provisions of Clause 4(xx) of the Order are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year under consideration.

For RKM & CO. Chartered Accountants Firm Registration No.: 108553W

(RAMESH KUMAR MALPANI) Place : Surat Partner Date : 26-07-2011 M. No. 33840






Mar 31, 2010

We have audited the attached Balance Sheet of MOHIT INDUSTRIES LTD., as at 31st March, 2010 and also the Profit and Loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the 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 the management as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 (the Order) issued by the Central Government in terms of section 227(4A) 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.

Further to our comments in the Annexure referred to in paragraph above, we report that: -

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

b) In our opinion proper books of accounts as required by law have been kept by the company so far as appears from our examination of those books.

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

D) In our opinion, the Balance Sheet and 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 except for Accounting Standard-15 on Employee Benefits in respect of provision for Long Term Employee Benefit & Defined Benefit plans.

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) Without qualifying our report, we draw attention to Note No. 2(a)(iii) in Schedule "S" on Significant Accounting Policies & Notes to Accounts annexed to and forming part of the financial statements.

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon give the information required by the Companies Act, 1956 in the manner so required and subject to Note No. 1(E) of Schedule S of Significant Accounting Policies and Notes on Accounts in respect of provision of Long Term Employee Benefits & Defined Benefit Plan, give a true and fair view in conformity with the accounting principles generally accepted in India :-

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

2) In case ofthe Profit & Loss account, ofthe profit ofthe company for the year ended on that date.

3) In case of the cash flow statement, of the cash flows of the company for the year ended on that

ANNEXURE TO AUDITORS REPORT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

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

(b) These fixed assets have been physically verified by the management at reasonable intervals. No material discrepancies were noticed on such verification.

(c) The company has not disposed off substantial part of fixed assets during the year.

ii. (a) Physical verification of inventory has been conducted by the management at reasonable intervals.

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

(c) The company is maintaining proper records of inventory. As explained to us, no material discrepancies were noticed on such physical verification.

iii. (a) The company has granted advances in the nature of loans to companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956. The numbers of parties to whom such advances have been granted are four. The maximum amount involved during the year was Rs. 4.38 Crores and the year end balance was Rs. 1.91crores.

(b) In our opinion and as explained to us, the rate of interest and other terms and conditions on which the advances in the nature of loans have been granted to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956, are, prima facie, not prejudicial to the interest of the company.

(c) As explained to us, the payment of principal and interest, wherever applicable, in respect of advances so given are regular

(d) As explained to us, there are no overdue amounts of principal or interest in respect of advances so given.

(e) The company has not taken loans from companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence, provisions of clause 4(iii) (e) to (g) of the Order are not applicable.

iv. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and nature of its business with regard to purchases of inventories and fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control systems.

v. (a) According to the information and explanation given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act, that need to be entered into the register maintained under section 301, have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding the value of Rupees five lakhs have been entered into during the financial year at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

vi. According to information & explanation given to us, the company has not accepted any deposit from public.

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

viii. As explained to us, the company is maintaining accounts and records prescribed by the Central Government under section 209(l)(d) of the Companies Act, 1956. However, no such accounts/records were verified by us.

ix. (a) As explained to us, laws of Employee State Insurance are not applicable to the company. In respect of other undisputed statutory dues including provident fund, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, cess and other material statutory dues applicable to it, the company has generally been regular in depositing the same with appropriate authorities. According to the information and explanations given to us, no undisputed amounts in respect of income tax, sales tax, service tax, wealth tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2010 for a period of more than six months from the date they become payable.

(b) According to the information and explanation given to us, there are no dues of custom duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute. The disputed income tax aggregating Rs. 11,93,890/- sales tax of Rs. 4,86,462/- have not been deposited on account of disputed matters pending before appropriate authorities as under: -

Name of Nature of Amount Period to which Forum where The Statute Dues (Rs.) the amount relates dispute is pending

Income Tax Income Tax 11,93,890/- AY 2007-08 Commissioner Act, 1961 of Income Tax (Appeals)

Sales Tax Sales Tax 4,86,462/- FY 2001-02 Commissioner Law of Gujarat (Appeals)

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

xi. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution, bank or debenture holders during the year.

xii. In our opinion, and according to the into, nation and explanations given to us and based on information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, deov.r-ures and other securities.

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

xiv. The company has maintained proper records regarding transactions and contracts for trading of shares and has done timely entries in such records. According to the informations and explanations given to us, all the investments are in, the companys own name except investment in Government Securities (Kisan Vikas Patra) which are held in the name of directors on behalf of the company.

xv. The company has given guarantee to State Bank of Travancore in respect of loan taken by Mohit Overseas Limited, in which the company is one of the main promoters. According to information and explanations given to us, we are of the opinion that the terms and conditions of guarantee so given are not, prima facie, prejudicial to the interest of the company.

xvi. According to information and explanations given to us, we are of the opinion that the term loans have been applied for the purposes for which they were raised except for a sum ofRs. 147.86 Lakhs raised during the year in Term Loan VI from State Bank ofTravancore.

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

xviii. The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies act, 1956.

xix. The company has not issued debentures during the year. Hence, the provisions of Clause 4(xix) of the Order are not applicable to the company.

xx. The company has not made any public issue during the year. Hence, the provisions of Clause 4(xx) of the Order are not applicable to the company.

xxi. According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year under consideration.

For RKM & CO.

Chartered Accountants Firm Registration No.: 10S553W

(RAMESH KUMAR MALPANI)

Partner

M. No. 33840

Place : Surat

Date : 05-08-2010

 
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