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Auditor Report of Panchsheel Organics Ltd.

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible lord the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash (lows 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 Thai are reasonable and prudent; and design, implementation and maintenance of" adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required Lo be included in the audit report under the provisions of the Act and the Rules made there under.

Wc 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 aciform 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 me 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. tor 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 standalone financial statement.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by (he 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 Tor the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

2. Ar. required by Section 143 (3) of the Act, we report than:

(a) we have sought and obtained all the information and explanations which to tire 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 hooks:

(c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;

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

(e) on the basis of the written representations received from the directors as on 31 March 2015 taken on record hy tire Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

(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 the financial Statement (Refer Note 26 (ii) (N) (4, 5, 6) of financial statements);

ii. The Company has not made any Long Term contract including derivative contracts, hence, it is not required to make provision for material foreseeable losses.

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

Annexure to the Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report lo the members of the Company on the standalone financial statements for the year ended 31 March 2015, we report that:

(i) In respect of its Fixed Assets

(a) The Company is in process of updating the records showing full particulars, including quantitative details and situation of fixed assets,

(b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) inventory

(a) As explained to us, the inventory has been physically verified during the year by the management;

(b) The 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 is maintaining proper records of inventory. The discrepancy noticed on physical verification of inventory have been properly dealt with in the books of accounts.

(iii) According to the information and explanations given to us, there are no loans{secured or unsecured) granted by the Company to companies, firms or other parties covered in the register maintained under section 189 of The Companies Act, 2013. Hence, para,3{iii)(a) and (b) of the Order is not applicable.

(iv) In our opinion and according to the information and explanations given to user there are adequate internal! control systems commensurate with the size of the company and the nature of its business, for the purchase of inventory and Fixed assets and for the sale of goods & services. During the course of our audit we have not observed any continuing failure to correct major weaknesses in Internal Control.

(v) The Company has not invited the deposits from members. However Company has accepted interest free unsecured ban from directors of the company during the year under review.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government for maintenance of cost records under Clause (d) of Sub- section (1) of Section 209 of the Companies Act, 1956 in respect of its products and are of the opinion that prime facie, the prescribed accounts and records have been made and maintained. However, we have not made detailed examination of the records with the view to determine whether they are accurate or complete.

(vii) Statutory and other dues:

(a) According to the information and explanations given to us and based On hexode examined by us, the Company has been regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees' State insurance, Income tax, Sales Tax, Wealth Tax, Service Tax, Custom duty, Excise Duty, Value Added Tax, Cess, Luxury Tax and any other statutory dues with the appropriate authorities during the year. There is no undisputed amounts of such statutory dues payable as at 31.03.2015 for a period of more than six months from the date they become payable.

(b) According to the information and explanation given to us, details of the dues of Sale Tax, Income Tax and Excise Duty which have not been deposited on account of any dispute are given below:

Name of the Nature of Period to Forum where the Dispute is Statute Dues which the pending Amount Relates

Central Sales Sales Tax, F.Y. 2003-04 The Dy, Commissioner of Tax & VAT Interest & Sales Tax (Appeal 3), Penalty Mumbai

Central Sales Sales Tax, F.Y. 2004-05 The Dy. Commissioner of Tax & VAT Interest & Sales Tax {Appeal 3), Penalty Mumbai

Central Sales Sales Tax F.Y. 2005-05 The Hon'ble Registrar, -MP- Tax Interest & Commercial Tax Appellate Penalty Board, Bhopal (MP)

Central Sales Sales Tax F.Y. 2006-07 The Hon'ble Registrar, -MP- Tax Interest& Commercial Tax Appellate Penalty Board, Bhopal (MP)

Central Sales Sales Tax F.Y. 2007-08 The Hon'ble Registrar, -MP- Tax, VAT & Entry Tax Commercial Tax Appellate Entry Tax and Board,Bhopal (MP)

interest & Penalty

Central Sales Sales Tax, F.Y. 2003-09 The Hon'ble Registrar, -MP- Tax & VAT Interest & Commercial Tax Appellate Penalty Board, Bhopal (MP)

Central Sales Sales Tax, F.Y. 2008-09 The Dy. Commissioner of Tax & VAT& Interests Sales Tax (Appea I),CT Penalty Ernakulum

Central Sates Sales Tax, F.Y. 2009-09 The Dy. Commissi oner of Tax & VAT Interests Commercial Tax -Appelleas- Penalty Indore

income Tax Act 80HHC/80I F.Y.]98-99 The Income Tax Appellate 1961 A/MAT Tribunal, Indore

Income Tax Act, 80HHC/80I F.Y. 1999-00 The Income Tax Appellate 1961 A/MAT Tribunal, Indore

Income Tax Act, 80HHC/80I F.Y. 2000-01 The Income Tax Appellate 1961 A/MAT Tribunal, Indore

Central Excise Excise F.Y. 1999-00 The Asst Registrar, Customs, Act, 1944 Duty Excise & Service Tax Appellate Tribunal, New Delhi

Central Sales Sales tax F.Y 2010-11 The Dy. Commissioner of interest Sales Tax{appeal} Indore

Central Sales Sales tax F.Y 2011-12 The Dy Commissioner of Tax & vat interest & Commercial Tax (Appeals), penalty Indore

Central Sales Sales tax F.Y 2011-12 The Assistant Commissioner Tax & vat interest & of Commercial Tax, Indore penalty

Name of the statue Total Demand Amount (Rs)

Central Sales 6,05,377.00 Tax & VAT

Central Sales 13,75,000.00 Tax & VAT

Central Sales 452,310.00 Tax

Central Sales 12,72,938.00 Tax Central sales Tax Tax, VAT& Entry Tax 591,208, 00

Central Sales 688,435.00 Tax & VAT

Central Sales 2,76,114.00 Tax & VAT

Central Sales 14,85,294,00 Tax & VAT

income Tax 547,634.00 1961

Income Tax Act, 9,03,802.00 1961

Income Tax Act, 7,52,539-00 1961

Central Excise 471,369.00 Act, 1944

Central Sales 10,05,405.00 Tax & vat

Central Sales 24,71,397.00 Tax & vat

Central Sales 50,53,879.00 Tax & vat

(c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection hind in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

(viii) The Company does not have any accumulated losses as at the end of the financial year and has not incurred cash losses during the Financial Year covered by our audit and in the immediately preceding financial year.

(ix) Based on our Audit procedure and on the information and explanation given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution or bank;

(x) There is no guarantee given by the Company for loans taken by others from bank and financial institutions;

(xi) The Company has applied amount of term loans for the purpose for which the term loan was obtained,

(xii) To the best of our knowledge and belief and according to the explanations given to us, no material fraud on or by the company has been noticed or reported during the course of our Audit.

For V. Shah & Associates,

Chartered Accountants,

F. R.N.109S16W

Place: Vadodara

V.R.Shah

Date: 30.05.2015 (Proprietor)

Membership No. FCA 034994


Mar 31, 2014

We have audited the accompanying financial statements of Partcnsheel Organise Limited [the Company), which comprise the Balance sheet as at March 31, 2014. and the stataement meni of Profit and loss and Gash Flow Statement for the yea ended on above date. and a summary of significant accounting policies and other explanatory information

Management's Responsibility for the Financial Statements

Management is responsible tor the preparation of these financial afy statements that give a true and forr view of the financial position imancial penanno are cash flows of the Company in accordance with the Accounting Standards referred to in sub section (3C) of section 211 of the Cpanice Act, 19 56 of India {'the Act) read with the General Circe i& dated September 13, of Ihe Ministry Corporate Affairs in respect of Section 133 of 'he Companies Act 2013 This responsibility the dssigh implementation tensnee df interna! cool rot relevant to the preparation and re sensation of the financial statements tj c g .-j a true and fair view and arc free from maternal ri estate me nl whether due to fraud or lenvi

Auditor's Responsibility

Our responsibility is to express an opinion or tnese financial statements basco on pin .conducted tiLtr audit m accordance wit.n the Sin.maids on Auditny issued by the InStffcrte n t 11 a tiered Accountants cr: India Those Standards comply wim ethical 'eciLnremorli id plan end perform the audit to obtain -p-esomsbla esc. - ante sbbui wl'ethoi the n-ianoa staler i.-nt; ore f:Si from material misslaiement

Ah audit involves performing procedures to obt-am eunit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on tre auditors judgment nicftidrng the assessment of the risks oi material misstate men i of the financial statements whether du-o to jraud or error in making tliose risk assessments, the auditor considers internal coiiin n cu-iranl tc the Company's preparation and ter presematon jSf tne Tianc-iT statement uesiu t procedures are appropriate in the citcnmsEi not tot the pwfpcse ol expressing an a ertecteveness entity s internal control. An nudil a iso nciudes evaluating the appro:-ii a -ne^s i acccunling policies used and ftia reasonableness Uf Tit account ng estimates made by minaco,.o,:t. 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 prov-ce a basis for our audit opinion;

Opinion

In our opinion and to the best of our information and according to explanation given 10 us the financial statement give the information requires by the Act in the manner so requires 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 Marcl 31 2014;

(b) In the case of the Statement of Profit and l oss, of the Profit for the year ended on that company. and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on thru date

Report on Other Legal and Regulatory Requirements

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

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

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

(c) the Balance Sheet Statement of Profit and Loss- and Cash Flow Statement dealt wish by this report are in agreement with the books of account

(d) in our opinion, the Balance Sheet, Statement. < Profit ana „oss and Case flow Statement with by this report comply with the Accounting Standards referred to in sub-section (30 of sec ion 211 of trie Companies Act 1956 read with the General Circular 1572013 dated September 13 2013 of the. Ministry of Corporate Affairs in respect of Section 133 of trie Companies Act, 2013

(e)on the basis of written representations ecerved From the directors as on March 31 2014.and taken on record by the Board of Directors none of -be directors sd disqualified as on 31st 2013 from being appointed as a director ir terms of clause (g) of sub-sectfon (1) section 4 of the Companies Act, 1956

II. As required by the Companies (Auditor's Report) Order. 2C93. as amended by the Companies ;Auditors Report) (Amendment) Order. 2004. issued by the Cenrrai Government of India in terms of subsection (4A) of section 227 of the Act (hereinafter referred to as the "Order"), arid on the basis or such checks of the books and records of the company as we considered appropriate 2nd acceding to the information and explanation given to us we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order

In respect of is Fixed Assets

(a) The company is in process of updating the records for quantitative details ana situation of assets

(b) As explained to us. the Company has a program for physical verification of fixed assets iit periodic intervals In Our opinion, the :*criccl o? vrvifrest-or >s reasonable havnip regard to the size of the Company and the nature ; its assets We are nc-l ir. a pcs tion to cq i.moni, m the discrepancies ir any between physical and book balances and the impact thereon since the records for the same were riot available for ou? vehficatioi

(c) In our opinion and according in the information 3no explanation given to as no suas&nltgl Darts of fixed assets nave been disposed on during the year and therefore, do cot affect the? going concern assumption.

2 InventorY

a) -As explained to os. tho inventory oas been physically verified during the year by the management

(b) The procedures of physical verification of inventory followed by the management are reasonable ana adequate in relation to the size cr me company an# die nat-m <.f ils business

(c) The Company is maintaining props: mcords of inventory The discrepancy noticed or. physical verification Of inventory has been rvooeriy ceall within the books of accounts

3 (a) According to the information and explanations given to us there are no loans;secured or unsecured) granted by the Company to companies, firms or other panics covered In the register maintained under section 301 of The Companies Act. 1953

(b) The Company has not taken any unsecured loans (in the nature of Deposits) covered in tho Register maintained u/s 301 of The Companies Act. 1956

4 In our opinion and according to the information and explanations given to us there are acquate internal control procedures commensurate with the size of the Company anc the nature of its business, for the purchase of in venter, fixed assets and for the sale of goods During of our audit, we have not observed a continuing failure to correct major weaknesses Interna! controls.

5 (a) Based on the audit procedures applied by js and according to the 'nfo nation and explanations provided by the management we roe of the opinion that '.he Pad'ccla-s of contracts and arrangements referred to in Section 301 of ihe Companies Act 1956 have bee * tor int* the register required to oe maintained under that section

(b) The transactions made in pursuance ot such contracts or arrangements, were made hi prices which are reasonable havng regaro to prevailing market prices al the relevan wher" comparabJe market price exist

8 Wn have hroadly reviewed the books f account *rai.-.tuined by the Comp:.:., i products where pursuant to the Rules n yde by h ie Ceiilrs' Government for maintenance of cov records under Clause {d} of Sub- sect-an (1) of Sectiar 209 of the Companies Act. 195-6 jn respect of its products and are of the opinion th-al pome facie the prescribed accounts arc records have been made ana maintained However ws nave not made detailed examination of the recorcs wire, the view to determine wi rthor they ate accurate or complete

9. Statutory and other dues

(a) According to the information sjfjri explanations given to us -and based on the records examined by us, the Company has been generally regular in depositing undisputed statutory dues including Provident fund, investor Education and Protection Fund Employees: state insurance, Income tax, Safes tax Wealth tax Custom duty, Excise Duty Tax, Cess and any other statutory dues ! the appropriate authorities curing the y-jar. (b) According to the information ana explanations given to us. no undisputed tis pa,able- in respect of Sales Tax. Income Tax, Wealth 'fax. Customs Duty. Service Tax Excise Duty and any other Statutory dues as at ,' 03.2014 for a period of more than six months Torndate they become payable

(c) According to the information and explanation given to us details of the due.- of sale ~-3,. Income Tax, Customs Duly We&tfb Tax Excise Duty Service Tax and Cess which lave not been, deposited or, account cf any dispute a-;, given beiuw

10 I he Company dee? no! have any acejipteci losses os at eric of the financial yos: "ho Company has noi incurred cast-, losses t* ring the Financial Year covered by our audit and i the immediately preceding financial year

11 Based on cor Audit procedure auo on me information and explanation giver Hie management Me are- of the opinion the! the Company nas net defaulted m repayment dues to a finance institution or bank

12. The Company has not granted ioans and advances on the Pasts of security by way of pledge or shares, debentures end other securities

13 The company is 3 a chi? fund or a Nidhi mutual Benefit fund / society Therefore. Clause 4(Xiii) of the Companies (Auditor's order 2003 s apt applicable to the company

14 The company is not dealing or trading shares. Mutual Fund and other investments Accordingly, the provisions clause 4(xiv) of me Companies (Auditor's Report) Order 2003 arc net applicable to the company

15 There is no guarantee given by the Company for loans taken by others from bank and financial institutions.

15. The Company has applied amount of term loans toe the. purpose for which the term was obtained;

17 According to the cash flow statement and other records examined oy us and the information and explanations given ID us. on an overall basis funds raised on short-term basis have puma fade, have not been used during the year for rung term investment (fixed assets etc.,)

10 The Company has not made preferential allotment of shares to parties and conipanje-i in the register maintained under section 301 of the Companies Act, "956 during the yoa; under review-

19. The Company hs noit issued any tteberawes during my the year

20. The Company has not raised any money by way of public issues during Hie year

21 Tq the best of our knowledge and tsottel and according to Vac fexpian&bons given to us no frgud on or by the company was noticed or rer-erted during the year

For V Shah S Associates Chartered Accountants F.R.N. 109816W



Place: Indore V.RShari Date : 30.05.2014 Proprietor Membership No.034994


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Panchsheel Organics Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other 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 Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2013;

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

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

Report on Other Legal and Regulatory Requirements

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

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

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books

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

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

e) on the basis of written representations received from the directors as on March 31,2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2013, 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 the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

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

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.

(b) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the Company and the nature of its assets.

(c) In our opinion and according to the information and explanation given to as, no substantial parts of fixed assets have been disposed off during the year and therefore, do not affect the going concern assumption. Rs.

2. Inventory

(a) As explained to us, the inventory has been physically verified during the year by the management;

(b) The 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 is maintaining proper records of inventory. The discrepancy noticed on physical verification of inventory has been properly dealt within the books of accounts.

3. (a) According to the information and explanations given to us, there are no loans (secured or unsecured) granted by the Company to companies, firms or other parties covered in the register maintained under section 301 of The Companies Act,1956.

(b) The Company has not taken any unsecured loans (in the nature of Deposits) covered in the Register maintained u/s 301 of The Companies Act, 1956.

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, for the purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed a continuing failure to correct major weaknesses in internal controls.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the particulars of contracts and arrangements referred to in Section 301 of the Companies Act, 1956, have been entered into the register required tc be maintained under that section.

(b) The transactions made in pursuance of such contracts or arrangements, were made at prices which are reasonable having regard to prevailing market prices at the relevant time, where comparable market price exist.

6. In our opinion and according to the information and explanations given to us, The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Companies Act,1956 and the Companies (Acceptance of Deposits) Rules,1975.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under clause (d) of Sub- section (1) of Section 209 of the Companies Act, 1956 in respect of its products and are of the opinion that prime facie, the prescribed accounts and records have been made and maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

9. Statutory and other dues:

(a) According to the information and explanations given to us and based on the records examined by us, the Company has been generally regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employees'' State insurance, Income tax, Sales Tax, Wealth Tax, Custom duty, Excise Duty, Service Tax, Cess & any other statutory dues with the appropriate authorities during the year.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Sales Tax, Income Tax, Wealth Tax, Customs Duty, Service Tax, Excise Duty and any other Statutory dues as at 31.03.2013 for a period of more than six months from the date they become payable.

(c) According to the information and explanation given to us, details of the dues of Sale Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Service Tax and Cess, which have not been deposited on account of any dispute are given below:

Name of Nature of Period to Forum where the Dispute is Total the Statute Dues which the pending Demand Amount Amount (Rs) Relates

Central Sales Sales Tax, F.Y. 2003 -04 The Dy. Commis sioner of Sales 6,05,877.00 Tax & VAT Interest & Tax (Appeal 3), Mumbai Penalty_

Central Sales Sales Tax, F.Y. 2004-05 The Dy. Commis sioner of Sales 13,75,000.00 Tax & VAT Interest & Tax (Appeal 3), Mumbai Penalty

Central Sales Sales Tax, F.Y. 2005-06 The Hon''ble Registrar, MP 452,310.00 Tax Interest & Commercial Tax Appellate Penalty Board, Bhopal (MP)__

Central Sales Sales Tax, F.Y. 2006-07 The Hon''ble Registrar, MP 3,41,438.00 Tax Interest & Commercial Tax Appellate Penalty Board, Bhopal (MP)__

Central Sales Sales Tax, F.Y. 2007-08 The Hon''ble Registrar, MP 591,208.00

Tax, VAT & Entry] Tax Commercial Tax Appellate Entry Tax and Interest Board, Bhopal (MP) & Penalt

Central Sales Sales Tax, F.Y. 2008 - 09 The Hon''ble Registrar, MP 688,435.00 Tax & VAT Interest & Commercial Tax Appellate Penalty Board, Bhopal (MP)_

Central Sales Sales Tax, F.Y. 2008-09 The Dy. Commis sioner of Sales 2,76,114.00

Tax & VAT Interest & Tax (Appeal), CT Ernakulam Penalty

Central Sales Sales Tax, F.Y. 2009-10 The Dy. Commis sioner of 1,154,794.00

Tax & VAT Interest & Commercial Tax (Appeals), Penalty Indore__

Income Tax 80HH C/80I F.Y. 1998-99 The Income Tax Appellate 447,684.00 Act, 1961 A/MAT Tribunal, Indore__

Income Tax 80HH C/80I F.Y. 1999-00 The Income Tax Appellate 503,802.00 Act, 1961 A/MAT Tribunal, Indore

Central Excise Duty F.Y. 1999-00 The Asst Regi strar, Customs, 471,369.00

Excise Act, Excise & Service Tax Appellate 1944 Tribunal, New Delhi__

10. The Company does not have any accumulated losses as at the end of the financial year. The Company has not incurred cash losses during the Financial Year covered by our audit and in the immediately preceding financial year.

11. Based on our Audit procedure and on the information and explanation given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution or bank;

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

13. The company is not a chit fund or a Nidhi / Mutual Benefit Fund / Society. Therefore, Clause 4(Xiii) of the Companies (Auditor''s Report) order 2003 is not applicable to the Company.

14. The Company is not dealing or trading in shares, Mutual Fund 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. There is no guarantee given by the Company for loans taken by others from bank and financial institutions;

16. The Company has applied amount of term loans for the purpose for which the term loan was obtained;

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

18. The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956 during the year under review.

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

20. The Company has not raised any money by way of public issues during the year.

21. To the best of our knowledge and belief and according to the explanations given to us, no fraud on or by the company was noticed or reported during the year;

For V. Shah & Associates

Chartered Accountants

F. R. N. 109816 W

Place: Indore

Date : 30.05.2013

V.R.Shah

Proprietor

Membership No. 034994


Mar 31, 2010

We have audited the attached Balance Sheet of Panchsheel Organics Limited, as at 31st March, 2010 and also the Profit and Loss Account 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 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 test check 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 enclosed 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 above, we report that:

(i) We have obtained all the information and explanations, which, to the best our knowledge and belief, were necessary for the purposes 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 and Profit and Loss Account dealt with by this report are in agreement with the books of accounts;

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

(v) On the basis of written representations received from the directors, as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31,2010 from being appointed as a director in terms of Clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; (vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as 31st March 2010; and

(b) in the case of Profit & Loss Account, of the Profit for the period ended on that date.

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

Annexure to the Auditors report for the year period March 31, 2010

1) In our opinion and according to the information and explanations given to us the Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

2) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. In accordance with such programme, the management has physically verified fixed assets during the year and no material discrepancies were noticed on such verification.

3) The assets disposed off during the year do not constitute a substantial part of the total fixed assets of the company. Hence, there is no affect on the going concern status of the company.

4) The inventory has been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable. In case of material lying with third parties, the company has obtained certificates confirming such inventory.

5) In our opinion and according to the information and explanations given to us, the Procedures for physical verification of inventory followed by the management were reasonable and adequate in relation to the si2e of the Company and the nature of its business.

6) In our opinion and according to information and explanation given to us, the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stock were not material and have been properly dealt with in the books of accounts.

7) As informed to us, during the year, the Company has not granted any loans to parties listed in the register maintained under Section 301 of the Companies Act, 1956.

8) As informed to us, the Company had not taken any unsecured loan from the directors / share holders and their relatives.

9) In our opinion, the rate of interest and other terms on which the said loan have been taken or not, prima facie, prejudicial to the interest of the Company.

10) 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 for purchase of inventory, fixed assets and sale of goods. We have not noted any continuing failure to correct major weakness in the internal controls during the course of the audit.

11) In our opinion and according to the information and explanations given to us, the company has entered all the transactions that need to be entered in the register in pursuance of Section 301 of the Companies Act.

12) In our opinion and according to the information and explanations given to us, The Company has not accepted any deposits from the public within the meaning, of sections 58A, 58AA or any other relevant provisions of the companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

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

14) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of any of the product of the Company.

15) According to the information and explanations given to us, and on the basis of our examination of the books of account, we report that the Company has been regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income tax, sales tax, custom duty, wealth tax and other material statutory dues applicable to it.

16) According to the information and explanations given to us, there are no dues in respect of income tax, sales tax, wealth tax, custom duty and cess were in arrears as at March 31,2010 for a period of more than six months from the date they became payable.

17) According to the information and explanations given to us, there are no undisputed income tax, excise duty, sales tax and custom duty that have not been paid to the concern authorities.

18) The Company does not have any accumulated losses at the end of the financial year nor has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

19) In our opinion and according to the information and explanations given to us and on overall examination of the balance sheet, we report that company has not defaulted in repayment of dues to any loans from financial institution or bank.

20) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

21) In our opinion, the company is not a chit fund, nidhi, mutual benefit or society.

22) According to the information and explanations given to us, the company is not dealing or trading in shares, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the company.

23) 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.

24) In our opinion and according to the information and explanation given to us and on overall examination of the balance sheet of the company, we report that the company has obtained any term loans during the year.

25) In our opinion and according to the information and explanations given to us and on overall examination of the balance sheet of the company, we report that the short-term funds raised have not been used for long-term investment and vice versa.

26) In our opinion and according to the information and explanations given to us and on overall examination of the balance sheet of the company, we report that company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

27) In our opinion and according to the information and explanations given to us and on overall examination of the balance sheet of the company, we report that company has not issued any debentures.

28) In our opinion and according to the information and explanation given to us and on overall examination of the balance sheet, we report that the company has not raised any money by public issues during the year.

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

For P B Mehta & Associates

Chartered Accountants



Parag B Mehta

Proprietor

Membership: 39878



Place: Indore

Date: 31 August 2010

 
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