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Auditor Report of Punjab Alkalies & Chemicals Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of PUNJAB ALKALIES & CHEMICALS LIMITED, which comprise the Balance Sheet as at 31s' March, 2015, and the Profit and Loss Statement 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:

2. 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 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) Rule 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 and accounting policies; making judgment 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 viewand are free from material misstatement, whether due to fraud or error.

Auditors 'Responsibility:

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

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

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

Opinion:

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

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 st March, 2015;

(b) In the case of the Profit and Loss Statement, of the loss forthe 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. Emphasis of Matter

7. We draw attention to the Note No. 1 (a) on the aforesaid financial statements, which, inter-alia, reads as under:

The financial statements are prepared under the historical cost convention and on the basis of going concern. Accumulated losses have resulted in erosion of net worth of the Company. The financial statements have been prepared on a going concern basis on the strength of continued support of the promoters, financial institutions and banks. The final installment of OTS amount under the OTS scheme had fallen due on 1st April, 2015. The Company informed the IDBI Bank Limited, the lead bank, that the Board of Directors of PSIDC, the promoters had approved the conversion of entire balance debt of Rs.4286 lacs into equity shares at a share price as per SEBI formula applicable on the date of freezing/accepting the proposal on certain terms and conditions. The matter was discussed in the Joint Lenders Meeting held on 13th April, 2015. The Lenders agreed to take up the proposal with their respective sanctioning authorities. The Company is optimistic of a favorable decision in the matter. The Board of Directors, considering the future plan for operations and support of the promoters, lenders, business associates and workmen is hopeful of improved profitability leading to improvement in its financial position.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements:

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

9. 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 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 it appears from our examination of these books;

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

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

(e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors of the Company is disqualified as on 31s' March, 2015 from being appointed as a Director in terms of Section 164(2) of the Act; and

(f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements wherever applicable-Refer Note Nos. 20, 30 and 32 to the financial

ii) InfcTrntany is not required to make provisions as at 31 - March, 2015 under the applicable law or accounting standards for material foreseeable losses, on long term contracts including derivative contracts.

iii) There has been no amount required to be transferred to the Investors Education and Protection Fund by the company during the year ended 31st March, 2015.

Annexure referred to in Paragraph (8) of The Auditor's Report of even date to the Members of PU NJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31stMarch, 2015.

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

b) The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory has been physically verified by the management during /at the year- end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

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

c) In our opinion and according to the information and explanations given to us the Company is maintaining proper records of its inventories and no material discrepancies were noticed on such verification.

(iii) The Company has not granted any loans, secured or unsecured to Companies, Firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013.

(iv) In our opinion, and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of Inventories, Fixed Assets and for the Sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The Company has not accepted any deposits from the public during the year within the meaning of Section 73 and 74 of the Act and the Rules framed there-under.

(vi) We have broadly reviewed the books of account as required to be maintained by the Company under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained. However, we are not required to and have not carried out detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

(vii) a) According to the information and explanation to us and on the basis of our examination of the records of the company, amount deducted/ accrued in the books of account in respect of undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess and other material statutory dues have been regularly deposited with the appropriate authorities during the year by the company. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end of the Financial year.

b) Following dues are not deposited on account of disputes pending at various forums:

Name of Nature of Amount Period to Forum Where the Statue Dues (Rs. In lacs) which amount dispute is pending relates

Central Excise Duty 60.17 2004-2008 CESTAT Excise and Penalty Act,1944

Central Excise Duty 5.36 April, 2007 CESTAT Excise and Penalty to November, 2011 Act, 1944

Finance Service Tax 8.03 December, Commissioner Act, 1994 2012 to June, 2013 (Appeals), Central Excise, Chandigarh

Central Excise Duty 5.49 2004-05 to CESTAT Excise and Penalty March, 2008 Act, 1944 and for April, 2008 toJune,2008

Central Excise Duty 0.57 April, 2008 CESTAT Excise and Penalty to December, 2011 Act, 1944

Central Excise Duty 3.11 January, 2012 CESTAT Excise and Penalty to November, 2012 Act, 1944

Central Excise Duty 2.66 July, 2011 to CESTAT Excise December, 2011 Act, 1944

Central Penalty 0.99 April, 2009 to CESTAT Excise March, 2010 Act, 1944

Central Excise Duty 5.47 January, 2012 to Assistant Excise and Penalty November, 2012 Commissioner, Act, 1944 Central Excise, Ropar

Finance Service Tax 4.66 April, 2011 to CESTAT Act, 1994 and Penalty December,2011

Finance Service Tax 116.09 February, 2007 CESTAT Act, 1994 and Penalty to March,2011

Finance Service Tax 25.79 January, 2012 CESTAT Act, 1994 and Penalty to November,2012

Finance Service Tax 19.90 January, 2014 to CESTAT Act, 1994 and Penalty June,2014

Finance Service Tax 19.62 July, 2013 to Commissioner Act, 1994 and Penalty December, 2013 (Appeals), Central Excise, Chandigarh

Central Excise Duty 0.28 March, 2014 Superinten- dent, Naya Excise and Penalty Nangal Act, 1944

Central Excise Duty 2.57 January, 2014 Deputy Excise and Penalty to June, 2014 Commissioner, Act, 1944 Central Excise, Ropar

Finance Service Tax 1.88 January, 2014 to Superinten dent, Naya Act, 1994 and Penalty June, 2014 Nangal

Central Excise Duty 7.08 1994-95 Assistant Excise Commissioner, Act, 1944 Central Excise, Ropar

Central Excise Duty 3.82 1995-96 Assistant Excise Commissioner, Act, 1944 Central Excise, Ropar

Central Excise Duty 6.37 1996-97 Assistant Excise Commissioner, Act, 1944 Central Excise, Ropar

c) There has been no amount required to be transferred to the Investors Education and Protection Fund by the company during the year ended 31s' March, 2015.

(viii) The Company has accumulated losses of Rs. 5950.59 lacs at the end of the financial year. Consequently the Net Worth of the company is fully eroded. The Company has incurred cash losses of Rs.519.22 lacs in the current financial year. However, the Company had not incurred cash losses during the preceding financial year.

(ix) The Company has not defaulted in repayment of dues to banks during the year.

(x) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions by any other Company.

(xi) The Company has not taken any Term Loans during the year.

(xii) As per information and explanation given to us, no fraud on or by the Company has been noticed during the year.

For A.K. SOOD & ASSOCIATES For STAN DON & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No. 000072N Firm Registration No. 006388N

Sd/- Sd/-

(GAURAVSOOD) (H.S. KHURANA)

Place: Chandigarh Partner Partner

Date : May 26, 2015 Membership No. 507583 Membership No. 86331


Mar 31, 2014

1. We have audited the accompanying financial statements of PUNJAB ALKALIES & CHEMICALS LIMITED, which comprise the Balance Sheet as at 31st March, 2014, and the Profit and Loss Statement 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:

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with General Circular No. 8/2014 dated 4th April, 2014 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal controls 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:

3. 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.

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

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

Opinion:

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

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

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

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

Report on Other Legal and Regulatory Requirements:

7 As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the 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.

8. As required by section 227(3) ofthe Act, we reportthat:

(a) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of ouraudit;

(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 these books;

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

(d) In our opinion, the Balance Sheet, the Profit and Loss Statement and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act read with General Circular No. 8/2014 dated 4th April, 2014 issued by the Ministry of Corporate Affairs;

(e) Onthe basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors of the Company is disqualified as on 31st March, 2014 from being appointed as a Director in terms of clause(g)of sub-section (1) of Section 274 (1) (g)ofthe Act;

(f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT Statement referred to in Paragraph (7) of our Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31st March, 2014.

We report that

(i) a) The Company is maintaining proper records to show full particulars including the quantitative details of Fixed Assets.

b) As explained to us, the management has physically verified the major fixed assets of the Company in a phased manner, designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c) As per the information and explanations given to us no substantial part of the fixed assets have been disposed off during the year, which affect the ability of the Company to continue as a going concern.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory has been

physically verified by the management during /at the year- end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

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

c) In our opinion and according to the information and explanations given to us the Company is maintaining proper records of its inventories.

(iii) The Company has not taken or granted any loans, secured or unsecured from Companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of Inventories, Fixed Assets and for the Sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions, which are required to be entered in the register maintained in pursuance of Section 301 ofthe Companies Act, 1956.

(vi) As per the information and explanations given to us, the Company has not accepted the public deposits within the meaning of Section 58A and accordingly the directives issued by the Reserve Bank of India and provisions of Section 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable.

(vii) In our opinion, the Company has an adequate Internal Audit System, commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account as required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained. However, we are not required to and have not carried out detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

(ix) a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund,

Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with the appropriate authorities during the year. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end ofthe Financial year.

b) Disputed Excise Duty/Service Tax amounting to Rs.264.48 Lacs has not been deposited, out of which Rs.708 Lacs, Rs.3.82 Lacs, Rs.6.37 Lacs and Rs.247.21 lacs pertains to years 1994-95, 1995-96, 1996-97 and 2004-05 to 2013-14 respectively, since the matters are pending with the Excise Appellate Authorities.

(x) The Company has accumulated losses of Rs. 4639.62 Lacs as on 31st March, 2014 and has not incurred cash losses during the currentand preceding financial year.

(xi) In view of the approval by the CDR Empowered Group of the Company''s Proposal for One Time Settlement (Refer to Note No. 4.3 on the Financial Statements) and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks.

(xii) The Company has not granted any loans and advances on the basis ofthe security by way of pledge of Shares, Debentures and other Securities.

(xv) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions by any other Company.

(xvi) The Company has not received any Term Loans and has not issued any Debentures during the year.

(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on shortterm basis have, prima-facie, not been used during the year for long term investment and vice-versa, other than temporary deployment pending application.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

(xxii) In our opinion and according to the information and explanations given to us, the nature of the Company''s business/activities during the year are such that clauses xiii, xiv, xviii, xix and xx of CARO are not applicable to the Company.

For A.K. SOOD & ASSOCIATES For S.TANDON & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No. 000072N Firm Registration No. 006388N

Sd/- Sd/- (GAURAV SOOD) (H.S. KHURANA) Partner Partner Membership No. 507583 Membership No. 86331

Place: Chandigarh

Date : May 29, 2014


Mar 31, 2013

Report on the Financial Statements:

1. We have audited the accompanying financial statements of PUNJAB ALKALIES & CHEMICALS LIMITED, which comprise the Balance Sheet as at 31st March, 2013, and the Profit and Loss Account 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 FinancialStatements:

2. The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal controls 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:

3. 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.

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

5. Webelieve that the audit evidencewe have obtainedissufficient and appropriate to providea basis for our audit opinion.

Opinion:

6. 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) Inthe caseof the Balance Sheet,ofthestateof affairsof the Company as at31st March, 2013;

(b) Inthe caseofthe Profit and Loss Account,ofthe Profitofthe Company for the year ended onthat date; and

(c) Inthe caseof the Cash Flow Statement,ofthe Cash Flowsofthe Company for the year endedon that date.

ReportonOther Legal and Regulatory Requirements:

7. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the 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 specifiedin paragraphs 4and5of the Order.

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

(a) We have obtained all the information and explanations, which tothe bestof our knowledge and belief were necessary for the purposeof our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company, sofar as appears from our examinationofthese books;

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

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

(e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, none of the Directors of the Company is disqualified as on 31st March, 2013 from being appointedasa Director interms ofclause(g)of sub-section (1)ofSection 274 of the Act;

(f) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURETOTHEINDEPENDENTAUDITORS''REPORT

Statement referred to in Paragraph (7) of our Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALSLIMITEDon the accounts for the year ended 31st March, 2013.

We report that

(i) a) The Company is maintaining proper records to show full particulars including the quantitative details of Fixed Assets.

b) As explained to us, the management has physically verified the major fixed assets of the Company in a phased manner, designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c) As per the information and explanations given to us no substantial part of the fixed assets have been disposed off during the year, which affect the abilityof the Company to continue as a going concern.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory has been physically verified by the management during /at the year- end. In our opinion and according to information and explanations given to usthe frequencyofphysical verificationisreasonable.

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

c) In our opinion and according to the information and explanations given to us the company is maintaining proper recordsof its inventories.

(iii) The Company has not taken or granted any loans, secured or unsecured from Companies, Firms or other parties listed inthe register maintained under Section 301of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases ofInventories, Fixed Assets and for the Sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions, which are required to be entered in the register maintainedin pursuanceofSection 301of the Companies Act, 1956.

(vi) As per the information and explanations given to us, the Company has not accepted the public deposits within the meaning of Section 58A and accordingly the directives issued by the Reserve Bank of India and provisions of Section 58AA of the Companies Act, 1956 and the rules framed thereunder are not applicable.

(vii) In our opinion, the Company has an adequate Internal Audit System, commensurate with its size and Nature of its business.

(viii) We have broadly reviewed the books of account as required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained. However,weare not requiredto and have not carried out detailed examinationofsuch accounts and records withaview to determining whether they are accurateor complete.

(ix) a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with the appropriate authorities during the year. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payableat the end of the Financial year.

b) Disputed Excise Duty/Service Tax amounting to Rs. 173.82 Lacs has not been deposited, outof which Rs.7.08 Lacs, Rs.3.82 Lacs, Rs.6.37 Lacs and Rs.156.55 Lacs pertains to years 1994-95, 1995-96, 1996-97 and 2004-05 to 2012-13, respectively, since the matters are pending with the Excise Appellate Authorities.

(x) The Company has accumulated losses of Rs. 3682.05 Lacs as on 31st March, 2013 and has not incurred cash losses during the current and preceding financial year.

(xi) In view of the approval by the CDR Empowered Group of the Company''s Proposal for One Time Settlement (Refer to Note No. 4.3 on the Financial Statements) and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks.

(xii) The Company has not granted any loans and advances on the basis of the security by way of pledge of Shares, Debentures and other Securities.

(xv) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions byany other Company.

(xvi) The Company has not received any Term Loans and has not issued any Debentures during the year.

(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment and vice-versa, other than temporary deployment pending application.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud onorby the Company was noticedorreported during the year.

(xxii) In our opinion and according to the information and explanations given to us, the nature of the Company''s business/activities during the year are such that clauses xiii, xiv, xviii, xix and xx of CARO are not applicabletothe Company.

For A.K. SOOD & ASSOCIATES For S.TANDON & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No. 000072N Firm Registration No. 006388N

Sd/- Sd/-

(H.S. KHURANA) (GAURAV SOOD)

Partner

Place: Chandigarh Partner

Date : May 28, 2013

Membership No. 507583 Membership No. 86331


Mar 31, 2012

1. We have audited the attached Balance Sheet of PUNJAB ALKALIES & CHEMICALS LIMITED as at 31st March, 2012, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These Financiat 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall Financial Statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in Paragraph 3 above, we report that: (i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary lor the purpose 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 these books;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, 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;

(v) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as 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 read together with the 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:

(a) In the case of the Balance Sheet, of the state of the affairs of the Company as at 31st March, 2012;

(b) In the case of the Profit and Loss Account, of the Profit of the Company 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 THE AUDITORS' REPORT

Statement referred to in paragraph (3) of our Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31st March, 2012.

(i) a) The Company is maintaining proper records to show full particulars including the quantitative details of Fixed Assets.

b) As explained to us, the management has physically verified the major fixed assets of the Company in a phased manner, designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c) As per the information and explanations given to us no substantial part of the fixed assets have been disposed off during the year, which affect the ability of the Company to continue as a going concern.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory have been physically verified by the management during /at the year-end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

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

c) In our opinion and according to the information and explanations given to us the Company is maintaining proper records of its inventories.

(iii) The Company has not taken or granted any loans, secured or unsecured from Companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of Inventories, Fixed Assets and for the Sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions, which are required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vi) As per the information and explanations given to us, the Company has not accepted the public deposits within the meaning of Section 58A and accordingly the directives issued by the Reserve Bank of India and provisions of Section 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

(vii) In our opinion, the Company has an adequate Internal Audit System, commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account as required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained, However, we are not required to and have not carried out detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

(ix) a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with the appropriate authorities during the year. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end of the Financial year.

b) Disputed Excise Duty/Service Tax amounting to Rs. 108.80 Lacs has not been deposited, out of which Rs.7.08 Lacs, Rs.3.82 Lacs, Rs.6.37 Lacs and Rs.91.53 Lacs pertains to years 1994-95, 1995-96, 1996-97 and 2004-05 to 2011-12, respectively, since the matters are pending with the Excise Appellate Authorities. As explained to us there were no disputed amounts in respect of Income Tax, Sales Tax, Custom Duty and Wealth Tax during the year.

(x) The Company had accumulated losses amounting to Rs.4402.20 Lacs as on 31.03.2011.

During the year the Company has earned profit after tax of Rs.438.73 Lacs and accordingly the accumulated losses are reduced to that extent at the end of the year. The Company has not incurred cash losses during the current financial year as against cash loss of Rs,1178,77 Lacs during the preceding financial year.

(xi) In view of the Modified Rework Proposal of the Revised Restructuring Package approved by the CDR Empowered Group (refer to Note No.4.4 on the Financial Statements) and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and Banks.

(xii) The Company has not granted any loans and advances on the basis of the security by way of pledge of Shares, Debentures and other Securities.

(xv) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions by any other Company.

(xvi) The Company has not received any Term Loans and has not issued any Debentures during the year,

(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment and vice- versa, other than temporary deployment pending application.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

(xxii) In our opinion and according to the information and explanations given to us, the nature of the Company's business/activities during the year are such that clauses xiii, xiv, xviii, xix and xx of CARO are not applicable to the Company.

For A.K, SOOD & ASSOCIATES For S. TANDON & ASSOCIATES

Chartered Accountants Chartered Accountants

Sd/- Sd/-

(GAURAV SOOD) (H.S. KHURANA)

Partner Partner

Membership No. 507583 Membership No. 86331

Place : Chandigarh

Date : May 21, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of PUNJAB ALKALIES & CHEMICALS LIMITED as at 31" March, 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.

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

3. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we annex hereto a statement on the matters specified In Paragraphs 4 and 5 of the said Order.

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

(i) 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;

(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 these books;

(iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Row 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 written representations received from the Directors 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.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the notes thereon in Schedule O, 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 the affairs of the Company as at 31st March, 2011;

(b) In the case of the Profit and Loss Account, of the Loss of the Company 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 THE AUDITORS' REPORT

Statement referred to in paragraph (3) of our Report of even date to the Shareholders of PUNJAB ALKALIES & CHEMICALS LIMITED on the accounts for the year ended 31st March, 2011.

(i) a) The Company is maintaining proper records to show full particulars including the quantitative details of Fixed Assets.

b) As explained to us, the management has physically verified the major fixed assets of the Company in a phased manner, designed to cover all assets over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of the assets. No material discrepancies were noticed on such verification.

c) As per the information and explanations given to us no substantial part of the fixed assets have been disposed off during the year, which affect the ability of the Company to continue as a going concern.

(ii) a) The stock of Finished Goods, Stores, Spare Parts and Raw Material lying in the factory have been physically verified by the management during /at the year-end. In our opinion and according to information and explanations given to us the frequency of physical verification is reasonable.

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

c) In our opinion and according to the information and explanations given to us the Company is maintaining proper records of its inventories.

(iii) The Company has not taken or granted any loans, secured or unsecured from Companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion, and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchases of Inventories, Fixed Assets and for the Sale of goods.

(v) To the best of our knowledge and belief and according to the information and explanations given to us, the Company has not entered into any transactions, which are required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956.

(vi) As per the information and explanations given to us, the Company has not accepted the public deposits within the meaning of Section 58A and accordingly the directives issued by the Reserve Bank of India and provisions of Section 58AA of the Companies Act, 1956 and the rules framed there under are not applicable.

(vii) In our opinion, the Company has an adequate Internal Audit System, commensurate with its size and nature of its business.

(viii) We have broadly reviewed the books of account as required to be maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and the records have been made and maintained. However, we are not required to and have not carried out detailed examination of such accounts and records with a view to determining whether they are accurate or complete.

(ix) a) The Company has been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty and Cess with the appropriate authorities during the year. As explained to us there were no arrears of the statutory dues for the period more than six months from the date they became payable at the end of the Financial year.

b) Disputed Excise Duty/Service Tax amounting to Rs.126.61 Lacs has not been deposited, out of which Rs.7.08 Lacs, Rs.3.82 Lacs, Rs.6.37 Lacs and Rs. 109.34 Lacs pertains to years 1994-95, 1995-96, 1996-97 and 2004-05 to 2010-11 respectively, since the matters are pending with the Excise Appellate Authorities. In case of Sales Tax, the Company has received demands of Rs.2430-66 Lacs and the Company has filed Civil Writ Petitions in the Punjab & Haryana High Court challenging the Assessment Order. The High Court has admitted the same and stayed the recovery of the said amount. As explained to us there were no disputed amounts in respect of Income Tax, Custom Duty and Wealth Tax during the year.

(x) The Company has accumulated losses of Rs. 1974.17 Lacs as on 31.03.2010. The Company has incurred Cash Loss of Rs.1178.77 Lacs as against Cash Loss of Rs. 1303.86 Lacs during the preceding financial year.

(xi) In view of the Modified Rework Proposal of the Revised Restructuring Package approved by the CDR Empowered Group (refer to Note No. 5 in Schedule O to the accounts) and according to the information and explanations given to us, the Company has not paid over due interest of Rs. 12.07 Lacs to Financial Institutions and Banks.

(xii) The Company has not granted any loans and advances on the basis of the security by way of pledge of Shares, Debentures and other Securities.

(xv) According to the information and explanations given to us the Company has not given any guarantee for loans taken from Banks and Financial Institutions by any other Company.

(xvi) The Company has not received any Term Loans and has not issued any Debentures during the year.

(xvii) According to the Cash Flow Statement and other records examined by us and the information and explanations given to us, on an overall basis, funds raised on short term basis have, prima-facie, not been used during the year for long term investment and vice- versa, other than temporary deployment pending application.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

(xxii) In our opinion and according to the information and explanations given to us, the nature of the Company's business/activities during the year are such that clauses xiii, xiv, xviii, xix and xx of CARO are not applicable to the Company.

For A.K. SOOD & ASSOCIATES For S. TANDON & ASSOCIATES Chartered Accountants Chartered Accountants

Sd/- Sd/- (SUBHASH BINDLISH) (H.S. KHURANA) Partner Partner Membership No. 81521 Membership No. 86331

Place Chandigarh Date May 26, 2011

 
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