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Auditor Report of Precot Meridian Ltd.

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible 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 of 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 and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone 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 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the standalone financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the company's directors, as well as evaluating the overall presentation of the standalone 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, its loss and its cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to note no. 2.34 of standalone financial statements on discontinuance of application of Accounting Standards 30 & 32 on Financial Instruments with effect from financial year 2014-15. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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 written representations received from the directors as on March 31, 2015, and taken on record by the Board of directors, none of the directors is disqualified as on March 31, 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 2.29 on contingent liabilities 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 2.05 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 to Independent Auditor's Report

[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' in the Independent Auditor's Report of even date to the members of Precot Meridian Limited on the standalone financial statements for the year ended 31.3.2015]

i) (a) The company has maintained proper

records showing full particulars, including quantitative details and situation of fixed assets.

(b) During the year, the fixed assets of the company have been physically verified by the management and as informed, no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable having regard to the size of the company and the nature of its assets.

ii) a) The inventory (excluding stock lying with

third parties) has been physically verified by the management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

c) The company is maintaining proper records of inventory. As informed no material discrepancies were noticed on physical verification carried out during the year.

iii) As informed, 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. Accordingly, the provisions stated in paragraph 3 (iii)(a) and 3 (iii)(b) of the Order are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there exists an adequate internal control system 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. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system of the company.

v) 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 provisions of sections 73 to 76 of the Act and the rules framed there under.

vi) The Central Government of India has not prescribed the maintenance of cost records for any of the products of the company under sub- section (1) of section 148 of the Act and the rules framed there under.

vii) a) The company is regular in depositing with

appropriate authorities, undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it.

and

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, were outstanding, at the year end, for a period of more than six months from the date they became payable.

b) According to the information and explanation given to us, the dues outstanding with respect to, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, on account of any dispute, are as follows:

Name of the Amount period to Forum where Statute Nature of dues (Rs lacs) which the dispute is pending amount relates

Central Excise Excise Duty and 432.74 2001-2002 Supreme Court Act 1944 Penalties

Central Sales Central Sales Tax 648.18 1998-99 & Madras High Court Tax Act,1956 1999-2000

Central Excise Excise Duty and 29.78 2001 to 2003 CESTAT, Bangalore Act 1944 Penalties

Central Excise Excise Duty, 22.87 2008-2009 Commissioner Act 1944 Penalties and Appeals, Kochi Interest

Service Tax Service Tax, 9.49 2007-08 Tribunal Penalties and Interest

Income Tax Income Tax 547.50 AY 2009-10 to CIT (Appeals) Act,1961 AY 2011-12 Coimbatore

Income Tax Income Tax 725.06 AY 1994-95 High Court Act,1961 and (234 B waiver AY 1995-96 Chennai and interest u/s 220(2) AY 1997-98 Income Tax Tribunal AY 2005-06 Chennai

c) According to the information and explanations given to us, there has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the company.

viii) The company does not have accumulated losses at the end of the financial year nor has incurred cash losses in the current and immediately preceding financial year.

(ix) According to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institution(s), bank(s) or debenture holder(s).

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

(xi) According to the information and explanations given to us, the term loans have been applied for the purpose for which the loans were obtained.

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

For Haribhakti & Co. LLP Chartered Accountants Firm Reg.No.: 103523W C S Sathyanarayanan Place : Coimbatore Partner Date : 15th May 2015 M.No.: 028328






Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements:

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

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

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

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

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

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

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

Annexure to Independent Auditors'' Report

[Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors'' Report of even date to the members of Precot Meridian Limited on the financial statements for the year ended31s''March 2014]

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

b) The fixed assets of the company have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the company during the year.

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

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

c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

iii. a) As informed, the Company has not, granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii) (b), (c) and (d) of the order are not applicable.

b) As informed, the Company has not, taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii)(f)and (g) of the order are not applicable.

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct weakness in internal control system of the company.

v. 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 Companies Act, 1956 that need to be entered into the register maintained under section 301 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 exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

viii. We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

ix. a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including investor education and protection fund, income-tax, sales-tax, wealth- tax, service tax, customs duty, excise duty, cess and other material statutory dues except incase of provident fund and employees'' state insurance where there were slight delays in a few cases.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable,

c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of the Amount Period to Forum where

Statute Nature of dues (lacs) which the dispute is pending

amount relates

Central Excise Excise Duty and Penalties 432.74 2001-2002 Supreme Court Act 1944

Central Sales Central Sales Tax 648.18 1998-99 & Madras High Court

Tax Act, 1956 1999-2000

Central Excise Excise Duly and Penalties 29.78 2001 to 2003 CESTAT,Bangalore

Act 1944

Central Excise Excise Duty, Penalties and 29.97 2008-2009 Commissioner Appeals,

Act 1944 Interest Kochi

ServiceTax Service Tax & Penalties 13.38 2004-05 Assistant Commissioner

of Central Excise (Appeals)

ServiceTax Service Tax, Penalties and 9.49 2007-08 Tribunal

Interest

IncomeTax IncomeTax 547.50 AY2009-10 to CIT(Appeals)

Act.1961 AY 2011-12 Coimbatore

IncomeTax Income Tax (234 B waiver 725.06 AY1994-95 High Court

Act, 1961 and interest u/s 220(2) AY 1995-96 Chennaiand

AY 1997-98 Income Tax Tribunal

AY 2005-06 Chennai

x. The company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

xi. In our opinion 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.

xii. According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and

other investments. Accordingly, the provisions of clause (xiv) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

xv. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the company.

xvi. In our opinion, the term loans have been applied for the purpose for which the loans were raised.

xvii. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the company, we are of the opinion that the funds raised on short term basis amounting to Rs. 1535 lacs have been temporarily used for long term investments. The company has invested the money for its technical textiles project.

xviii. According to the information and explanations given to us, the company has not made preferential allotment of shares to parties and companies covered in the register maintained under section 301 oftheAct.

xix. According to the information and explanations given to us, no debentures have been issued by the company during the year.

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

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

For Haribhakti & Co.,

Chartered Accountants

Firm Reg.No.: 103523W

C S Sathyanarayanan

Place : Coimbatore Partner

Date : 30th May 2014 M.No.: 028328


Mar 31, 2012

1. We have audited the attached Balance Sheet of Precot Meridian Limited (the Company) as at March 31st, 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.

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

3. As required by the Companies (Auditor's Report) Order, 2003, (as amended), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956' (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, 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 paragraph 3 above, we report that:

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

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

iii. The balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account;

iv. In our opinion, the balance sheet, statement of profit and loss and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

v. On the basis of the written representations received from the directors, as on March 31st, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31st, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31st, 2012;

b) in the case of the statement of profit and loss account, of the loss for the year ended on that date; and

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

Annexure to Auditors' Report

(Referred to in paragraph 3 of the Auditors Report of even date to the members of Precot Meridian Limited on the financial Statement 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) The fixed assets of the company have been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

3. (a) As informed, the Company has not, during the year, granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii)(b),(c) and (d) of the order are not applicable.

(b) As informed, the Company has not, during the year, taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii) (f)and (g) of the order are not applicable.

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

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 Companies Act, 1956 that need to be entered into the register maintained under section 301 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 exceeding value of Rupees five lakhs have been entered into during the financial year 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 Sections 58A and 58AA of the Act and the 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 books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

9. (a) The Company is regular in depositing with appropriate authorities 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 material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of Nature of Amount of Period to Forum where the Statute the dues demand which dispute is (Rs. lacs) (Rs. lacs) amount pending relates

Central Excise Excise Duty 432.74 2000-01; Supreme Court Act 1944 and Penalties 2001-02

Central Excise Excise Duty 12148 2001-02; Madras High Act 1944 and Penalties 2008-10 Court

Tamil Nadu Sales Tax 12.61 1994-95; Madras High General Sales 1998-99 Court tax 1959

Central Excise Excise Duty 24.63 2007-08; Commissioner Act 1944 and Penalties 2008-09 appeals, Kochi

Central Excise Excise Duty 29.78 2000-01; CESTAT, Act 1944 and Penalties 2002-03 Bangalore

Service Tax Service Tax 2.07 1997-98 Commissioner appeals,

AP VAT 2005 Sales Tax 24.77 1999-00; AP Sales tax 2004-05; Appellate Tribunal

Central Sales Central 648.18 1998-99; Assessing Tax 1956 sales Tax 1999-00; officer, Stay obtained from Chennai High Court

Service Tax Service Tax 7.38 2006-07; CESTAT

Service Tax Service Tax 13.38 2003-04; Additional Penalties 2004-05; Commissioner of Central Excise (Appeals)

Service Tax Service Tax 1.36 2009-10 Commissioner

Income Tax Income Tax 1418.00 1992 to Commissioner Act, 1961 2009

10. In our opinion, the accumulated losses of the company are not more than fifty percent of its net worth. The company has incurred cash losses during the financial year covered by our audit and there were no cash loss 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 financial institutions or banks.

12. According to the information and explanations given to us and based on the documents and records produced to us, the company has not granted loans & advances on the basis of security by way of pledge of shares, debentures and other securities.

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

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

15. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the company, for loans taken by others from banks or financial institutions during the year, are not prejudicial to the interest of the company.

16. In our opinion, the term loans have been applied for the purpose for which the loans were raised.

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

18. According to the information and explanations given to us, the company has made preferential allotment of shares to parties and companies 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. According to the information and explanations given to us, no debentures have been issued by the company during the year.

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

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices 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 Haribhakti & Co., For K S G Subramanyam & Co., Chartered Accountants Chartered Accountants Firm Reg.No.: 103523W Firm Reg.No.: 004151S

C S Sathyanarayanan K Baskaran Partner Partner M.No.; 028328 M.No.: 022883

Place : Coimbatore Date : 30th May 2012


Mar 31, 2011

We have audited the attached Balance Sheet of Precot Meridian Limited as at March 31, 2011 and also 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

Further to our comments in the paragraph 3 above, we report that:

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

2) 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;

3) The Balance Sheet and the Profit and Loss Account and cash flow statement dealt with by this report are in agreement with the books of account;

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

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

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

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

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

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

Annexure to Auditors' Report

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

b. The assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion is reasonable having regard to the size of the company and the nature of its business. The frequency of verification is reasonable and the discrepancies noticed on such physical verification were not material and have been properly dealt with in the books of account.

c. In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the company during the year.

2. a. The inventory has been physically verified by

the management during the year. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

3. a. As informed, the Company has not, during the

year, granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii)(b),(c) and (d) of the order are not applicable.

b. As informed, the Company has not, during the year, taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii)(f)and (g) of the order are not applicable.

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

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 Companies Act, 1956 that need to be entered into the register maintained under section 301 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 exceeding value of Rupees five lakhs have been entered into during the

financial year 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 Sections 58A and 58AA of the Act and the rules framed there under.

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

8. We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

9. a. The Company is regular in depositing with

appropriate authorities 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 material statutory dues applicable to it.Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

b. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

c. According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of Nature of Amount of Amount Period Forum where the Statute the dues demand paid to which dispute is (Rs. in lakhs) (Rs. in lakhs) the amount pending relates

Central Excise Excise Duty and 115.90 30.00 2001-2002 Madras High Court Act. 1944 Penalties

Central Excise Excise Duty and 432.74 - 2000-01 to Supreme Court Act, 1944 Penalties 2001-02

Central Excise Excise Duty and 5.58 - 2006-09 to Madras High court Act. 1944 Penalties 2009-10

Central Excise Excise Duty and 16.64 - 2007-08 to Commissioner appeals, Act. 1944 Penalties 2008-09 Kochi

Central Excise Excise Duty and 0.70 - 2007-08 to Commissioner appeals, Act, 1944 Penalties 2008-09 Kochi

Central Excise Excise Duty and 29.78 - 2000-01 to CESTAT, Bangalore Act. 1944 Penalties 2002-03

Central Excise Excise Duty and 6.52 - 2008-09 Commissioner appeals, Act, 1944 Penalties Kochi

Service Tax Service Tax and 13,38 - 2003-04 and Additional Commissioner of Penalties 2004-05 Central Excise (Appeals) Service Tax Service Tax 1.36 - 2009-10 Commissioner

Service Tax Service Tax 7.38 7.38 2006-07 CESTAT

Service Tax Service Tax 4.04 - 1997-98 Commissioner appeals, Kochi

Central Sales Central Sales Tax 20.00 - 2002-03 to Kerala High Court Tax, 1956 2003-04

Central Sales Central Sales Tax 648.18 - 1998-99 to Assessing Officer, Stay

Tax, 1956 1999-00 obtained from Chennai High Court

Tamil Nadu Sales tax 12,61 12.61 1994-95 to Madras High court General Sales 1998-99 tax 1959

AP VAT 2005 Sales Tax 24.73 24.73 1999-00 to AP Sales Tax Appellate 2004-05 Tribunal

10. The company does not have any accumulated losses as at 31.03.2011. The company has not incurred cash losses during the financial year covered by our audit 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 bank.

12. According to the information and explanations given to us and based on the documents and records produced 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. In our opinion, the company is not a chit fund or nidhi or mutual benefit fund/ society and hence the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the company.

14. The company is not dealing in or trading in shares, securities, debentures and other investments and hence the provisions of clause

4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

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

16. In our opinion, the term loans have been applied for the purpose for which the loans were raised.

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

18. According to the information and explanation given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, no debentures have been issued by the company during the year.

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

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices 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 Haribhakti &Co., For K S G Subramanyam & Co.,

Chartered Accountants Chartered Accountants

Firm Reg.No.: 103523W Firm Reg.No.: 004151S

C S Sathyanarayanan K Baskaran

Partner Partner

M.No. : 028328 M.No.: 022883

Place : Coimbatore

Date : 27th May 2011


Mar 31, 2010

We have audited the attached Balance Sheet of Precot Meridian Limited, Coimbatore, as at 31a March, 2010 and also the Profit and Loss Account for the year ended on that date annexed thereto and the cash flow statement for the period ended on that date. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. These 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 the management, as well as evaluating the over all financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order. Further to our comments in the Annexure referred to above, we report that:

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

2. 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.

3. The Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account.

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

5. On the basis of the written representation received from the Directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of Clause (g) of Sub- section (1) of Section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information, and according to the explanations given to us, the said financial statements, read together with the attached schedules, Significant accounting policies and notes forming part of accounts, give the information required by the Companies Act, 1956, in the manner so required and present 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 2010,

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

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

Annexure to Auditors Report 1. a. The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

b. The assets have been physically verified by the management in accordance with a phased programme of verification which in our opinion is reasonable having regard to the size of the company and the nature of its business. The frequency of verification is reasonable and the discrepancies noticed on such physical verification were not material and have been properly dealt with in the books of account.

c. The company has not disposed off a substantial part of its fixed assets during the year and the going concern assumption of the company is not affected.

2. a. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

b. The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c. The company has maintained proper records of inventory and the discrepancies noticed on physical verification as compared to book records were not material and have been appropriately dealt with in the books of account.

3. a. The company has not, during the year, taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act.

b. The company has not, during the year, granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act. In respect of loans already granted by the company the terms and conditions are not prejudicial to the interest of the company.

4 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. During the course of our audit, we have not observed any major weaknesses in internal control system.

5. a. The particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 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 u/s 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not taken or renewed any deposits from the public during the year.

7. The company has an internal audit system commensurate with its size and the nature of its business.

8. We have broadly reviewed the books of account maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records u/s 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. a. The company is regular in depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Service Tax, Custom Duty, Excise Duty, cess and any other statutory dues applicable to it. According to the information and the explanations given to us, no undisputed amounts payable in respect of the above statutory dues were in arrears, as at 31.03.2010, for a period of more than six months from the date they became payable.

b. The details of disputed statutory dues are given below:

Name of Nature of Amount of

the Statute the dues demand

(Rs, in lakhs)

Central Excise Excise Duty 115.90

Act, 1944 and Penalties

Central Excise Excise Duty 432.74

Act, 1944 and Penalties

Central Excise Excise Duty 6.24

Act, 1944 and Penalties

Central Excise Excise Duty 29.78

Act, 1944 and Penalties

Central Excise Excise Duty 4.00

Act, 1944 and Penalties

Service Tax Service Tax 13.38

and Penalties

Service Tax Service Tax 1.36

Central Sales Central Sales 15.36

Tax, 1956 Tax

Central Sales Central Sales 648.18

Tax, 1956 Tax

Name of Amount Period Forum where

the Statute paid to which dispute is

(Rs in lakhs) the amount pending

relates

Central Excise 30.00 2001-2002 High Court Act,1944

Central Excise - 2000-01 to Supreme Court Act,1944 2001-02

Central Excise - 2003-04 Central Excise Act,1944 and Service tax

Appellate Tribunal

Central Excise - 2008-09 Central Excise and Act,1944 Service tax

Appellate Tribunal

Central Excise - 2008-09 Deputy Commissioner of Act,1944 to 2009-10 Central Excise

(Appeals)

Service Tax - 2003-04 to Additional

Commissioner of

2004-05 Central Excise

(Appeals)

Service Tax - 2009-10 Commissioner

Central Sales - 2002-03 Commissioner. Tax,1956 Interim to 2003-04 Stay obtained from Kerala High Court

Central Sales - 1998-99 to Stay obtained from Tax,1956

1999-00 Chennai High Court

10. The company does not have any accumulated losses as at 31.03.2010. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. The company has not defaulted in repayment of dues to financial Institutionsor banks.

12. 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 nidhi or mutual benefit fund/ society and hence the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

14. The company is not dealing in or trading in shares, securities, debentures and other investments and hence the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

15. The Company has not given guarantees for loans taken by others from Banks or Financial Institutions.

16. The company has applied the term loans for the purposes for which they were raised.

17. According to the information and the explanations given to us and on an overall examination of the source and application of the funds of the company, we report that no funds raised on short- term basis have been used for long- term investments by the company.

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

19. The company has not issued any debentures.

20. During the year, the company has not raised monies by public issue.

21. According to the information and the explanations given to us and the books and records examined by us, there are no frauds on or by the company that has been noticed or reported during the year.

For Suri & Co., For K S G Subramanyam & Co.,

Chartered Accountants Chartered Accountants

Reg.No:004283S Reg.No:004151S

C.S.Sathyanarayanan K.Baskaran

Partner M.NO: 028328 Partner M.NO: 022883

Place : Coimbatore.

Date : 29.05.2010

 
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