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Auditor Report of Nitco Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of NITCO Limited ("the Company"), which comprise the Balance Sheet as at March 31, 201 5, the Statement of Profit and Loss and Cash Flow Statement for year ended 31st March 201 5 and a summary of significant accounting policies and other explanatory information

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

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

AUDITORS' RESPONSIBILITY

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

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

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 14-3(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 misstatements

6. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give 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 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

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

QUALIFIED OPINION

8. In our opinion and to the best of our information and according to the explanations given to us, except for the matters illustrated and described in the Basis for Qualified Opinion herein below, 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

in the case of the balance sheet, of the state of affairs of the Company as at 31st March 201 5 ii. in the case of the statement of profit and loss, of the Loss for the year ended on that date; and iii. in the case of the cash flow statement, of the cash flows for the year ended on that date

BASIS FOR QUALIFIED OPINION

9. The Company on the basis of the registration of reference filed u/s 15(1) of the Sick Industrial Companies (Special Provision] Act 1985, before the Hon'ble Board for Industrial & Financial Reconstructions, has not provided for interest on financing

r facilities amount to Rs. 107,39.55 Lacs for the year ended March 31, 2015. Had the same been provided, the loss for the year ended March 31, 2015 would have increased byRs. 107,39.55 Lacs and corresponding liabilities would have increased by Rs. 107,39.55 Lacs as at March 31, 2015.

EMPHASIS OF MATTER

10. Without qualifying, attention is drawn as under:

a) Financial Statements has been prepared on a going concern basis. The Company has incurred a net loss of Rs. 12,722.21 Lacs during the year ended March 31, 201 5 and the Company's net worth has been fully eroded as at the balance sheet date. The appropriateness of the going concern basis is inter alia dependent on the Company's ability to turnaround the operations of the Company and ability of infusing requisite funds for meeting its obligations and rescheduling of debts

b) Note no. 38 to the financial statements relating to Corporate Debt Restructuring (CDR) package approved by the CDR Empowered Group

c) The dues to banks / lenders are subject to reconciliation

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

11. (1) As required by the Companies (Auditor's Report) Order, 201 5 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 14-3 of the Act, based on the comments in the auditors' reports of the Holding company and subsidiary companies, incorporated in India, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable

11. (2) As required by Section 14-3(3) of the Act, we report, to the extent applicable, 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 Profit and Loss Statement, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account

d) In our opinion, except for the effect of the matter described in the Basis of Qualified Opinion above the aforesaid standalone financial statements comply with the Accounting Standards specified under Sect ion 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 March 31, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 201 5, 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 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 as referred to in Note 37 to the financial statements

(ii) Except for the effect of the matter described in the Basis of Qualified Opinion,(point no.9 above), the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and as required on long-term contracts including derivative contracts wherever applicable

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

Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report of even date i) In respect of its fixed assets

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information

b) The fixed assets are physically verified by the management, according to a phased programme to cover all items over a period of three years, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. Pursuant to this programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies were noticed on such physical verification

ii) In respect of its inventories

a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable

b) 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 has maintained proper records of inventories and discrepancies noticed on physical verification conducted by the management of inventories as compared to book records were not material

[iii] a) According to the information and explanation given to us, the Company has not granted any loan to Companies, firms or other parties covered under section 189 of the Companies Act 2013 except interest free loans and advances to it's subsidiaries company. The maximum amount outstanding at any time during the year is Rs. 17,127.80 lacs and the balance as on the Balance Sheet date is also the same

b) In our opinion since the advance has given to its subsidiaries, it is not prejudicial to the interest of the Company

c) There is no repayment schedule and loans and advances are repayable on demand

d) In respect of the loans granted by the Company, the same are repayable on demand and therefore the question of overdue amount does not arise

[iv] In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct major weaknesses in internal control system of the Company in respect of these areas

[v] According to the information and explanations given to us, the Company has not accepted any deposit from the public Therefore, the provisions sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under are not applicable to the Company

[vi] We have broadly reviewed the cost records maintained by the Company prescribed by the Central Government under Section 14-8 (1) of the Companies Act, 2013 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

[vii) In respect of statutory dues

a) According to the records of the Company, 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 any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 201 5 for a period of more than six months from the date of becoming payable

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

[Rs. in lacs]

Name of Statute Nature of the dues Forum

Central Excise Commissioner Central Excise & Customs

Excise Duty Customs,Excise &Service Tax Act, IV44 Appellate Tribunal, (CESTAT), Mumbai

Commissioner Central Excise & Customs.

Custom Act, 1962 Customs Duty Customs, Excise & Service Tax Appellate Tribunal, (CESTAT) Mumbai

Sales Tax/VAT VAT Jt Commissioner of Sales Tax

Tribunal

Revision Board

Dy. Commiss ioner of Sales tax

Asst. Commissioner Appeal

Income Tax Act, Income Tax High Court 1961 Commissioner of Income Tax (Appeal)

Name of Statute Amount Year to which amount relates

Centeral Excise 252.82 Act, 1944 1,671.54 FY 2007 to 2012 Customs Act 1962 1,570.29

4.04 FY 2004-05 to 2013-14

Sales Tax VAT 1,108.23 FY 1997-98 to 2011

6.74 FY 2009-10

92.56 FY 2007-2011

37.98 FY 2006-2009

71.71 FY 2011-2015

Income Tax Act 9.63 Block 1987-1997 1961 28.83 Penalty for block 1987- 1997

c) According to the records of the Company, 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 made hereunder has been transferred to such fund within time

[xiii] The Company has accumulated losses as at the Balance Sheet date. Further the Company has incurred cash losses during the financial year covered by our audit and also during the immediately preceding financial years. The Company's accumulated losses as on the date of the Balance Sheet has exceeded its net worth

[ix] In our opinion, on the basis of audit procedures and according to the explanation and information given to us, the Company has defaulted in repayment of dues to banks and financial institutions. Estimated unpaid over dues in respect of principal outstanding amount to Rs. 30,937.66 lacs and overdue interest amounts to Rs. 11,552.65 lacs subject to the reconciliation with the banks / financial institutions. The period of default ranges around 6-1 2 months

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

[xi] In our opinion, the term loans were applied for the purpose for which they were obtained

[xii] In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year

For A. Husein Noumanali & Co.

Chartered Accountants

Firm Registration No. 107173W

(A. Husein Noumanali] Proprietor

M. No. U757

Mumbai, 29th May 2015


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i. in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2014;

ii. in the case of the statement of profit and loss, of the Loss for the year ended on that date; and

iii. in the case of the cash flow statement, of the cash flows for the year ended on that date.

Emphasis of matter

Without qualifying, attention is drawn as under:

a) Basis of preparation of financial Statements regarding the preparation of the same on a going concern basis. The Company has incurred a net loss of Rs.21,123.37 Lacs during the year ended March 31, 2014 while, the Company''s net worth remains positive as at the balance sheet date. Since the company have incurred significant cash losses during the last two financial years resulting in substantial erosion of its net worth and will make a reference to BIFR as more than 50% of its peak net worth stands eroded, the Company has already made a request to banks for rework the approved CDR package, non core assets also identified for sale, and several steps taken by the Company In view of proposed plan to restructure the Company''s debt profile to convert their short term loan to long term loan ,these financial statements have been prepared on a going concern basis and no adjustment has been made to the carrying value of the assets and liabilities.

b) Note no. 36 to the financial statements relating to Corporate Debt Restructuring (CDR) package approved by the CDR Empowered Group.

c) The balances of funded interest on Term Loan from banks aggregating to Rs.15035.19 Lacs are subject to reconciliation.

d) The balances of Working Capital Term Loan from banks aggregating to Rs.59258.88 Lacs are subject to reconciliation.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, 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:

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

ii. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from branched not visited by us;

iii. 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 and with the returns received from branches not visited by us;

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

v. on the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 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.

ANNEXURE TO 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 its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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 has maintained proper records of inventories and discrepancies noticed on physical verification conducted by the management of inventories as compared to book records were not material.

3. a) According to the information and explanation given to us, the Company has granted Interest free Loans and Advances to a wholly owned subsidiary company which is also covered u/s 301 the Companies Act 1956. The maximum amount outstanding at any time during the year is Rs.15285.93 Lacs and the year end balance is also the same.

b) In our opinion since this advance is to hundred percent owned subsidiary, it is not prejudicial to the interest of the Company.

c) There is no repayment schedule and loans and advances are payable on demand.

d) In respect of the loans granted by the Company, the same are repayable on demand and therefore the question of overdue amount does not arise.

e) According to the information and explanation given to us, the Company has taken interest free unsecured loan from one party covered in the register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs. 7.90 crores and the same was repaid during the year

f) In our opinion, the rate of interest and other terms and conditions of such loan are not prima facie prejudicial to the interest of the company. Since the aforesaid amount is repaid during the year therefore, provisions of clause 4(iii)(g) of the Companies (Audit Report) Order, 2003 are not applicable.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

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

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

6. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

7. In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the management have been commensurate with the size of the company and 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. In respect of statutory dues:

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax/TDS, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2014 for a period of more than six months from the date of becoming payable.

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

Rs. in Lacs

Name of Statute Nature of the Forum dues

Central Excise Excise Duty Commissioner Central Excise & Act, 1944 Customs.

Customs, Excise &Service Tax Appellate Tribunal, (CESTAT), Mumbai

Customs Act, 1962 Customs Duty Commissioner Central Excise & Customs.

Customs, Excise &Service Tax Appellate Tribunal, (CESTAT), Mumbai

Sales Tax/ VAT VAT Jt Commissioner of Sales Tax

Rs. in Lacs

Name of Statute Amount Period to which amount relates

Central Excise 249.15 FY 2007 to 2012 Act, 1944 1,649.96

Customs Act, 1962 1574.33 FY 2004-05 4.04 to 2013-14 Sales Tax/ VAT 472.86 FY 2006 to 2010

10. The Company''s accumulated losses at the end of financial year were more than fifty percent of its net worth. Further the Company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

11. In our opinion, on the basis of audit procedures and according to the explanation and information given to us, the Company has not defaulted in repayment of dues to banks/financial institutions/debenture holders in view of the debt restructuring approved under CDR mechanism. However, there have been delays in interest payment of Rs. 1,444.53 lacs as on 31st March 2014.

12. In our opinions and according to the explanations given to us and based on the 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.

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

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

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

16. In our opinion, the term loans are being applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of Cash Flow Statement and other records of the company we report that no funds raised on short-term basis has been used during the year for long- term investment and no long term funds have been used to finance short term assets except the loans which has been reclassified under the implementation of CDR package

18. Pursuant to the scheme of CDR the Company has made preferential allotment of shares to a party covered in the register maintained under section 301 of the Companies Act, 1956. In our opinion and according to the information and explanations given to us, the price at which shares have been issued is not prejudicial to the interest of the Company.

19. The Company has not issued any secured debentures during the year. Hence, provisions of Clause 4 (xix) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

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

21. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For A. Husein Noumanali & Co. Chartered Accountants Firm Registration No. 107173W

(A. Husein Noumanali) Place: Mumbai Proprietor Date: May 30, 2014 M. No. 14757


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of NITCO Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India including Accounting Standards referred to in Section 21 I (3C) of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error

Auditors'' Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at March 3 1, 201 3;

b. In the case of the Statement of Profit and Loss, of the loss for the year ended on that date; and

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

Emphasis of Matter

Without qualifying, attention is drawn as under:

a) Note no. 37 to the financial statements relating to Corporate Debt Restructuring (CDR) package approved by the CDR Empowered Group.

b) The balances of Funded interest on Term Loan from banks aggregating to Rs. 9,004.67 Lacs are subject to reconciliation.

c) The balances of Working Capital Term Loan from banks aggregating to Rs. 59,070.12 Lacs are subject to reconciliation.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") as amended, 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:

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

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

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

iv In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 21 I of the Companies Act, 1956;

v. On the basis of the written representations received from the directors as on March 3 1,2013, taken on record by the Board of Directors, none of the directors is disqualified as on March 3 1, 201 3, from being appointed as a director in terms of clause (g) of Sub-Section (I) of section 274 of the Companies Act, 1956.

1. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner; which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories:

a) The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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 inventories. The discrepancies noticed on verification between the physical stocks and the book records have been appropriately dealt in the books of accounts.

3. a) According to the information and explanation given to us, the Company has taken interest free unsecured loan from one party covered in the register maintained under section 301 of the Companies Act l956.The maximum amount involved during the year was Rs. 7.90 crores and year end balance of loan taken from such party is Rs. 7.90 crore. The Company has granted Interest free Loans and Advances to subsidiary companies.The details have been provided in the Notes 32 "Disclosure in respect of related parties pursuant to Accounting Standard 18".

b) In our opinion, the other terms of conditions on which loans mentioned above have been taken are not prima facie prejudicial to the interest of the company. Further; since the advances have been given to subsidiary companies, in our opinion, it is not prejudicial to the interest of the Company.

c) In the absence of stipulations in respect of the terms of payment of principal amount and interest for the loans taken/ granted, it is not possible to comment whether principal or interest payments are regular

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

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

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

6. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 201 I prescribed by the Central Government under Section 209(l)(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. In respect of statutory dues:

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax /TDS, Sales Tax, Wealth Tax, Service Tax, Customs Duty Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at March 3 1,20 I 3 for a period of more than six months from the date of becoming payable.

10.The Company has accumulated losses at the end of financial year which are less than fifty percent of its net worth. Further the Company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year

I I. There have been defaults in repayment of dues to the banks, and financial institutions during the yean which have been subsequently either rescheduled by way of Corporate Debt Restructuring package (CDR) or repaid upto the date of our report.

12. In our opinions and according to the explanations given to us and based on the 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.

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

14 In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor''s Report) Order; 2003 are not applicable to the Company

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

16. In our opinion, the term loans are being applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and on overall examination of balance sheet of the company we report that no funds raised on short-term basis has been used during the year for long-term investment and no long term funds have been used to finance short term assets except the loans which has been reclassified under the implementation of CDR package.

18. 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.

19. The Company has not issued any secured debentures during the year Hence, provisions of Clause 4 (xix) of the Companies (Auditor''s Report) Order; 2003 are not applicable to the Company.

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

21. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year

For A. Husein Noumanali & Co. Chartered Accountants

Firm Registration No. I07I73W

(A. Husein Noumanali)

Place: Mumbai Proprietor

Date: May 30, 2013 M.No. 14757


Mar 31, 2012

We have audited the attached Balance Sheet of M/s NITCO LIMITED as on 31 March, 2012 and also the Profit & Loss Account of the Company for the year ended on that date, annexed thereto and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant 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.

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

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

1) 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;

2) 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 the books;

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

4) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable.

5) On the basis of written representations received from the directors of the Company, as on 31 March, 2012, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31 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.

6) In our opinion and to the best of our information and according to the explanation given to us, the said accounts, read together with the notes to accounts and in particular note no. 27 give the information as required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

a) In the case of the Balance Sheet, of the state of affair of the Company as at 31 March, 2012 and

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

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

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

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) During the year, the Company has not disposed of any substantial / major part of fixed assets.

2 (a) The inventory has been physically verified at reasonable intervals during the year by the Management/ internal Auditors.

(b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory followed by the management/ Internal Auditors 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 inventories in so far as such records were examined by us and no material discrepancies were noticed on physical verification However based on the verification of inventory the management has identified obsolete, slow moving and defective inventory of Rs. 3447.47 lacs and the same has been written off as exceptional items.

3 (a) The Company has granted unsecured loans to wholly owned subsidiary company. The maximum amount outstanding at any time during the year is Rs 15160.59 lacs and the year end balance is same.

(b) The rate of interest on aforesaid loans and advances granted is reasonable. In our opinion rates of interest and other terms and condition of loans are not prejudicial to the interest of company There is no repayment schedule and loans and advances are repayable on demand, therefore clause 4 (iii) (c) & (d) of the Companies (Audit Report) Order,2003 are not applicable.

(e) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act,1956.Therefore, provisions of clause 4(iii)(f) and (g) of the Companies (Audit Report) Order,2003 are not applicable.

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

5 (a) In our opinion and according to the information and explanations given to us, transactions that need to be entered into the Register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions exceeding Rupees Five Lakhs in respect of each party made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits during the year from the public within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules made there under. Hence; the Clause (vi) of the order is not applicable.

7. In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the management have been commensurate with the size of the company and the nature of its business.

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

9 (a) According to the records of the Company the Company is regular in depositing undisputed statutory dues including Employees' State Insurance, Income tax, Sales tax, Wealth-tax, Customs Duty, Excise Duty Cess and other statutory dues with appropriate authorities. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding at 3 1 March, 2012 for a period more than six months from the date they became payable.

(b) According to the records of the Company, the dues of sales tax, income-tax, customs, wealth-tax, excise duty cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under:-

Name of Nature of Amount Forum Statute the dues (Rs./lakhs)

Central Duty demand/ 25.10 Customs, Excise & Excise Act penalty Service Tax Appellate Tribunal, Mumbai

Central Duty demand/ 658.87 Commissioner Central Excise Act penalty Excise (Appeals)

Customs Duty demand/ 390.00 Customs, Excise & Act penalty Service Tax Appellate Tribunal, Mumbai

10. The Company has no accumulated losses as per books of accounts at the end of the financial year It has incurred cash losses in the financial year under report and no cash losses in the immediately preceding financial year

11. In our opinion and according to the information and explanation provided to us, there has been delay in repayment of loan which is outstanding as on March 31, 2012 due to a lender amounting to Rs. 1792.98 lacs which has not been paid till date.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

13. The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual benefit Fund / Societies are not applicable to the Company

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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

16.. According to the information and explanations given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

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

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19 The Company has not issued any secured debentures during the year Hence, provisions of Clause 4 (xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

20 The company has not raised any money by public issue during the year

21 During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing principles in India, and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For A. Husein Noumanali & Co.

Chartered Accountants

Firm Registration No. 107173W

A. Husein Noumanali

Place: Mumbai Proprietor

Date: May 3, 2012 Membership No.: 14757


Mar 31, 2011

We have audited the attached Balance Sheet of M/s NITCO LIMITED as on March 31, 2011 and also the Profit and Loss Account of the Company for the year ended on that date, annexed thereto and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant 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.

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

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

1) 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;

2) 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 the books;

3) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of accounts;

4) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable.

5) On the basis of written representations received from the Directors of the Company, as on March 31, 2011, and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2011 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

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

a) In the case of the Balance Sheet, of the state of affair of the Company as at March 31, 2011 and

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

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

ANNEXURE TO THE AUDITORS' REPORT

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

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) During the year, the Company has not disposed of any substantial/major part of fixed assets.

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

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

(c) The Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material.

3 (a) The Company has not granted or taken any loans

to/from companies, firms or other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956. Accordingly sub clauses b, c & d in relation to rate of interest and terms and conditions, regularity in repayment and overdue amounts are not applicable.

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

5 (a) In our opinion and according to the information and explanations given to us, transactions that need to be entered into the Register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions exceeding Rupees five lakhs in respect of each party made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits during the year from the public within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules made thereunder. Hence, the Clause (vi) of the order is not applicable.

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

8. Paragraph 4 (viii) is not applicable as the Company is not required to maintain cost records u/s 209(1)(d) of the Companies Act, 1956.

9 (a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including Employees' State Insurance, Income tax, sales tax, wealth tax, customs duty, excise duty, cess and other statutory dues with appropriate authorities. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at March 31, 2011 for a period more than six months from the date they became payable.

(b) According to the records of the Company, the dues of sales tax, income-tax, customs, wealth tax, excise duty, cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under:

Name of Nature of Amount Forum Statute the dues (Rs./lakhs)

Central Duty demand/ 19.10 Customs, Excise & Excise Act penalty Service Ta x Appellate Tribunal, Mumbai

Central Duty demand/ 8.27 Commissioner Central Excise Act penalty Excise (Appeals)

Customs Duty demand/ 742 Customs, Excise & Act penalty Service Tax Appellate Tribunal, Mumbai

10. The Company has no accumulated losses as per books of accounts at the end of the financial year and it has not incurred cash losses in the financial year under report and the immediately preceding financial year.

11. The Company has not defaulted in repayment of its dues to financial institutions and banks.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

13. The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual benefit Fund/Societies are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

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

16. According to the information and explanations given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

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

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any secured debentures during the year. Hence, provisions of Clause 4 (xix) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

20 The Company has not raised any money by public issue during the year.

21 During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing principles in India, and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by the management.

For A. Husein Noumanali & Co. Chartered Accountants

Firm Registration No. 107173W

A. Husein Noumanali Place: Mumbai Proprietor

Date: August 12, 2011 Membership No.: 14757




Mar 31, 2010

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

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant 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.

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

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

1) 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;

2) 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 the books;

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

4) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable.

5) On the basis of written representations received from the directors of the Company, as on 31st March 2010, and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

6) In our opinion and to the best of our information and according to the explanation given to us, the said accounts, read together with the notes to accounts and in particular note no. 8 and 9, give the information as required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

a) In the case of the Balance Sheet, of the state of affair of the Company as at 31st March 2010 and

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

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

ANNEXURE TO THE AUDITORS REPORT

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

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out in terms of the phased programme of verification of its fixed assets adopted by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) During the year, the Company has not disposed of any substantial / major part of fixed assets.

2 (a) Physical verification of inventory has been

conducted during the year by the management at reasonable intervals.

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

(c) The Company has maintained proper records of inventories and discrepancies noticed on physical verification of inventories as compared to book records were not material.

3 (a) The Company has not granted or taken any loans

to/from companies, firms or other parties covered in the Register, maintained under Section 301 of the Companies Act, 1956. Accordingly sub clauses b, c & d in relation to rate of interest & terms & conditions, regularity in repayment & overdue amounts are not applicable.

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

5 (a) In our opinion and according to the information and explanations given to us, transactions that need to be entered into the Register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions exceeding Rupees Five Lakhs in respect of each party made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits during the year from the public within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules made thereunder. Hence, the Clause (vi) of the order is not applicable.

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

8. Paragraph 4(viii) is not applicable as the Company is not required to maintain cost records u/s 209(1)(d) of the Companies Act, 1956.

9 (a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including Employees State Insurance, Income tax, Sales tax, Wealth-tax, Customs Duty, Excise Duty, Cess and other statutory dues with appropriate authorities. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31st March 2010 for a period more than six months from the date they became payable.

(b) According to the records of the Company, the dues of Sales tax, Income-tax, Custom Duty, Wealth-tax, Excise Duty, cess which have not been deposited on account of disputes and the forum where the dispute is pending are as under:-

Name of Nature of Amount Forum Statute the dues (Rs./lakhs)

Central Duty demand/ 17.77 Customs, Excise &

Excise penalty Service Tax Appellate

Act Tribunal, Mumbai

Central Duty demand/ 8.27 Commissioner Central

Excise Act penalty

Excise (Appeals)

Customs Duty demand/ 1,589.52 Customs, Excise &

Act penalty Service Tax Appellate

Tribunal, Mumbai

10. The Company has no accumulated losses as per books of accounts at the end of the financial year and it has not incurred cash losses in the financial year under report and the immediately preceding financial year.

11. The Company has not defaulted in repayment of its dues to financial institutions and banks.

12. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

13. The provisions of any Special Statute applicable to Chit Fund, Nidhi or Mutual benefit Fund / Societies are not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

16. According to the information and explanations given to us, the term loans raised during the year have been applied for the purpose for which they were raised.

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

18. The Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has not issued any secured debentures during the year. Hence, provisions of Clause 4 (xix) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

20. The Company has not raised any money by public issue during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing principles in India, and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have been informed of such case by the management.

For A. Husein Noumanali & Co. Chartered Accountants Firm Registration No. 107173

A. Husein Noumanali Place: Mumbai Proprietor Date : 3rd August 2010 Membership No.: 14757



 
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