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Auditor Report of Polyplex Corporation Ltd.

Mar 31, 2015

We have audited the accompanying Standalone Financial Statements of Polyplex Corporation 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 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 there under.

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 profit 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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of audit, we give in the Annexure a statement on the matters specified in the 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 its standalone financial statements – Refer Note no. 26 B (i) to the standalone financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts – Refer Note 26 J (i), (ii) & (iii) to the standalone financial statements.

iii. There has been no delay in transferring amounts, 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 FOR THE YEAR ENDED 31ST MARCH 2015:-

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

(b) The fixed assets have been physically verified by the management according to the programme of periodical physical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such physical verification were not material.

2. (a) The inventories of the Company (except stock lying with third parties and in transit for which confirmations have been received / materials received) have been physically verified by the management at reasonable intervals.

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. The Company has granted unsecured loan to two companies covered in the register maintained under Section 189 of the Companies Act, 2013.

(a) In respect of aforesaid loan, the receipt of principal amount and interest amount is regular.

(b) The Recovery of principal amount and interest is as per stipulation.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Based on the audit procedure performed and on the basis of information and explanations provided by the management, during the course of audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public within the meaning of Section 73 to 76 of the Act or any other relevant provisions of the Act and the rules framed there under with regard to deposits accepted from the public. We have been informed that no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or other tribunal in this regard.

6. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Act in respect of the company's products to which they said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have, however, not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

7. (a) According to the records of the Company and information and explanations given to us, the Company is 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 and Cess and other material statutory dues with the appropriate authorities to the extent applicable and there were no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2015.

(b) According to the records and information & explanations given to us, there are no dues in respect of Income Tax, Wealth Tax, Service Tax, Duty of Custom, and Cess that have not been deposited with the appropriate authorities to the extent applicable on account of any dispute and the dues in respect of Sales Tax, VAT and Excise duty that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below:-

Name of Nature of Period Amount Forum where disputes are the Statute dues (Financial (Rs. in pending Year) Lacs)

Sale Tax Act Sale Tax 1996-1997 18.40 High Court

1997-1998 28.55 Deputy Commissioner (Appeal)

1998-1999 29.05 Deputy Commissioner (Appeal)

2008-2009 1.28 Tribunal

2010-2011 1.71 Jt. Commissioner

U.P. Tax on Entry Tax 2001-2002 0.61 Tribunal Entry of Goods Act

Central Excise Excise Duty 2009-2010 19.91 Additional Commissioner Act, 1944 and Penalty

Refer Note No. 26 B(i) to the Standalone Financial Statements.

(c) According to the records of the Company and information and explanations given to us, the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made there under has been transferred to such fund within time.

8. The Company does not have accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year & in the immediately preceding financial year.

9. In our opinion, on the basis of audit procedure and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

10. In our opinion and 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. On the basis of information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

12. Based on the audit procedure performed and on the basis of information and explanations provided by the management, no fraud on or by the Company has been noticed or reported during the course of our audit.

For Lodha & Co.,

Chartered Accountants

(Firm Regn. No. 301051E)



N. K. Lodha

Place : New Delhi Partner

Date : May 30, 2015 Membership No. 85155


Mar 31, 2014

We have audited the accompanying Financial Statements of Polyplex Corporation Limited, which comprise the Balance Sheet as at 31st March 2014, and 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

Management is responsible for the preparation of these Financial Statements that give a true and the 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"), read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the Financial Statements that give a true and fair view and 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 the ethical requirements and plan and perform the audit to obtain the 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 assessment of risks of material misstatement of the Financial Statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company''s preparation and fair presentation of the Financial Statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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 audit opinion.

OPINION

In our opinion and best to our information and according to the explanations given to us, the Financial Statements and read together with the other notes thereon give the information required by Act in the manner so require 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 the affairs of the company as at 31st March 2014,

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

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

REPORT ON OTHER LEGAL AND THE 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 the Annexure a statement on the, manners specified in the 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 appears from our examination of those books;

c. The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of accounts;

d. In our opinion, Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report comply with the Accounting Standards referred to in sub- section (3C) of section 211 of Companies Act, 1956, read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT FOR THE YEAR ENDED 31.03.2014 :

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

(b) We have been informed by the management that fixed Assets have been physically verified by the management during the year according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. According to the information and explanations given to us, discrepancies noticed on such physical verification were not material.

(c) As per the records and information and explanations given to us, no substantial part of Fixed Assets has been disposed off during the year and therefore does not affect the going concern assumption.

2. (a) We have been explained by the management that the Inventory of the Company at all its locations (except stocks lying with third parties/in transit, which have been verified after subsequent receipt of material/on confirmation) have been physically verified by the Management at reasonable intervals.

(b) In our opinion and according to information and explanations given to us, the procedures of physical verification of inventory 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 information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the Company has granted unsecured loan to a company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year in respect of said company/person is Rs.2600 Lacs and the year end balance of such loan is Rs.2500 Lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the company.

(c) In respect of aforesaid loan, the receipt of principal amount and interest is regular.

(d) The recovery of principal amount and interest during the year is as per stipulation.

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

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of specialised nature, taking into consideration the quality, usage and such other factors, comparative sources/quotations are not available, the Company has internal control systems commensurate with the size of the Company and nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. Further, on the basis of examination of the books and records of the Company and according to the information and explanations given to us and as per the checking carried out in accordance with the auditing standards generally accepted in India, neither we have observed nor we have been informed of any continuing failure to correct major weaknesses in internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contract or arrangement that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered into the register maintained under section 301 of the Act and exceeding the value of rupees five Lacs in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Act and rules framed thereunder. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. The Central Government has prescribed maintenance of cost records under Section 209(1)(d) of the Act, in respect of Polyester Chips. On the basis of the records produced and broadly reviewed by us, we are of the opinion that, prima facie, the prescribed records have been made and maintained. However, we are not required to and have not carried out any detailed examination of the said records, with a view to determine whether they are accurate or complete.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Sales tax, Wealth tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues have generally been deposited in time during the year with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 2014.

(b) In our opinion and according to the information & explanations given to us, there are no dues in respect of income tax, wealth tax, service tax and cess that have not been deposited with appropriate authority on account of any dispute and the dues in respect of sales tax, customs duty and excise duty that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below:

Name of Nature of Period to which Amount Forum where disputes are the Statute dues the Amount (Rs. in pending Relates Lacs)

U.P. Tax on Entry Tax 2001-02 0.61 Tribunal Entry of Goods Act

Sales Tax Act Sales Tax 1996-97 18.40 High Court

1997-98 28.55 Deputy Commissioner (Appeals)

1998-99 29.05 Deputy Commissioner (Appeals)

2008-09 1.28 Tribunal

2010-11 7.00 Joint Commissioner

Central Excise Excise Duty 2009-10 19.91 Additional Commissioner Act, 1944 and Penalty

10. The Company does not have accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to financial institutions or banks or debenture holders.

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. The Company is not a chit fund or a nidhi / mutual benefit fund / society, therefore, the clause 4 (xiii) of The Order is not applicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16. In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

17. On the basis of information and explanations given to us and on an overall examination of the Balance Sheet of the Company, no funds raised on short- term basis have been used for long-term investment.

18. The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The Company has not issued any debentures.

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

21. Based upon the audit procedures performed in accordance with accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed nor reported, during the year nor we have been informed of such case by the management.

For Lodha & Co.,

Chartered Accountants

(Firm Regn. No. 301051E)

N. K. Lodha

Place : New Delhi Partner

Date : May 30, 2014 Membership No. 85155


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying Financial Statements of Polyplex Corporation Limited, which comprise the Balance Sheet as at 31st March 2013, and 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

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 free from material misstatements, 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 the ethical requirements and plan and perform the audit to obtain the 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 assessment of 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 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 audit opinion.

OPINION

In our opinion and best to our information and according to the explanations given to us, the Financial Statements and read together with the other notes thereon give the information required by the Act in the manner so require 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 the affairs of the company as at 31st March 2013,

b. In the case of the Statement of the 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 manners specified in the 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 appears from our examination of those books;

c. The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of accounts;

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

e. On the basis of the written representations received from the Directors and taken on records by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March 2013 from being appointed as a Director of the Company in terms of clause (g) of Sub- section (1) of Section 274 of the Companies Act, 1956.

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

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

(b) We have been informed by the management that fixed Assets have been physically verified by the management during the year according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. According to the information and explanations given to us, discrepancies noticed on such physical verification were not material.

(c) As per the records and information and explanations given to us, no substantial part of Fixed Assets has been disposed off during the year and therefore does not affect the going concern assumption.

2. (a) We have been explained by the management that the Inventory of the Company at all its locations (except stocks lying with third parties/in transit, which have been verified after subsequent receipt of material/on confirmation) have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to information and explanations given to us, the procedures of physical verification of inventory 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 information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the Company has granted unsecured loan to a company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year in respect of said company/person is Rs 2600 Lacs and the year end balance of such loan is Rs 2600 Lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the company.

(c) In respect of aforesaid loan, the receipt of principal amount and interest is regular.

(d) The recovery of principal amount and interest during the year is as per stipulation.

(e) As informed to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of specialised nature, taking into consideration the quality, usage and such other factors, comparative sources/quotations are not available, the Company has internal control systems commensurate with the size of the Company and nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. Further, on the basis of examination of the books and records of the Company and according to the information and explanations given to us and as per the checking carried out in accordance with the auditing standards generally accepted in India, neither we have observed nor we have been informed of any continuing failure to correct major weaknesses in internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contract or arrangement that need to be entered into the register maintained under Section 301 of the Act have been so entered.

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

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Act and rules framed thereunder. We have been informed that no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. The Central Government has prescribed maintenance of cost records under Section 209(1)(d) of the Act. On the basis of the records produced and broadly reviewed by us, we are of the opinion that, prima facie, the prescribed records have been made and maintained. However, we are not required to and have not carried out any detailed examination of the said records, with a view to determine whether they are accurate or complete.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Sales tax, Wealth tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues have generally been deposited in time during the year with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 2013.

(b) In our opinion and according to the information & explanations given to us, there are no dues in respect of Income tax, Wealth tax, Service tax and Cess that have not been deposited with appropriate authority on account of any dispute and the dues in respect of sales tax, customs duty and excise duty that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below:

Name of Nature of Period to which Amount Forum where disputes are the Statute dues the Amount (Rs. in pending Relates Lacs)

U.P. Tax on Entry Tax 2001-02 0.61 Tribunal Entry of Goods Act

Sales Tax Act Sales Tax 1996-97 18.40 High Court

1997-98 28.55 Deputy Commissioner (Appeals)

1998-99 29.05 Deputy Commissioner (Appeals)

2002-03 2.60 Tribunal

2004-05 35.80 Deputy Commissioner (Assessment)

2006-07 0.70 Joint Commissioner (Appeals)

2008-09 1.28 Tribunal

2010-11 7.00 Joint Commissioner Central Excise Excise Duty 2009-10 19.91 Additional Commissioner Act, 1944 and Penalty

10. The Company does not have accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to financial institutions or banks or debenture holders.

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. The Company is not a chit fund or a nidhi / mutual benefit fund / society, therefore, the clause 4 (xiii) of The Order is not applicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16. In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

17. On the basis of information and explanations given to us and on an overall examination of the Balance Sheet of the Company, no funds raised on short- term basis have been used for long-term investment.

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

19. The Company has not issued any debentures.

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

21. Based upon the audit procedures performed in accordance with accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed nor reported, during the year nor we have been informed of such case by the management.

For Lodha & Co.,

Chartered Accountants

(Firm Regn. No. 301051E)

N. K. Lodha

Place : New Delhi Partner

Date : May 30, 2013 Membership No. 85155


Mar 31, 2012

We have audited the attached Balance Sheet of Polyplex Corporation Limited as at 31st March, 2012, 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.

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

We report that- 1. As required by the Companies (Auditor's Report) Order, 2003 (as amended) ("the Order") issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956 (the Act), we enclose in the Annexure, a Statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in Paragraph 1 above, we report that:

a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 appears from our examination of those books;

c) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of account;

d) In our opinion, read with Note No. 26 K(III) regarding capitalization of Foreign Derivative loss incurred in relation to import of capital goods, 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 the Companies Act, 1956;

e) According to the information and explanation given to us none of the directors as on 31st March 2012 is disqualified from being appointed as director under section 274(1)(g) of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies, Notes 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, 2012;

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

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

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph (1) of our Report of even date of Polyplex Corporation Limited for the year ended 31st March 2012)

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

(b) We have been informed by the Management that Fixed Assets have been physically verified by the Management during the year according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. According to the information and explanations given to us, discrepancies noticed on such physical verification were not material.

(c) As per the records, information and explanations given to us, no substantial part of Fixed Assets has been disposed off during the year and therefore does not affect the going concern assumption.

2. (a) We have been explained by the Management that the Inventory of the Company at all its locations (except stocks lying with third parties/in transit) have been physically verified by the Management at reasonable intervals.

(b) In our opinion and according to information and explanations given to us, the procedures of physical verification of inventory 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 information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the Company has granted unsecured loan to a Company covered in the Register maintained under Section 301 of the Act. The maximum amount involved during the year in respect of said Company/Person is Rs. 1008.83 Lacs and the year end balance of such loan is Rs 1000 Lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the Company.

(c) In respect of aforesaid loan, the receipt of principal amount and interest is regular.

(d) The recovery of principal amount and interest during the year is as stipulated.

(e) As informed to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of specialised nature, taking into consideration the quality, usage and such other factors, comparative sources/quotations are not available, the Company has internal control systems commensurate with the size of the Company and nature of its business (read with Note No. 26E) for the purchases of inventory, fixed assets and for the sale of goods and services which needs to be further strengthened. Further, on the basis of examination of the books and records of the Company and according to the information and explanations given to us and as per the checking carried out in accordance with the auditing standards generally accepted in India, neither we have observed nor we have been informed of any continuing failure to correct major weaknesses in internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contract or arrangement that need to be entered into the Register maintained under Section 301 of the Act have been so entered.

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

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Act and Rules framed thereunder. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. The Central Government has prescribed maintenance of cost records under Section 209(1)(d) of the Act. On the basis of the records produced and broadly reviewed by us, we are of the opinion that, prima facie, the prescribed records have been made and maintained. However, we are not required to and have not carried out any detailed examination of the said records, with a view to determine whether they are accurate or complete.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues have generally been deposited in time during the year with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 2012.

(b) In our opinion and according to the information & explanations given to us, there are no dues in respect of Wealth Tax, Service Tax and Cess that have not been deposited with appropriate authority on account of any dispute and the dues in respect of Sales Tax, Customs Duty, Excise Duty, and Income Tax that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below:

Name of Nature of Period to Amount Forum where the Statute dues the which (Rs. in disputes are Amount Lacs) pending Relates

U.P. Tax on Entry Tax 2001-02 0.61 Tribunal Entry of Goods Act

Sales Tax Sales Tax 1996-97 18.40 High Court Act

1997-98 28.55 Deputy Commissioner (Appeals)

1998-99 29.05 Deputy Commissioner (Appeals)

2002-03 2.60 Tribunal

2004-05 35.80 Deputy Commissioner (Assessment)

2006-07 0.70 Joint Commissioner (Appeals)

2006-07 63.04 Deputy Commissioner (Appeals)

2008-09 1.28 Tribunal

2010-11 7.00 Joint Commissioner

Central Excise Duty 2009-10 19.91 Additional Excise Act, and Penalty Commissioner 1944

10. The Company does not have accumulated losses as at the end of the Financial Year and has not incurred cash losses in the current Financial Year and in the immediately preceding Financial Year.

11. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to financial institutions or banks or debenture holders.

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. The Company is not a chit fund or a nidhi/mutual benefit fund/ society, therefore, the clause 4 (xiii) of the Order is not applicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16. In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

17. On the basis of information and explanations given to us and on an overall examination of the Balance Sheet of the Company, no funds raised on short- term basis have been used for long-term investment.

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

19. The Company has not issued any debentures.

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

21. Based upon the audit procedures performed in accordance with accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported, during the year nor we have been informed of such case by the Management.



For Lodha & Co., Chartered Accountants (Firm Regn. No. 301051E)

N.K. Lodha Partner Membership No. 85155

Place : New Delhi Date : May 29, 2012


Mar 31, 2011

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

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

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 appears from our examination of those books;

(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account;

(d) In our opinion, read with Note No. 13 (d) of Schedule 14A regarding capitalisation of loss/gain incurred on foreign exchange derivatives in relation to import of capital goods, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

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

In our opinion and according to the explanations given to us, the said accounts read together with significant accounting policies, Notes 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, 2011;

ii) in the case of the Profit & Loss Account, of

the profit for the year ended on that date; and

iii) in the case of Cash Flow Statement, of the

Cash Flows for the year ended on that date.

(f) As required by the Companies (Auditor's Report)

Order, 2003 ('The Order') (As amended) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 ('The Act'), on the matters specified in paragraphs 4 and 5 of the said Order and on the basis of such checks as we considered appropiate and in terms of information and explanations provided to us, we further report that:

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

(b) We have been informed by the Management that fixed Assets have been physically verified by the management during the year according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. According to the information and explanations given to us, discrepancies noticed on such physical verification have been properly accounted.

(c) As per the records, information and explanations given to us, no substantial part of Fixed Assets has been disposed of during the year and therefore does not affect the going concern assumption.

2. (a) We have been explained by the Management that the Inventory of the Company at all its locations (except stocks lying with third parties/in transit) have been physically verified by the Management at reasonable intervals.

(b) In our opinion and according to information and explanations given to us, the procedures of physical verification of inventory 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 information and explanations given to us, the Company is maintaining proper records of inventory and the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the Company has granted unsecured loan to a company covered in the Register maintained under Section 301 of the Act. The maximum amount involved during the year in respect of said company is Rs.800 Lacs and the year end balance of such loan is Nil.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the Company.

(c) In respect of aforesaid loan, the receipt of principal amount and interest is regular.

(d) The recovery of principal amount and interest during the year is as per stipulations.

(e) As informed to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (f) and (g) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of specialised nature, taking into consideration the quality, usage and such other factors, comparative sources/quotations are not available, the Company has internal control systems commensurate with the size of the Company and nature of its business (read with Note No. 6 of Schedule 14A) for the purchases of inventory, fixed assets and for the sale of goods and services which needs to be further strengthened. Further, on the basis of examination of the books and records of the Company and according to the information and explanations given to us and as per the checks carried out in accordance with the auditing standards generally accepted in India, neither we have observed nor we have been informed of any continuing failure to correct major weaknesses in internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contract or arrangement that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered into the Register maintained under section 301 of the Act and exceeding the value of Rupees five Lacs in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Act and Rules framed thereunder. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. The Central Government has prescribed maintenance of cost records under Section 209(1)(d) of the Act, in respect of Polyester Chips. On the basis of the records produced and broadly reviewed by us, we are of the opinion that, prima facie, the prescribed records have been made and maintained. However, we are not required to and have not carried out any detailed examination of the said records, with a view to determine whether they are accurate or complete.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues have generally been deposited in time during the year with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2011

(b) In our opinion and according to the information & explanations given to us, there are no dues in respect of Income Tax, Wealth Tax, Custom Duty, Service Tax and Cess that have not been deposited with appropiate authoroity on account of any dispute and the dues in respect of Sales Tax and Excise Duty that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below:

Name of Nature of Period to which Amount Forum where disputes are the Statute dues the Amount (Rs. in pending Relates Lacs)

U.P. Tax on Entry Tax 2001-02 0.61 Tribunal Entry of Goods Act

Sales Tax Act Sales Tax 2002-03 2.60 Tribunal

2008-09 1.28 Tribunal

1996-97 18.40 High Court

2006-07 63.08 Joint Commissioner (Appeals)

2006-07 0.70 Joint Commissioner (Appeals)

2004-05 35.80 Deputy Commissioner (Assessment)

2010-11 7.00 Deputy Commissioner (Assessment)

1997-98 120.96 Deputy Commissioner (Appeals)

1998-99 63.97 Deputy Commissioner (Appeals)

Central Excise Excise Duty 2001-02 9.22 Commissioner (Appeals) Act, 1944 and Penalty

10. The Company does not have accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to financial institutions or banks. The Company has not borrowed any sums through debentures.

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. The Company is not a chit fund or a nidhi / mutual benefit fund / society, therefore, clause 4 (xiii) of The Order is not applicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16. In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

17. On the basis of information and explanations given to us and on an overall examination of the Balance Sheet of the Company, no funds raised on short-term basis have been used for long-term investment.

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

19. The Company has not issued any debentures.

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

21. Based upon the audit procedures performed

in accordance with accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported, during the year nor we have been informed of such case by the management.

For Lodha & Co.,

Chartered Accountants

Firm Regn. No. 301051E

N.K. Lodha

Place : New Delhi Partner

Dated : May 30, 2011 Membership No. 85155


Mar 31, 2010

We have audited the attached Balance Sheet of Polyplex Corporation Limited as at 31st March 2010, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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 appears from our examination of those books;

(c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account;

(d) In our opinion, read with Note no. 14(d) of schedule 14 regarding capitalisation of loss/gain incurred on foreign exchange derivatives in relation to import of capital goods the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956;

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

In our information and according to the explanations given to us, the said accounts read together with significant accounting policies and Notes 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 for the year ended on that date; and

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

(f) As required by the Companies (Auditors Report) Order, 2003 (The Order)(As amended) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (The Act), on the matters specified in paragraphs 4 and 5 of the said Order and on the basis of such checks as we considered appropiate and in terms of information and explanations provided to us, we further report that:

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

(b) We have been informed by the management that fixed Assets have been physically verified by the management during the year according to the regular programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its Fixed Assets. According to the information and explanations given to us, discrepancies noticed on such physical verification were not material.

(c) As per the records and information and explanations given to us, no substantial part of Fixed Assets has been disposed off during the year and therefore does not affect the going concern assumption.

2. (a) We have been explained by the management that the Inventory of the Company at all its locations (except stocks lying with third parties/in transit) have been physically verified by the Management at reasonable intervals.

(b) In our opinion and according to information and explanations given to us, the procedures of physical verification of inventory 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 information and explanations given to us, the Company is maintaining proper records of inventory (at new location in initial stage, where records are updated as and when physically verified) and the discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) As informed to us, the Company has granted unsecured loan to a company covered in the register maintianed under Section 301 of the Act. The maximum amount involved during the year in respect of said company is Rs. 1,500 lacs and year end balance of such loan is Nil.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms & conditions on which aforesaid loan has been given are not, prima facie, prejudicial to the interest of the company.

(c) In respect of aforesaid loan, the receipt of principal amount and interest is regular.

(d) The recovery of principal amount and interest during the year is as per stipulations.

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

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of specialised nature, taking into consideration the quality, usage and such other factors, comparative sources/quotations are not available, the Company has internal control systems commensurate with the size of the Company and nature of its business (read with note no. 7 of schedule 14A) for the purchases of inventory, fixed assets and for the sale of goods and services which needs to be further strengthened . Further, on the basis of examination of the books and records of the Company and according to the information and explanations given to us and as per the checking carried out in accordance with the auditing standards generally accepted in India, neither we have observed nor we have been informed of any continuing failure to correct major weaknesses in internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contract or arrangement that need to be entered into the register maintained under Section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered into the register maintained under section 301 of the Act and exceeding the value of rupees five lacs in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Act and rules framed there under. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. The Central Government has prescribed maintenance of cost records under Section 209(1)(d) of the Act, in respect of Polyester Chips. On the basis of the records produced and broadly reviewed by us, we are of the opinion that, prima facie, the prescribed records have been made and maintained. However, we are not required to and have not carried out any detailed examination of the said records, with a view to determine whether they are accurate or complete.

9. (a) In our opinion and according to the information and explanations given to us, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service Tax, Custom Duty, Excise Duty, Cess and any other statutory dues have generally been deposited in time during the year (except some delay in deposit of service tax) with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 2010.

(b) In our opinion and according to the information & explanations given to us, there are no dues in respect of wealth tax, service tax and cess that have not been deposited with appropiate authority on account of any dispute and the dues in respect of sales tax, customs duty, excise duty, and income tax that have not been deposited with the appropriate authorities on account of dispute and the forum where the dispute is pending are given below:

Name of Nature of Period to which Amount Forum where disputes are the Statute dues the Amount (Rs. in pending Relates Lacs)

U.P. Tax on Entry Tax 2001-02 0.61 Tribunal Entry of Goods Act

Sales Tax Act Sales Tax 2002-03 2.60 Tribunal

2008-09 1.28 Tribunal

1996-97 18.40 Joint Commissioner (Appeals)

2006-07 0.70 Joint Commissioner (Appeals)

2004-05 35.80 Deputy Commissioner (Assessment)

1997-98 120.96 Deputy Commissioner (Appeals)

1998-99 63.97 Deputy Commissioner (Appeals)

Central Excise Excise Duty 2001-02 9.22 Commissioner (Appeals) Act, 1944 and Penalty

10. The Company does not have accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of any dues to financial institutions or banks. The Company has not borrowed any sums through debentures.

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. The Company is not a chit fund or a nidhi / mutual benefit fund / society, therefore, the clause 4 (xiii) of The Order is not applicable to the Company.

14. According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments.

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

16. In our opinion and on the basis of information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

17. On the basis of information and explanations given to us and on an overall examination of the Balance Sheet of the Company, no funds raised on short-term basis have been used for long-term investment.

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

19. The Company has not issued any debentures.

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

21. Based upon the audit procedures performed in accordance with accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported, during the year nor we have been informed of such case by the management.

For Lodha & Co.,

Chartered Accountants

Firm Regn. No. 301051E

Place : New Delhi N.K. Lodha

Dated : July 20, 2010 Partner

Membership No. 85155

 
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