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Auditor Report of Polygenta Technologies Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Polygenta Technologies Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, 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 Standalone Financial Statements

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

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 to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

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

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 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.

Emphasis of Matter:

Without qualifying, we draw attention to note no. 27 of the financial statements regarding the financial statements of the Company prepared on going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of the business. The Company has incurred a loss of Rs.635.2 Mn during the year ended March 31, 2015 (loss of Rs.699.6 Mn in the previous year) and as of the date, has accumulated losses of 2,521.3 Mn. Further, the Company has defaulted in dues to its lenders. These conditions indicate the existence of uncertainty that may cast doubt about the Company ability to continue as a going concern.

As explained by the management, during the year, modification has been done in ReNew to operate plant at optimum level and improving the quality of the product. The Company is gradually shifting its focus where the Company can realize premium pricing. The Company has started receiving orders from premium brands at premium pricing. Due to above the Company expects to achieve significant improvement in operating margins going forward. The management is negotiating with its lenders to reschedule/revise the terms of the debts. Also, the Parent Company has confirmed its intentions to provide to the Company for at least for the forthcoming 12 months with any financial, technical and administrative support it may require in order to pursue the operations and honoring the commitments.

Accordingly, management believes that it is appropriate to prepare the financial statements on a going concern basis. Therefore, the financial statements do not include any adjustment relating to the recoverability and classification of recorded assets and to the amounts of liabilities that might be necessary, should the Company be unable to continue its operations as going concern.

Report on Other Legal and Regulatory Requirements

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

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

a) We have sought and obtained all the information and explanations which to the best of our 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 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 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.

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 aforesaid financial statements- Refer Note 29 to the financial statements;

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF THE POLYGENTA TECHNOLOGIES LIMITED ON STANDALONE FINANCIAL STATEMENTS

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we state that:

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

b) The Company has not carried out physical verification of all its fixed assets during the year. The Company carries out physical verification of Fixed Assets over the period of two years and make adjustments for discrepancies accordingly. In our opinion, the frequency of verification is reasonable considering the size of the Company and the nature of its assets except in case of Plant and Machinery which needs to be verified every year.

2. a) The inventory has been physically verified by the management at reasonable intervals during the year. Inventory lying with third parties and in- transit have been verified by the management with reference to the confirmations received from them and/or subsequent receipt of goods.

b) The procedures for physical verification of the inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and book records were not material considering the operations of the Company and have been properly dealt with in the books of account.

3. During the year, 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.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased and sold are of the special nature and suitable alternative source does not exist for obtaining comparable quotations and also considering internal audit report and special report of an independent expert, the internal control systems need to be strengthened to be commensurate with the size of the Company and nature of its business for purchase of inventory, fixed assets and with regard to the sale of goods and services. As explained, necessary steps have been taken by the Company in this regard.

5. No deposits within the meaning of directives issued by RBI (Reserve Bank of India) and Sections 73 to 76 or any other relevant provisions of the Act and rules framed there under have been accepted by the Company.

6. On the basis of records produced, we are of the opinion that prima facie, the cost records and accounts prescribed by the Central Government under Section 148 (1) of the Act have been maintained. However, we are not required to and thus have not carried out any detailed examination of such accounts and records, with a view to ascertain whether these are accurate and complete.

7. a) The Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues applicable to the Company with the appropriate authorities. No undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable.

b) According to the records of the Company, there are no dues of Income Tax, Sales Tax, Service tax or duty of Customs or duty of Excise or Value Added Tax or Cess which have not been deposited on account of any dispute except the following:

Name of Nature Forum where the Financial Amount in the Statute of Dues dispute is pending Year Million (Rs.)

The Income Tax Income-Tax Income Tax Appellate 2002-03 to 70.76 Act, 1961 Tribunal (ITAT) 2004-05

Central Excise Excise duty / Customs, Excise and 2008-09 and 3.89 Act, 1944 Service Tax Service Tax Appellate 2009-10 Tribunal (CESTAT)

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

8. The Company has accumulated losses exceeding by more than fifty percent of its net worth at the end of the financial year. The Company has incurred the cash losses of in the financial year and in the immediately preceding financial year.

9. The Company has defaulted in repayment of dues of Rs. 661 Mn (including overdue interest of Rs. 257.8 Mn) of financial institutions as per details under –

Period of default Amount in Million (Rs.)

0 – 1 Year 407.4

1 – 2 Years 104.9

2 – 5 Years 148.7

As explained, the management is negotiating with its lenders to reschedule/revise the terms of the debts.

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

11. Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

12. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing standards in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management except one case file against ex-promoter in respect of irregularities of Rs.83 Mn.

For LODHA & COMPANY

Chartered Accountants

Firm Registration No: 301051E

A. M. Hariharan

Partner

Membership No. 38323

Place: Mumbai

Date: 28th May 2015


Mar 31, 2014

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance 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") read with the general circular 15/2013 dt. 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

Opinion

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

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

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

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

Emphasis of Matter:

Without qualifying, we draw attention to note no. 27 of the financial statements regarding the financial statements of the Company prepared on going concern basis which contemplates the realization of assets and the satisfaction of liabilities in the normal course of the business. The Company has incurred a loss of Rs. 699.6 Mn during the year ended March 31, 2014 (loss of Rs. 681.6 Mn in the previous year) and as of the date, has accumulated losses of Rs. 1,881.3 Mn. These conditions indicate the existence of uncertainty that may cast doubt about the Company ability to continue as a going concern.

The Company''s plant operations have significantly improved and are also looking further expansion by debottlenecking, etc. The parent Company has confirmed is intentions to provide to the Company, at least for the forthcoming twelve months, with any financial, technical and administrative support it may require in order to pursue the operation and honour the commitments.

Accordingly, management believes that it is appropriate to prepare the financial statements on a going concern basis. Therefore, the financial statements do not include any adjustment relating to the recoverability and classification of recorded assets and to the amounts of liabilities that might be necessary should the Company be able to unable continue as a going concern.

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 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, 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 Balance Sheet, 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 the written representations received from the directors as on 31st March, 2014 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF THE POLYGENTA TECHNOLOGIES LIMITED

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

(b) As explained, the assets have been physically verified by the management in accordance with the phased programme designed to cover all the assets over two years. In our opinion, the frequency of verification is reasonable considering the size of the Company and nature of its fixed assets. As informed, no major discrepancies were noticed on such verification.

(c) No substantial/major part of fixed assets has been disposed off by the Company during the year.

2. (a) The inventories have been physically verified by the management at reasonable intervals during the year.

(b) The procedures of physical verification of inventories followed by the management are adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. During the year, discrepancies noticed on physical verification of stocks as compared to book records were not material and has been appropriately dealt with.

3. The Company has not taken/granted any loans, secured or unsecured, from/to Companies, Firms and other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items of fixed assets and inventories purchased are of 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 with regard to the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in their internal control system.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating during the year to Rs. 5,00,000 or more in respect of each party, have been made at the prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA and other relevant provisions of the Act and rules framed there under.

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

8. We have broadly reviewed the cost records maintained by the Company, pursuant to the Order of the Central Government under Section 209(1)(d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of such records with a view to determine whether they are accurate or complete.

9. (a) During the year, 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, Service tax, Customs duty, Excise duty, Cess and other statutory dues with the appropriate authorities except certain delays in payment of income tax and service tax. There are no statutory dues outstanding for more than six months as on 31st March, 2014 from the date they became payable.

b) According to the records of the Company, there are no dues in respect of Sales Tax/ Income Tax/ Custom Duty/ Wealth Tax/ Service Tax/Excise Duty/ cess which have not been deposited on account of any dispute except the following:

Name of Nature Forum where the Financial Amount in the Statute of Dues dispute is pending Year Million (Rs.) The Income Tax Act, Income- tax C.I.T. (Appeals) 2002-03 88.76 1961 to 2004-05

Central Excise Act, Excise duty / Customs, Excise 2008-09 4.09 1944 Service tax and Service Tax and Appellate Tribunal 2009-10 (CESTAT)

10. The Company has accumulated losses exceeding by more than fifty percent of its net worth at the end of the financial year. The Company has incurred cash losses during the financial year and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or banks.

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

13. As the Company is not a nidhi/ mutual benefit fund/ society, the provisions of clause 4(xiii) of the Order is not applicable to the company.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments the provisions of clause 4(xiv) of the Order is not applicable to the company.

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

16. According to the information and explanations given to us, term loans were applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of cash flow statements and balance sheets of the Company, in our opinion, the funds of Rs. 288.7 Mn as at the close of the year raised on short term basis have been applied for long term investments.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act.

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

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

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

For LODHA & COMPANY

Chartered Accountants

Firm Registration No: 301051E

A. M. Hariharan

Place: Mumbai Partner

Date: 26th May 2014 Membership No. 38323


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance 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.

Auditors'' Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

(c) The Balance Sheet, 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 Balance Sheet, 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 the written representations received from the directors as on 31st March, 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF THE POLYGENTA TECHNOLOGIES LIMITED

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

(b) As explained, the assets have been physically verified by the management in accordance with the phased programme designed to cover all the assets over two years. In our opinion, the frequency of verification is reasonable considering the size of the Company and nature of its fixed assets. As informed, no major discrepancies were noticed on such verification.

(c) No substantial/major part of fixed assets has been disposed off by the Company during the year.

2. (a) The inventories have been physically verified by the management at reasonable intervals during the year.

(b) The procedures of physical verification of inventories followed by the management are adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. During the year, discrepancies noticed on physical verification of stocks as compared to book records were not material and has been appropriately dealt with.

3. The Company has not taken/granted any loans, secured or unsecured, from/to Companies, Firms and other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items of fixed assets and inventories purchased are of 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 with regard to the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in their internal control system.

5. (a) During the year, the Company has not entered into a contract that needs to be entered in the register maintained under Section 301 of the Act.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating during the year to Rs. 5,00,000 or more in respect of each party, have been made at the prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA and other relevant provisions of the Act and rules framed thereunder.

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

8. We have broadly reviewed the cost records maintained by the Company, pursuant to the Order of the Central Government under Section 209(1) (d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of such records with a view to determine whether they are accurate or complete.

9. (a) During the year, 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, Service tax, Customs duty, Excise duty, Cess and other statutory dues with the appropriate authorities except certain delays in payment of income tax and service tax. There are no statutory dues outstanding for more than six months as on 31st March, 2013 from the date they became payable.

10. The Company has accumulated losses exceeding by more than fifty percent of its net worth at the end of the financial year. The Company has incurred cash losses during the financial year and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or banks.

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

13. As the Company is not a nidhi/ mutual benefit fund/ society, the provisions of clause 4(xiii) of the Order is not applicable to the company.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments the provisions of clause 4(xiv) of the Order is not applicable to the company.

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

16. According to the information and explanations given to us, term loans were applied for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall examination of cash flow statements and balance sheets of the Company, in our opinion, the funds raised on short term basis have been prima facie, not been used for long term investments.

18. According to the information and explanations given to us, the Company has made preferential allotment of shares to a company covered in the Register maintained under Section 301 of the Act. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the Company.

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 or in the recent past.

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

For LODHA & CO.

Chartered Accountants

Firm Registration No: 301051E

A. M. Hariharan

Partner

Membership No. 38323

Place: Mumbai

Date: 31st May 2013


Mar 31, 2012

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

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

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section(4A) of section 227 of the Companies Act, 1956 (hereinafter referred to as "the Act"), we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) We are unable to express an opinion as to when and to what extent the Net Deferred tax Assets of Rs.96.6 million recognized in respect of unabsorbed depreciation / losses during the period ended December 31,2008 would reverse as there is no virtual certainty as contemplated in the Accounting Standards (AS) 22 'Accounting for Taxes on Income" issued by Companies (Accounting Standards) Rules, 2006, the impact whereof on the financial statements (current year loss and accumulated losses) is presently not ascertainable.

b) We have obtained all the information and explanations which, to the best of our knowledge and belief were necessary for the purposes of our audit;

c) 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;

d) 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;

e) Subject to what is stated in paragraph (a) above, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of Act, to the extent applicable;

f) On the basis of written representations received from the directors as on March 31,2012 and taken on record by the Board of Directors, wherever applicable! we report that none of the directors is disqualified as on March 31,2012 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

g) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with Significant Accounting Policies and other accompanying Notes subject to what is stated in para 4(a) above regarding recognition of deferred tax assets inspite of there being no virtual certainty and consequential impact whereof on 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 generally accepted accounting principles 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 loss of the Company for the year ended on that date; and

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

Annexure referred to in paragraph 3 of our report of even date on the Financial Statements as at and for the year ended March 31, 2012 of Polygenta Technologies Limited

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

(b) As explained, the assets have been physically verified by the management in accordance with the phased programme designed to cover all the assets over two years. In our opinion, the frequency of verification is reasonable considering the size of the Company and nature of its fixed assets. As informed" no major discrepancies were noticed on such verification.

(c) No substantial/major part of fixed assets has been disposed off by the Company during the year.

2. (a) The inventories have been physically verified by the management at reasonable intervals during the year.

(b) The procedures of physical verification of inventories followed by the management are adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. During the year, discrepancies noticed on physical verification of stocks as compared to book records were not material and has been appropriately dealt with.

3. The Company has not taken/granted any loans, secured or unsecured, from/to Companies, Firms and other parties covered in the register maintained underSection301oftheAct.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items of fixed assets and inventories purchased are of 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 with regard to the purchase of inventories and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in their internal control system.

5. (a) During the year, the Company has not entered into a contract that needs to be entered in the register maintained under Section 301 of the Act.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and aggregating during the year to Rs. 5,00,000 or more in respect of each party, have been made at the prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA and other relevant provisions of the Act and rules framed thereunder.

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

8. We have broadly reviewed the cost records maintained by the Company, pursuant to the Order of the Central Government under Section 209(1) (d) of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of such records with a view to determine whether they are accurate or complete.

9. (a) During the year, 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, Service tax, Customs duty, Excise duty, Cess and other statutory dues with the appropriate authorities except certain delays, ranging between 2 to 100 days, in payment of sales tax and service tax. There are no statutory dues outstanding for more than six months as on 31st March, 2012 from the date they became payable.

b) According to the records of the Company, there are no dues in respect of Sales Tax/ Income Tax/ Custom Duty/ Wealth Tax/ Service Tax/Excise Duty/ cess which have not been deposited on account of any dispute except excise duty/service tax of Rs. 4.40 million relating to the year's 2008-09 and 2009-10, dispute where of is pending in the Customs, Excise and service tax appellate Tribunal (CESTAT).

10. The Company has no accumulated losses exceeding by more than fifty percent of its net worth at the end of the financial year. The Company has incurred cash losses during the financial year and not in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or banks.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and othersecurities

13. As the Company is not a nidhi/ mutual benefit fund/ society, the provisions of clause 4(xiii) of the Order is not applicable to the company.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments the provisions of clause 4(xiv) of the Order is not applicable to the company.

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

16. According to the information and explanations given to us, the Company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of cash flow statements and balance sheets of the Company, in our opinion, the funds raised on short term basis have been prima facie, not been used for long term investments.

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

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 or in the recent past.

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

For LODHA & CO.

Chartered Accountants

Firm Registration No: 301051E

R. P. Baradiya

Place: Mumbai Partner

Date: May 30, 2012 Membership No. 44101





 
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