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Auditor Report of Pentokey Organy (India) Ltd.

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

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

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

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

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

e) on the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act; 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 as at March 31, 2015 on its financial position in its financial statements - Refer Note 27 and Note 28;

ii. there are no material foreseeable losses arising out of any long-term contracts for which provision is required to be made under any law or accounting standards. The Company has not entered into any long term derivative contracts.; and

iii. the Company do not have any outstanding amount to be transferred to the Investor Protection and Education Fund.

Annexure to Independent Auditors' Report

(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 generally 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 designed 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 the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

ii. In respect of its inventories:

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

(b) In our opinion and according to the information and explanation 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 nature of its business.

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

iii. The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a) and (iii)(b) of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and Fixed assets and the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in aforesaid internal control systems.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public. Therefore, the provisions of the clause 3 (v) of the Order are not applicable to the Company.

vi. We have broadly reviewed the books of accounts and records maintained by the Company pursuant to the Companies (Cost Records and audit) Rules, 2014 prescribed by the Central Government under sub section (1) of section 148 of the Act and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The content of these accounts and records have not been examined by us.

vii. In respect of statutory dues :

(a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Value added tax, Cess, Professional tax and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Value added tax, Cess, Professional tax and other material statutory dues were in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Provident Fund, Employees' State Insurance ,Income tax, Wealth tax, Value added tax, Customs duty, Excise duty, Professional tax and Cess which have not been deposited with the appropriate authorities on account of any dispute. The particulars of dues of sales tax, service tax, as at March 31, 2015 which have not been deposited on account of dispute are as under:

Sr. Name of the Nature of Dues Amount No. Statute (Rs.in Lacs)

1 Bombay Rectified Transport Fees 103.24 Spirit (Transport in Bond) Rules, 1957

2 Bombay Sales Sales Tax dues 7.81 Tax Act,1959

3 Bombay Sales Tax Sales Tax and 193.96 Act,1959 and Central Sales Central Sales Tax Tax Act, 1956

4 Bombay Sales Tax Sales Tax and 85.48 Act,1959 and Central Sales Central Sales Tax Tax dues Act, 1956

5 Central Excise Penalty 13.90 Act,1944

Sr. Name of the Financial Year Forum where No. Statute to which it Pertains Dispute is pending

1 Bombay Rectified 2002-2007 High Court Spirit (Transport in Bond) Rules, 1957

2 Bombay Sales 1994-1995 Joint Commissioner Tax Act,1959 of Sales Tax Appeal)

3 Bombay Sales Tax 2003-2004 Maharashtra Sales Act,1959 and Tax Tribunal Central Sales Tax Act, 1956

4 Bombay Sales Tax 2004-2005 Joint Commissioner Act,1959 and of Sales Tax (Appeal) Central Sales Tax Tax Act, 1956

5 Central Excise 2008-09 to 2014-15 Commissioner of Act,1944 Central Excise - Pune

(c) The Company does not have any outstanding amount to be transferred to the Investor Protection and Education Fund.

viii. The Company does have accumulated losses as at the end of the financial year. The Company has incurred cash losses during the financial year covered by the audit and in the immediately preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a bank during the year. The Company does not have any borrowings from any financial institution and it has not issued any debentures.

x In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions. Accordingly, the provisions of Clause 3(x) of the Order are not applicable to the Company.

xi. The Company has not raised new term loans during the year. The term loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

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

For Desai Saksena & Associates Chartered Accountants (Firm's Registration No: 102358W)

Place: Mumbai S.N.Desai Date: 19th May, 2015 Partner Membership No: 32546


Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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 sub-section (3C) of section 211 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) 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 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, but not for the purpose of expressing an opinion of the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

(b) In the case of the Statement of Profit and Loss, of the 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.

Report on Other Legal and Regulatory Requirements

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

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

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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, the 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, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) of the Act;

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

Annexure to Independent Auditors'' Report

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

ii. In respect of its inventories:

a) As explained to us, inventories of raw materials, finished goods were physically verified during the year by the Management.

b) In our opinion and according to the information and explanation 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 nature of its business.

c) The company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under section 301 of the Companies Act 1956, paragraphs (iii) (b), (c) and (d) of the Order are not applicable.

b) According to the information and explanation given to us, the Company has not taken any loans, secured or unsecured, from Companies, firms or other parties listed in the Register maintained under section 301 of Companies Act, 1956. As the Company has not taken any loans, secured or unsecured from parties listed in the Register mentioned under section 301 of Companies Act, 1956, paragraphs (iii) (f) and (g) of the order are not applicable.

iv. In our opinion, and according to the information and explanation given to us, having regard to the explanation, except that some of the items purchased are of a special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control systems.

v. 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, since, there was no contract or arrangement during the year with the parties covered under Register maintained under section 301 of the Companies Act, 1956, therefore, the provisions of clause 4(v) (a) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(b) In our opinion and according to the information and explanations given to us, as there are no contracts or agreements that need to be entered into register maintained under section 301 Companies Act 1956, therefore the provisions of clause 4(v) (b) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause 4(vi) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

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

viii. 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 and are being made up. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

ix. In respect of statutory dues :

(a) According to the information, explanations and records of the Company in respect of statutory and other dues, the Company, has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Sales Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues, applicable to it, with the appropriate authorities. According to information and explanation given to us, no undisputed amounts payable in respect of the aforesaid dues were in arrears as at 31st March 2014 for a period more than six months from the date of becoming payable, other than Minimum Alternative Tax (MAT).

Board for Industrial and Financial Reconstruction (BIFR) vide its order dated 26th September 2007 and vide its deregistration Order dated 16th October 2009 has granted relief to the Company from payment of MAT payable under section 115JB of the Income Tax Act, 1961. Accordingly, the Company has not provided for the said liability.

(b) According to the explanation given to us, the disputed statutory dues aggregating Rs. 394.74 lacs, that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Sr. No. Name of the Nature of Dues Financial Year Statute to which it Pertains 1 Bombay Rectified Transport Fees 2002-2007 Spirit (Transport in Bond) Rules, 1957

2 Bombay Sales Sales Tax 1994-1995 Tax Act,1959

3 Bombay Sales Tax Sales Tax and 2003-2004 Act,1959 and Central Sales Central Sales Tax Tax Act, 1956

4 Bombay Sales Tax Sales Tax and 2004-2005 Act,1959 and Central Sales Central Sales Tax Tax dues Act, 1956

5 Central Excise Penalty 2008-09 to 2010-11 Act,1944

Name of the Statute Forum where Amount Dispute is pending (Rs. in Lacs)

Bombay Rectified Spirit (Transport in Bond) Rules, 1957 High Court 103.24

Bombay Sales Tax Act,1959 Joint Commissioner 7.81 of Sales Tax (Appeal)

Bombay Sales Tax Act,1959 Maharashtra Sales 193.96 and Central Sales Tax Act, 1956 Tax Tribunal

Bombay Sales Tax Act,1959 and Central Sales Tax Act, 1956 Joint Commissioner 85.48 of Sales Tax (Appeal)

Central Excise Act,1944 Commissioner of 4.25 Central Excise - Pune

Total 394.74

x. The Company does not have accumulated losses as at the end of the financial year. The Company has incurred cash losses during the financial year covered by the audit. The Company has not incurred cash losses during the immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions or banks.

xii. In our opinion 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.

xiii. In our opinion, the Company is not a chit fund /nidhi/mutual benefit fund/society. Therefore the provisions of clause 4(xiii) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xiv. According to information and explanations given to us, we are of the opinion that the Company is not trading in shares, debentures and other investments. Therefore, the provisions of clause 4(xiv) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been generally applied for the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, prima facie, we are of the opinion that no funds raised on short-term basis have been used for long-term investments.

xviii. According to the information and explanations given to us, the Company has not made preferential allotment of shares during the accounting year.

xix. According to the information and explanations given to us, the Company has not issued any debentures; hence the question of creation of securities or charge does not arise.

xx. The Company has not raised any monies by way of public issue during the year.

xxi. 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 Desai Saksena & Associates

Chartered Accountants

(Firm''s Registration No: 102358W)

Place: Mumbai Alok K. Saksena

Date: 29th May, 2014 Partner

Membership No: 35170


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Pentokey Organy (India) Limited ("the Company") which comprise the Balance Sheet as at 31 st March, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year 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 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 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) In the case of the Statement of Profit 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

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

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

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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, the 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, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

e) On the basis of written representations received from the Directors as on 31st March, 2013, and taken on record by the Board of Directors, none of the Directors are disqualified as on 31st March, 2013, from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

Annexure to Auditors'' Report

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 generally 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, during the year, the Company has not disposed off a substantial part of the fixed assets and in our opinion on going concern status of the Company is not affected.

ii. In respect of its inventories:

a) As explained to us, inventories of raw materials, finished goods were physically verified during the year by the Management.

(b) In our opinion and according to the information and explanation 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 nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under Section 301 of the Companies Act, 1956 paragraphs (iii) (b), (c) and (d) of the Order are not applicable.

(b) According to the information and explanations given to us, the Company has taken interest bearing loan from a party listed in the Register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding at any time during the year and the year end balance and the maximum amount outstanding at any time during the year in respect of the said loan is Rs. 900 lacs respectively.

(c) In our opinion and according to the information and explanations given to us, other terms and conditions of such loans taken by the Company are prima facie not prejudicial to the interest of the Company.

(d) There is no repayment schedule in respect of the said loan.

iv. In our opinion, and according to the information and explanation given to us, having regard to the explanation, except that some of the items purchased are of a special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control systems.

v 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, since, there were no transactions of sale and purchase during the year with the parties covered under Register maintained under Section 301 of the Companies Act, 1956 therefore, the provisions of clause 4(v) (a) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

(b) In our opinion and according to the information and explanations given to us, as there are no contracts or agreements that need to be entered into register maintained under Section 301 Companies Act 1956, therefore the provisions of clause 4(v) (b) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause 4(vi) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

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

viii. 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 and are being made up. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

ix. In respect of statutory dues :

(a) According to the information, explanations and records of the Company in respect of statutory and other dues, the Company, has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Sales Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues, applicable to it, with the appropriate authorities during the year other than Minimum Alternative Tax (MAT)

(b) BIFR vide its Order dated 26th September, 2007 and vide its deregistration Order dated 16th October, 2009 has granted relief to the Company from payment of MAT payable under Section 115JB of the Income Tax Act, 1961. Accordingly the Company has not provided for the said liability.

(c) According to the explanation given to us, the disputed statutory dues aggregating Rs. 390.49 lacs, that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Sr. No. Name of the Nature of Dues Financial Year Statute to which it Pertains

1 Bombay Rectified Transport Fees 2002-2007 Spirit (Transport in Bond) Rules, 1957

2 Bombay Sales Sales Tax 1994-1995 Tax Act, 1959

3 Bombay Sales Tax Sales Tax 2003-2004 Act,1959and and Central Sales Central Sales Tax Tax Act, 1956

4 Bombay Sales Tax Sales Tax 2004-2005 Act, 1959 and and Central Sales Central Sales Tax Tax Act, 1956

Name Forum where Amount Dispute is pending (Rs.in Lacs)

Bombay Rectified High Court 103.24

Bombay Rectified Joint Commissioner 7.81 of Sales Tax (Appeal)

Bombay Rectified Maharashtra Sales 193.96 Tax Tribunal

Bombay Rectified Joint Commissioner 85.48 of Sales Tax (Appeal)

Total 390.49

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

xi. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions or banks.

xii. In our opinion 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.

xiii. In our opinion, the Company is not a chit fund/nidhi/mutual benefit fund/society. Therefore the provisions of clause 4(xiii) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xiv. According to information and explanations given to us, we are of the opinion that the Company is not trading in shares, debentures and other investments. Therefore, the provisions of clause 4(xiv) of Companies (Auditor''s Report) Order 2003 are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been generally applied for the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, prima facie, we are of the opinion that no funds raised on short-term basis have been used for long-term investments.

xviii. According to the information and explanations given to us, the Company has not made preferential allotment of shares during the accounting year.

xix. According to the information and explanations given to us, the Company has not issued any debentures; hence the question of creation of securities or charge does not arise.

xx The Company has not raised any monies by way of public issue during the year.

xxi. 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 Desai Saksena & Associates

Chartered Accountants

(Firm''s Registration No: 102358W)

Place: Mumbai Alok K. Saksena

Date: 23rd May, 2013 Partner

Membership No: 35170


Mar 31, 2012

1. We have audited the attached Balance Sheet of PENTOKEY ORGANY (INDIA) LIMITED, as at 31st March, 2012, the Statement of Profit and Loss of the Company and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These Financial Statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. 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 Companies Act, 1956 we enclose in the Annexure hereto a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Further to our comments in the Annexure, referred to in paragraph 3, 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 and 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 and the Statement of Profit and Loss and Cash Flow Statement dealt with by this report, comply with the Accounting Standards referred to in sub-Section (3C) of Section 211 of the Companies Act. 1956;

e) On the basis of written representations received from the directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2012 from being appointed as director in terms of Clause (g) of sub-Section (1) of Section 274 of the Companies Act, 1956;

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

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

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

Annexure to the Auditors' Report

(Referred to in paragraph 3 of the Auditors' 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 its fixed assets.

(b) As per the explanation given to us, the Company has designed a phased programme for the physical verification of its fixed assets and accordingly, a portion of the fixed assets are verified every year to cover all the items in reasonable time frame. Pursuant to the said programme, during the year, a portion of fixed assets of the Company have been physically verified by the management. As explained to us, 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 the nature of its assets.

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

ii. In respect of its inventories:

(a) As explained to us, inventories, raw materials and finished goods were 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 explanation given to us, the procedures for the physical verification of inventories followed by the management are reasonable and adequate, in relation to the size of the Company and nature of its business.

(c) The Company has maintained proper records of its inventories. As explained to us, there was no material discrepancies noticed on the physical verification of inventory as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under Section 301 of the Companies Act, 1956, provisions of clauses (iii) (b), (iii)(c) and (iii)(d) of Paragraph 4 of the Order are not applicable.

(b) According to the information and explanations given to us, the Company has taken interest bearing loan from a party listed in the Register maintained under Section 301 of the Companies Act, 1956. In respect of the said loans, the maximum amount outstanding at any time during the year and the year end balance was Rs. 100 Lacs.

(c) In our opinion and according to the information and explanations given to us, other terms and conditions of such loans taken by the Company are prima facie, not prejudicial to the interest of the Company.

(d) No principal amount was due for repayment during the year.

iv. In our opinion, and according to the information and explanation given to us, having regard to the explanation, except that some of the items purchased are of a special nature and suitable alternative sources do not exist for obtaining comparable quotations; there are adequate internal control systems which commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control systems.

v 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, there were no transactions of sale & purchase during the year with the parties covered under register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanations given to us, as there are no contracts or agreements that need to be entered into register maintained under Section 301 Companies Act 1956, provisions of Clause (v)(b) of Paragraph 4 of the Order are not applicable.

vi. In According to the information and explanations given to us, in our opinion the Company has complied with the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed there under. To the best of our knowledge and according to the information and explanations given to us, the Company has not received any order under above-mentioned Sections from the Company Law Board, National Company Law Tribunal, Reserve Bank of India or any Court or any other Tribunal.

vii. The Company has an adequate internal audit system commensurate with the size and nature of the business.

viii. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules of the Central Government for maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956. We are of the opinion that, prima facie, the prescribed accounts and records have been maintained and are being made up. We have not however, made a detailed examination of the said records.

ix. In respect of statutory and other dues,

(a) According to the information, explanations and records of the Company in respect of statutory and other dues, the Company, subject to concessions given by Board for Industrial and Financial Reconstruction (BIFR), has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Sales Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues, applicable to it, with the appropriate authorities during the year. BIFR vide its order dated 26th September, 2007 and vide its deregistration Order dated 16th October, 2009 has granted relief to the Company from payment of Minimum Alternative Tax (MAT) payable under Section 115JB of the Income Tax Act, 196.Accordingly the Company has not provided for the said liability.

BIFR vide its Order dated 26th September, 2007 and deregistration Order dated 16th October, 2009 has granted various reliefs and concessions, including rescheduling of the payment of the statutory dues. As per the explanation given by the Company, the dues are paid in accordance with the said order of BIFR.

(b) According to the information and explanation given to us, details of dues which have not been deposited on account of a dispute are given below:

Particulars Financial Year to Forum Where Amount which it Pertains Dispute is pending (Rs. in Lacs)

Transport Fees 2002-2007 High Court 103.24 lacs

Sales Tax 2003-04 Maharashtra Sales Tax Tribunal 193.96 lacs

x The Company does not have accumulated losses as at 31st March, 2012. The Company has not incurred any cash losses during the financial year covered by the audit. The Company has not incurred cash losses immediately preceding financial year.

xi. Based on our audit procedure and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions or banks.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the Company has not granted any loans and advances, on the basis security by way of pledge of shares, debentures and any other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore the provision of Clause 4(xiii) of Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

xiv. According to information and explanations given to us, we are of the opinion that the Company is not trading in shares, debentures and other investments. Therefore the provision of Clause 4(xiv) of Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has not given guarantees for loans taken by others, from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been generally applied for the purposes for which they were obtained.

xvii. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no short-term funds have prima facie, been used during the year for long-term investments.

xviii. According to the information and explanations given to us, the Company has not made preferential allotment of shares during the accounting year.

xix. According to the information and explanations given to us, the Company has not issued any debentures; hence question of creation of security or charge do not arises.

xx The Company has not raised any money by way of public issue during the year.

xxi. 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 Desai Saksena & Associates

Chartered Accountants

(FRN102358W)

Dr. S.N. Desai

Place: Mumbai Partner

Date :28th May, 2012 M.No.32546


Mar 31, 2011

1. We have audited the attached Balance Sheet of PENTOKEY ORGANY (INDIA) LIMITED, as at 31st March, 2011, the Profit and Loss Account of the Company and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These Financial Statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 ("the Order") (as amended) issued by the Central Government of India in terms of subsection (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure hereto a statement on the matters specified in paragraph 4 and 5 of the said Order.

4. Further to our comments in the Annexure, referred to in paragraph 3, 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 and Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

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

e) On the basis of written representations received from the directors, as on 31st March, 2011 and taken on record- by the Board of Directors, we report that, none of the directors is disqualified as on 31st March, 2011 from being appointed as director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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

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

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

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

Annexure to the Auditors' Report (Referred to in paragraph 3 of the Auditors' 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 its fixed assets.

(b) As per the explanation given to us, the Company has designed a phased programme for the physical verification of its fixed assets and accordingly, a portion of the fixed assets are verified every year to cover all the items in reasonable time frame. Pursuant to the said programme, during the year, a portion of fixed assets of the Company have been physically verified by the management. As explained to us, 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 the nature of its assets.

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

ii. In respect of its inventories:

(a) As explained to us, inventories, raw materials and finished goods were 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 explanation given to us, the procedures for the physical verification of inventories followed by the management are reasonable and adequate, in relation to the size of the Company and nature of its business.

(c) The Company has maintained proper records of its inventories. As explained to us, there was no material discrepancies noticed on the physical verification of inventory as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under Section 301 of the Companies Act, 1956, provisions of clauses (iii)(b), (iii)(c) and (iii)(d) of Paragraph 4 of the Order are not applicable.

(b) According to the information and explanation given to us, the Company has not taken any loans, secured or unsecured, from Companies, firms or other parties listed in the Register maintained under Section 301 of Companies Act, 1956. Since the Company has not taken any loans, secured or unsecured from parties listed in the Register mentioned under Section 301 of Companies Act, 1956. provisions of clauses (iii)(f) and (iii)(g) of Paragraph 4 of the Order are not applicable.

iv. In our opinion, and according to the information and explanation given to us, having regard to the explanation, except that some of the items purchased are of a special nature and suitable alternative sources do not exist for obtaining comparable quotations; there are adequate internal control systems which commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and sale of goods. During the course of our audit, We have not observed any major weaknesses in such internal control systems.

v. 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, there were no transactions of sale & purchase during the year with the parties covered under register maintained under Section 301 of the Companies Act, 1956.

(b) In our opinion and according to the information and explanations given to us, as there are no contracts or agreements that need to be entered into register maintained under Section 301 Companies Act 1956, provisions of clause (v)(b) of Paragraph 4 of the Order are not applicable.

vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore, the provisions of clause, (vi) of Paragraph 4 of the Order are not applicable.

vii. The Company has an adequate internal audit system commensurate with the size and nature of the business.

viii. We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules of the Central Government for maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956 relating to the manufacture of Acetic Acid. We are of the opinion that, prima facie, the prescribed accounts and records have been maintained. We have not however, made a detailed examination of the said records.

ix. In respect of statutory and other dues,

(a) According to the information, explanations and records of the Company in respect of statutory and other dues, the Company, subject to concessions given by Board for Industrial and Financial Reconstruction (BIFR), has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Sales Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues, applicable to it, with the appropriate authorities during the year.

BIFR vide its Order dated 26th September, 2007 and vide its deregistration Order dated 16th October 2009 has granted relief to the Company from payment of Minimum Alternative Tax (MAT) payable under section 115JB of the Income Tax Act, 1961. Accordingly the Company has not provided for the said liability.

BIFR vide its Order dated 26th September, 2007 and deregistration Order dated 16th October, 2009 has granted various reliefs and concessions, including rescheduling of the payment of the statutory dues. As per the explanation given by the Company, the dues are paid in accordance with the said order of BIFR.

(b) According to the information and explanation given to us. details of dues which have not been deposited on account of a dispute are given below:

Particulars Financial Year to Forum Where Amount which it Pertains Dispute is (Rs. in pending Lacs)

Transport Fees 2002-2007 High Court 103.24 lacs

x. The Company does not have accumulated losses as at 31st March, 2011. The Company has not incurred any cash losses during the financial year covered by the audit The Company has not incurred cash losses immediately preceding financial year.

xi. Based on our audit procedures and according to the information and explanations given to us, the Company has not taken any loan from financial institutions or banks therefore default in repayment of the same, does not arise.

xii. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the Company has not granted any loans and advances on the basis security by way of pledge of shares, debentures and any other securities.

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

xiv. According to information and explanations given to us, we are of the opinion that the Company is not trading in shares, debentures and other investments, therefore the provisions of clause (xiv) of Paragraph 4 of the Order are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the Company has not given guarantees for loans taken by others, from banks or financial institutions.

xvi. In our opinion and according to the information and explanations given to us, the Company has not raised term loan. Therefore the provision of clause 4(xvi) of Companies (Auditor's Report) Order 2003, are not applicable to the Company.

xvii. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no short-term funds have prima facie, been used during the year for long-term investments.

xviii. The Company has not made any allotment of shares during the year. Accordingly the question of preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956, or otherwise, does not arise.

xix. According to the information and explanations given to us, the Company has not issued any debentures; hence question of creation of security or charge do not arises.

xx. The Company has not raised any money by way of public issue during the year.

xxi. 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 Desai Saksena & Associates Chartered Accountants (FRN102358W)

Dr. S.N. Desai Partner M.No.32546

Place : Mumbai Date : 26th May, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of PENTOKEY ORGANY (INDIA) LIMITED, as at 31st March, 2010, the Profit and Loss Account of the Company and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These Financial Statements are the responsibility of the Companys Management. Our responsibility-is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the-audit to obtain reasonable assurance about whether the financial statements are free

of material misstatement. An audit includes examining, on a test basis, evidence supporting the" amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 ("the Order") (as amended) issued by the Central Government of India in terms or subsection (4A). of section 227 of the Companies Act, 1956, we enclose in the Annexu/e hereto a statement on the matters specified in paragraph 4 and 5 of the said Order to the extend . applicable.

4. Further to our comments in the Annexure, referred to in paragraph 3, we report that: .

a) We have obtained all the information and explanations, whicn 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 and Profit and Loss Account and Gash Flow Statement dealt with by this report are in agreement with the books of account;

d) . In our opinion, the Balance Sheet and the Profit and Loss Account and Cash Flow Statement dealt with by this report comply with 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 31st March, 2010 and taken on record by the Board of Directors, we report that, none of the directors is disqualified as on 31st March 2010 from being appointed as directors in terms of Clause (g) of sub- section (1) of section 274 of the Companies Act, 1956;

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

i) , in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

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

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

Annexure to the Auditors Report

Referred to in paragraph 3 of the Auditors 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 its fixed assets.

(b) As per the explanation given to us, the Company has designed a phased programme for the physical verification of its fixed assets and accordingly a portion of the fixed assets are verified every year to cover all the items in reasonable time frame. Pursuant to said programme, during the year also a portion of fixed assets of the Company has been physicaliy verified by the management. As explained to us, no material discrepancies were noticed on such veriiication. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its assets.

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

ii. In respect of its inventories:

(a) As explained to us, inventories, raw materials, semi-finished goods and finished goods were 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 explanation 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 nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us there were no material discrepancies noticed on the physical verification of inventory as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956:

(a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. As the Company has not granted any loans, secured or unsecured to the parties listed in the Register maintained under section 301 of the Companies Act, 1956, paragraphs (iii) (b), (c) and (d) of the Order are not applicable,

(b) According to the information and explanation given to us, the Company has not taken any loans, secured or unsecured, from Companies, firms or other parties listed in the Register maintained under section 301 of Companies Act, 1956. As the Company has not taken any loans, secured or unsecured from parties listed in the Register mentioned under section 301 of Companies Act, 1956, paragraphs (jii) (f) and (g) of the order are not applicable. *

iv. In our opinion, and according to the information and explaination given to us, having regard to the explanation, except that some of the items purchased are of a special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and sale of goods. During the course of our audit, we have not observed any major weaknesses in such internal control systems. v. 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, there were no transactions of sale & purchase during the year with the parties covered under register maintained under section 301 of the Companies Act, 1956. b) In our opinion and according to the information and explanations given to us, there are no contracts or agreements that need to be entered into register maintained under section 301 Companies Act 1956, paragraph (v) (b) of the order is not applicable. vi. In our opinion and according to the information and explanations given to us, the Company has not accepted any

deposits from the public. Therefore, the provisions of clause (vi) of paragraph 4 of the Order are not applicable. vii. The Company has an internal audit system commensurate with the size and nature of the business. viii. 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 section 209 (1) (d) of the Companies Act, 1956 relating to the manufacture of Acetic Acid. We are of the opinion that, prima facie the prescribed accounts and records have been maintained. We have not, however, made a detailed examination of the said records. ix. (a) According to the information, explanations and records of the Company, in respect of statutory and other dues, the Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess, Service Tax and any other statutory dues, applicable to it, with the appropriate authorities during the year. The Board for Industrial and Financial Reconstruction (BIFR) vide its Order dated 26th September, 2007 has granted various relief and concessions including rescheduling of the payment of the statutory dues. As per the explanation given by the ¦ Company, the dues are paid in accordance with the said order of BIFR. (b) According to the information and explanation given to us, that the following statutory dues have not been deposited on account of dispute.



Particulars Financial Year to Forum Where Amount

which it Pertains Dispute is pending (Rs. in Lacs)

Transport Fees 2002-2007 High Court 103,24



x. The Company does have accumufated losses at 31st March, 2010. The Company has not incurred cash losses during

the financial year covered by the audit. The Company has not incurred cash losses in immediately preceding

financial year.

xi. Based on our audit procedure and according to the information and explanations given to us, the Company has not taken loan from financial institutions or banks. Hence question of default in the repayment of dues to financial institutions or banks does not arises.

xii. To the best of our knowledge .and belief and according to the information and explanations given to us, in our opinion, the Company has not granted any loans and advances on the basis security by way of pledge bf shares, debentures and any other securities.

xiii. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore the provisions ofclause.

(xiii) of Companies (Auditors Report) Order 2003, are not applicable to the Company. xiv. According to information and explanations given to us, we are of the opinion that the Company is not trading in shares, debentures and other investments. Therefore the provision of clause.

(xiv) of Companies (Auditors Report) Order 2003, are not applicable to the Company. xv. In our opinion and ccording to the information and explanations given to us, the Company has not given guarantees, for loans taken by others from banks or financial institutions.

xvi.In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purposes for which they were obtained.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on short-term basis have prima facie, have been used during the year for long-term investments.

xviii.The Company has not made allotment of shares during the year. Accordingly question of preferential allotment of shares to parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956 or otherwise do not arises.

xix. According to the information and explanations given to us, the Companyhas not issued any debentures; hence question of creation of securities do not arise.

xx. The Company has not raised any money by way of public issue during the year.

xxi. In our opinion and according to the information and explanations give,n to us, no material fraud on or by theCompany has been noticed or reported during the year.



For Desai Saksena &Associates

Chartered Accountants

Firm Reg. No. 102358W

Dr. S.N. Desai

Place: Mumbai Partner

Date: 13th May, 2010 M.No.32546

 
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