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Auditor Report of Raj Oil Mills Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of RAJ OIL MILLS LIMITED, (the "Company"), which comprise of the Balance Sheet as at March 31, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters 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) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 true and fair view 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

b) in the case of the Statement of Profit and Loss, Loss of 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.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements:

a) In the financial statement which indicates that the Company has accumulated losses and its net worth has been fully eroded, the Company has incurred a net cash outflow during the current and previous year (s) and, the Company's current liabilities exceeded its current assets as at the balance sheet date. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note.

b) The Company is required to maintain the cost record for the manufacturing process but has not maintained the cost of material consumed on actual consumption basis, instead accounted for the difference of inventory as "presumed to be consumed " against production cost of unit produced, resultantly all the normal and abnormal losses (if any) are adjusted in the production cost.

Our opinion is not modified in respect of this matter.

Report on other Legal and Regulatory Requirements

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 appears from our examination of those books.

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

d) In our opinion, the 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) In our opinion Directors of the Company are disqualified as on 31st March 2015 from being appointed as Director in terms of clause (b) of sub-section (2) of section 164 of the Companies Act, 2013 on account of non-payment of public deposit.

f) With respect to the other matters included in the Auditor's Report and to our best of our information and according to the explanations given to us :

i. The companydid not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

ii. There are no amounts which required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to the Auditors' Report

The Annexure referred to in our Independent Auditor's report to the Members of Raj Oil Mills Limited on the financial statements for the year Ended 31st March, 2015. We report that:

(i) (a) The company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets;

(b) The Company has a program of verification of fixed assets to cover all the items in a phased manner which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us no material discrepancies were noticed on such verification

(ii) (a) Physical verification of inventory has been conducted at reasonable intervals by the management.

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

(c) On the basis of our examination of inventory records, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records, were not material enough.

(iii) In respect of loans, the Company has not granted secured and unsecured loan to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the clause 3(iii) (a) and 3(iii) (b) of the Order are not applicable.

(iv) In our opinion and according to the information and explanation given to us, the Company has adequate internal control system in place, 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 except in some cases materials are purchased for alternative source are not readily available for obtaining comparable quotations. The company needs to take appropriate steps for purchase of material.

(v) In our opinion and according to the information and explanation given to us, the company has complied with the provision of sections 73 to 76 or any other relevant provision thereof, except for the default in repayment of Principal and payment of interest there on during the year, for compliance with the 'Companies (Acceptance of Deposits) Rules,1975' with regard to the deposits accepted from the public. According to the information and explanation given to us,order has been passed by the Company Law Board or National Company Law Tribunal or any court or any other Tribunal on the company for the repayment of the said deposit along with up-to date interest in respect of complaints received on aforesaid deposits. As per information given to us company has been registered under BIFR before 31/03/2015 and already filed a petition with Registrar of Company(ROC), Company Law Board (CLB) and BIFR for repayment of Public Deposit.

(vi) Maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Companies Act, to the company , however as per information and explanation given to us, the company is in the process to compliance with the prescribed records.

(vii) (a) According to the information and explanations given to us, undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable are mentioned here under.

Name of the statute Amount outstanding for more than 6 months as on 31/03/2015 (Excluding Interest) (in Crores.)

Provident Fund 0.49

Employees State Insurance 0.04

Income Tax 16.03

T.D.S. 1.39

Professional Tax 0.11

MVAT 8.83

Service Tax 0.16

(b) According to the information and explanations given to us, the detail of statutory dues of sales tax which have not been deposited on account of dispute is as under.

Name of the Nature of Amount (in Period to Fourm statute dues Crores) which the where amount dispute relates is pending

Sales Tax Sales Tax 9.84 F.Y 05-06 and Sales Tax 08-09 Appeal

Income Tax Income Tax 225.22 F.Y 05-06 to CIT Appeal 11-12

Income Tax Income Tax 16.03 F.Y 05-06 to ITAT 11-12 (c) There are no amounts which required to be transferred to the Investor Education and Protection Fund by the Company in accordance with the relevant provision of the companies Act 2013 and rules made there under.

(viii) The accumulated losses of the company at the end of the financial year exceeds more than fifty percent of its net worth (100% networth eroded) and it has generated cash loss in current financial year and incurred cash loss in the immediately preceding financial year.

(ix) According to the records of the company examined by us and the information and explanation provided to us, the Company has defaulted in repayment of dues to financial institution, Bank or fixed deposit holders as at the balance sheet date as follows:

Sr. Particulars Principal and Interest No. (Amount in Crores)

Fund Based

1 SVC Term Loan 0.40*

2 Edelweiss Assets Reconstruction Co. Ltd. 68.07*

3 SVC (C/C) 23.29*

4 Public Deposits (inclusive of interest) 6.84

5 Inter-Corporate Deposit 0.66*

Non Fund Based

1 SICOM (Bill Discounting) 11.56*

2 SIDBI (Bill Discounting) 2.40*

3 IFCI Factors(Bill Discounting) 9.92*

* - Exclusive of Interest

(x) In our opinion, and according to the information and explanations given to us, The Company has not given any guarantee for loans taken by others from bank or financial institution during the year.

(xi) In our opinion, and according to the information and explanation given to us, The Company has not applied for any term loan.

(xii) According to information and explanations given to us there were no fraud noticed or reported by company for the year under review.

For B. M. Gattani & Co. Chartered Accountants FRN: 113536W

Sd/- B. M. Gattani Date: 30/05/2015 Proprietor Place: Mumbai. Membership No. 047066


Mar 31, 2014

1. We have audited the accompanying financial statements of RAJ OIL MILLS LIMITED, (the "Company"), which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

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 the section 211 of ''the Companies Act, 1956'' of India read with general circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Sec. 133 of the Company Act 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

3. We have conducted our audit in accordance with auditing standard generally accepted in India except with regard to under mentioned point a to d, where we have not been able to perform the audit in conformity with the relevant auditing standards on account of unavailability of audited documents and information.

a. As Regards Trade receivables & Loans & Advances aggregating of Rs. 280.38 crores have been provided for Exceptional Item and Bad Debts/Balance Written off during the year and same was already approved by the management. However, Trade receivables from a party are also adjusted against Trade Payables to other party without any contractual arrangement between such Parties.

b. In the absence of details testing of Impairment of Assets viz. Production / Refinery Plant which were completely non-operational during the period under audit, we are unable to state whether provision if any, is required to be made in this regard.

c. In consideration of prudence, of prudence, the Company has not recognized deferred tax. As per Accounting Standard 22 in financial statement in the current year, since it is not virtually certain whether the company will have the sufficient taxable income in near future against which such deferred tax liabilities can be set off. The same would be considered at appropriate time keeping in view of the availability of sufficient future taxable income against which Deferred Tax Liabilities can be realized.

d. The Company is required to maintain the cost record for the manufacturing process but has not maintained the cost of material consumed on actual consumption basis, instead accounted for the difference of Inventory as "presumed to be consumed "against production cost of unit produced, resultantly all the normal and abnormal losses (if any) are adjusted in the production cost.

4. Our responsibility is to express an opinion on these financial statements based on our audit. Except for matters mentioned in point no 3, We conducted our audit in accordance with the Standards on Auditing and other applicable authoritative pronouncements 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.

5. 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 auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

2. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the

Act (hereinafter referred to as the "Order"), 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 Order.

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

Except for matters reported earlier in this report

(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) In our Opinion Directors of the company are disqualified as on 31st March 2014 from being appointed as director in terms of clause (g) of sub-section of (1) of Section 274 of the Companies Act, 1956 on account of nonpayment of Public Deposit.

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

(e) 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 notified under the act read with general circular 15/2013 dated September 1 3, 201 3 of the Ministry of Corporate Affairs in respect of Sec. 1 33 of the Company Act, 201 3.

ANNEXURE TO AUDITORS'' REPORT

(Referred to in Paragraph 7 of our Independent Auditor'' Report of even date on the financial statements as of and for the

year ended 31st March, 2014)

We report that:

In respect of fixed assets:

(i) (a) RAJ OIL MILLS LIMITED in respect of fixed assets generally maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) As informed to us, a major portion of the fixed assets has been physically verified by the management during the year in accordance with a phased program of verification adopted by the company. In our opinion and as per the information received the frequency of verification is reasonable having regard to the size of the company & nature of its assets. As informed to us, no material discrepancies were noticed on such physical verification. However we have not received any report on physical verification of asset being conducted by the Management for the current year.

(c) No substantial part of the fixed assets has been disposed off during the year, which has a bearing on the going concern assumption.

(ii) (a) As explained to us, the inventory has been physically verified by the management during the year end. In our opinion the frequency of verification is reasonable as per accounting standards & practices.

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

(c) On the basis of our examination of inventory records, we are of the opinion that the Company is generally maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records, which were not material enough.

(iii) (a) In respect of loans, according to the information and explanations given to us, the Company has not granted any secured or unsecured loans to companies, firms or other parties covered in the register to be maintained under section 301 of the Companies Act, 1956. Accordingly clauses (iii) (a) to (d) of paragraph 4 of the Order are not applicable.

(e) The Company has taken unsecured loans, from two Parties covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year and the year-end balance of such loans aggregated to Rs. 319.17 lakhs and Rs. 304.24 lakhs, respectively. As informed to us they are interest free loans, therefore there is no interest paid or provided for on these unsecured loans during the year, and hence the clauses (iii) (f) & (iii) (g) of paragraph 4 of the said order are not applicable to the Company.

(iv) In our opinion, and according to the information and explanations given to us, except for weaknesses in internal controls for collection from debtors and in area of sales and purchased for which the Management is yet to take remedial measures, there is an adequate internal control system commensurate with the size of the Company and the nature of its business. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any other continuing failure to correct major weaknesses in the aforesaid internal control system. The internal control system however needs to be strengthened in the following areas:

(a) Obtaining periodic confirmation of balances outstanding and reconciliation and follow up there -off of amounts due from/to debtors, creditors, and balances under other account heads.

(b) Pursuant to the management information and decision in respect debts which are appearing in the books for more than 2years, It has been informed by management upon their taking decision to write off the same. In view of the facts that the same are not recoverable despite regular follow up even there is a special appointment of Chartered Accountant firm to ensure correct off. Accordingly the same has been done.

(v) (a) According to the information and explanation given to us, we are of the opinion that the Company has not entered all the transactio -ns required to be entered in the register maintained under section 301 of the Companies Act, 1 956. b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs 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.

(vi) In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions thereof, except for default in repayment of Principal and payment of interest there on during the year, for compliance with the ''Companies (Acceptance of Deposits) Rules, 1975'' with regard to the deposits accepted from the public. According to the information and explanations given to us, order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

(vii) In our opinion the Company has internal audit system commensurate with the size and nature of its business, we recommend that the internal control system needs to be further strengthened.

(viii) The Central Government of India has prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act. However, according to the information and explanation given to us, the prescribed accounts and records have not been made.

(ix) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty have not been regularly deposited with the appropriate authorities and there have been serious delays in a large number of cases.

Name of Statute Amount outstanding for more than 6 months as on 31/03/2014 (Excluding Interest) (Amount in Crores)

Provident Fund 0.52

Employees state insurance 0.05

Income Tax 16.03

T.D.S. 1.01

Professional tax 0.09

MVAT 6.58

Service Tax 0.10

Following undisputed statutory dues payable for a period of more than six month from the date they became payable as at end of the financial year are as follows:

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, wealth tax, service tax, customs duty and excise duty as 31st March 2014 which have not been deposited on account of a dispute are as follows:

Name of Statute Nature of Amount Period to which Forum where Dues (in Crores) the amount relates dispute is pending

Income Tax Income Tax 169.79 AY 05-06 to 11-12 CIT(Appeal)

Sales Tax (Inv) MVAT 38.52 F.Y. 05-06 to 12-13 Sale tax (Appeal)

(x) The accumulated losses of the Company exceeded fifty percent of its net worth as at 31st March 2014 and it has incurred cash losses of 286.11 Crores in the financial year ended on that date and 1 6.3 Crores in the immediately preceding financial year.

(xi) According to the records of the Company examined by us and the information and explanations given to us, it has defaulted in repayment of dues to financial institution, banks or fixed deposit holders as at the balance sheet date. The details of the defaults of repayment are as follows.

Sr. no. Particulars Principal and Interest (Amounts in Crores)

1 SVC Term Loan 0.39

2 SVC (C/C) 23.28

3 Edelweiss Assets Reconstruction Co. Ltd (EARC) 68.07

4 Public Deposits 4.75

5 IFCI, SICOM, SIDBI, (Bill Discounting) 26.56

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Therefore, the provisions of Clause 4(xii) of the Order are not applicable to the Company.

(xiii) As the provision of any special statue applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the company, the clause 4(xiii) order 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 4(xiv) of the order are not applicable.

(xv) In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, the provisions of Clause 4(xv) of the Order are not applicable.

(xvi) The Company has not raised any term loans. Accordingly the provisions of the clause 4(xvi) of the order are not applicable.

(xvii) The Company has not raised any loans on short term basis. Accordingly, the provisions of Clause 4(xvii) of the Order are not applicable to the Company.

(xviii) The Company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under section 301 of the Act during the year. Accordingly, the provisions of clause 4(xviii) of the order are not applicable to the company.

(xix) The Company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning of the year and at the year end. Accordingly, the provisions of Clause 4(xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of Clause 4(xx) of the Order are not applicable to the Company.

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

For B. M. Gattani & Co. Chartered Accountants FRN: 113536W

B. M. Gattani Date: 29th May, 2014 Proprietor Place: Mumbai Membership No. 047066


Mar 31, 2013

1. We have audited the attached Balance Sheet of RAJ OIL MILLS LIMITED as at 31st March 2013 and also the Statement of Profit & 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 have 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. The audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation for correctness and observation of standards. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order 2003, as amended by the Companies (Auditors Report) (Amendment) order, 2004, issued by the Central Government in terms of Section 227(4A) 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.

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

a) We have obtained all the information and explanations, checked the required books of accounts, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion the company has kept proper books of Accounts as required by law so far, as appears from our examination of such books.

c) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with this report are in agreement with the Books of Account.

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

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

f) In our opinion and to the best of our information and according to the explanations given to us the said Balance Sheet and Profit & Loss account read together with the Notes thereon give a true & fair view: except balance:

i) In the case of Balance Sheet of the state of affairs of the company as at 31st March, 2013 and ii) In the case of Statement of Profit & Loss, of the Loss for the year ended on that date. iii) In the case of Cash Flow Statement, of the Cash Flow 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 RAJ OIL MILLS LIMITED on the financial statements for the year ended 31/03/2013]

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

b. As explained to us, all the Fixed Assets of the Company have been physically verified by the Management during the year and no material discrepancies between thebook records and the physical inventory have been noticed. In our opinion, the maintained books and the frequency of verification is reasonable.

c. In our opinion and according to the information and explanations given to us, theCompany has not disposed of substantial part of Fixed Assets during the year.

ii. a. As explained to us, the inventory of the Company has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable as per accounting standards & practices.

b. In our opinion, and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. They are in line with the practice followed by the oil industry.

c. In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and significant.

iii. a. The company has not granted loans, secured or unsecured, to any parties covered in theregister maintained under Section 301 of the Act during the year.

In our opinion and according to the information and explanation given to us, the rate of interest, where applicable and other terms and condition, are not prima facie prejudicial to the interest of the company.As there is no interest paid or provided on unsecured loans clauses (iii)(b),(iii)(c ) &(iii)(d) of paragraph 4 of the said Order are not applicable to the Company.

b. As informed to us, the Company has taken unsecured loans of Rs.0.91 Crores

(Previous Year Rs. 10.42Crores) from Directors of the company. As there is no interest paid or provided on unsecured loans clauses (iii)(f), &(iii)(g) of paragraph 4 of the said Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there are adequate internal control systemscommensurate with the size of the Company and the nature of its businessexcept with regard to purchase of inventory.

v. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956 :

a. In our opinion and according to the information and explanations providedby the management, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the companies Act, 1956 have been entered in the register required to be maintained under that section and are in order.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance of Section 301 of the Act, and exceeding the value of Rupees Five Lakhs 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.

vi. Thecompany has not accepted during the year any deposits from the public under the provision of Section 58A and 58AA or any relevant provision of the companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

vii. In our opinion, an internal audit functions carried out during the year by firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

viii. We have been informed that the Company is maintaining Cost records as prescribed by the Central Government under clause (d) of sub-section (1) of Section 209 of the Act.

ix. a. According to the information and explanations given to us and as per the records of the Company examined by us, in our opinion, the Company is regularin depositing the undisputed statutory dues including provident fund, employees’ state insurance, income-tax and other material statutory dues as applicable with the appropriate authorities except the following undisputed statutory dues payable for a period of more than six months from the date they became payable as at end of the financial year are as follows.:

b. According to the information and explanations given to us and the records of the Company examined by us, following are dues of sales tax, income tax, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute.

x. the company has not any accumulated losses at the end of the financial year, however company hasincurred cash losses during the immediately preceding financial year and in the current financial year.

xi. According to the records of the Company examined by us and the information and explanation given to us, the Company has defaulted in repayment of dues to the following loans fromFinancial Institution/ Banks/public deposits as at the balance sheet date. The details of the defaults of repayment is as follows :

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

xiii. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

xiv. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments. Accordingly the provision of clause 14 of the Companies (Auditor’s Report) order, 2003 are not applicable to the company.

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

xvi. To the best of our knowledge and belief and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

xvii.On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on the short-term basis, which have been used for long-term investment.

xviii.The Company has not made any preferential allotment of equity shares to parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

xix. According to the information and explanations given to us, the Company has not issued any debentures during the year hence provision of clause 19 of paragraph 4 of the said order are not applicable to the company.

xx. According to the information and explanations given to us, the Company has raised Rs. 43.40 Crores by way of GDR issues during the financial year. The management has disclosed the end use of money raised by GDR issue (Refer point no. 7 of note 25 (II) )and the same has been verified by us.

xxi. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year nor we have been informed of such case by the management, that causes the financial statements to be materially misstated.

For B. M.Gattani& Co.,

Chartered Accountants

Firm Reg. No. 113536W

B. M. Gattani

Place: Mumbai Proprietor

Dated: 29th May, 2013 M. No. 047066


Mar 31, 2012

1. We have audited the attached Balance Sheet of RAJ OIL MILLS LIMITED as at 31st March 2012 and also the Profit & 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 have 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. The audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. The audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation for correctness and observation of standards. We believe that our audit provides a reasonable basisforouropinion.

3. As required by the Companies (Auditors Report) Order 2003, as amended by the Companies (Auditors Report) (Amendment) order, 2004, issued by the Central Government in terms of Section 227(4A) 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.

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

a) We have obtained all the information and explanations, checked the required books of accounts, which to the best of our knowledge and belief were necessary for the purpose of our audit.

b) In our opinion the company has kept proper books of Accounts as required by law so far, as appears from our examination of such books.

c) The Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with this report are in agreement with the Books of Account.

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

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

f) In our opinion and to the best of our information and according to the explanations given to us the said Balance Sheet and Profit & Loss account read together with the Notes thereon give a true & fair view:

i) In the case of Balance Sheet of the state of affairs of the company as at 31st March, 2012 and

ii) In the case of Profit & Loss Account, of the Loss for the year ended on that date.

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

[Referred to in paragraph 3 of the Auditors' Report of even date to the members of RAJ OIL MILLS LIMITED on the financial statements for the year ended 31/03/2012]

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

b. As explained to us, all 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 maintained books and the frequency of verification is reasonable.

c. In our opinion and according to the information and explanations given to us, the Company has not disposed of substantial part of Fixed Assets during the year.

2. a. As explained to us, the inventory of the Company has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable as per accounting standards & practices.

b. In our opinion, and according to the information and explanation given to us, the procedures of physical verification of inventory followed by the Management are reasonable and adequate in relation to the size of the Company and the nature of its business. They are in line with the practice followed by the edible oil industry.

c. In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and significant.

3. a. As informed to us, 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. As the Company has not granted any loans, clauses (3)(b), (3)(c), (3)(d) of paragraph 4 of the said Order are not applicable to the Company.

b. As informed to us, the Company has taken unsecured loans of Rs.10.42 Crores (Previous Year Rs. 6.89 Crores) from Directors of the company. As there is no interest paid or provided on unsecured loans clauses (iv)(f), &(iv)(g) of paragraph 4 of the said Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business except with regard to purchase of inventory.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 of the companies Act, 1956 have been entered in the register required to be maintained under that section and are in order.

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance of Section 301 of the Act, and exceeding the value of Rupees Five Lakhs 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 accepted deposits from the public under the provision of Section 58Aand 58AAor any relevant provision of the companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

7. In our opinion, an internal audit functions carried out during the year by firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and the nature of its business.

8. We have been informed that the Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

9. a. According to the information and explanations given to us and as per the records of the Company examined by us, in our opinion, the Company is regularin depositing the undisputed statutory dues including provident fund, employees' state insurance, income-tax and other material statutory dues as applicable with the appropriate authorities except the following undisputed statutory dues payable for a period of more than six months from the date they became payable as at end of the financial year are as follows.:

(Amount in Crores)

Particulars Amount outstanding as on 31/03/2012

Provident Fund 0.40

Employees State Insurance 0.02

TDS 0.69

Professional Tax 0.05

MVAT 5.08

APMC Tax 0.02

Subsequently the company has deposited the arrears of all statutory dues in respect of Provident Fund, Employee State Insurance, and Tax Deducted at Source, Professional Tax, and APMC Tax as on the date of Audit Report.

b. According to the information and explanations given to us and the records of the Company examined by us, following are dues of sales tax, income tax, wealth tax, service tax, excise duty and cess, which have not been deposited on account of any dispute.

(Amount in Crores)

Name of Statute Pending to Amount demanded

IncomeTax CIT(A) 1.27

IncomeTax ITAT 0.35

Sales Tax Sales Tax(lnvst.) 1.52

10. The Company has neither accumulated losses nor had any cash losses in the immediately preceding financial year. However the company has incurred cash losses during the current financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues except the following loans from Financial Institution/Banks/public deposits as at the balance sheet date. The details of the defaults of repayment is as follows:

(Amount in Crores

Particulars Amount(Principal lnterest)

1. SVC Term Loan 0.38

2. City Home Loan(Total) 0.03

3. SVC (C/C) 2.11

4. KVB (C/C) 2.13

5. Public Deposits 0.75

6. IFCI, SICOM, SIDBI (Bill Discounting) 26.71

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

13. The provisions of any special statute applicable to chit fund / nidhi / mutual benefit fund / societies are not applicable to the Company.

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments. Accordingly the provision of clause 14 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 any guarantee for loans taken by others from banks or financial institutions during the year.

16. To the best of our knowledge and belief and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on the short-term basis, which have been used for long-term investment.

18. The Company has not made any preferential allotment of equity shares to parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956 during the year.

19. According to the information and explanations given to us, the Company has not issued any debentures during the year hence provision of clause 19 of paragraph 4 of the said order are not applicable to the company.

20. According to the information and explanations given to us, the Company has not raised any money by way of public issues during the financial year.

21. In our opinion and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year nor we have been informed of such case by the management, that causes the financial statements to be materially misstated.

For Agarwal Desai & Shah. Chartered Accountants Firm Reg. No. 124850W Rishi Shekhari Partner M. No. 126656

Place: Mumbai Dated: 21st August, 2012












Mar 31, 2010

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

2. We have conducted our audit in accordance with the auditing standards generally acceptable 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 overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

3. As required by the Companies (Auditors 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), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to 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 those 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 Act, subject to non disclosure of details as defined in the Accounting Standard 15(Refer Note No. 14 of Schedule 23).

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Act, in the manner so required and give 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 the Cash Flow Statement, of the Cash Flow for the year ended on that date.

Annexure to the Auditors Report Re: Raj Oil Mills Limited (Referred to in para 3 of our report of even date)

(i) (a) The company has maintained records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, all the fixed assets of the company have been physically verified by the management during the year, which in our opinion, is reasonable having regard to the size of the company and nature of its fixed assets. No material discrepancies were noticed on such verification.

(c) As explained to us, the company has not disposed off any substantial part of fixed assets during the year, so as to affect the going concern.

(ii) (a) As explained to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and 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 inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) As informed to us, 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. Hence the sub-clauses (b), (c) and (d) are not applicable.

(b) As informed to us, the company has taken unsecured loan of Rs.163 Lakhs from Director, Mr. Shaukat S. Tharadra. As there is no interest paid or provided on unsecured loan clauses (f) and (g) are not applicable.

(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 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 major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement 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 under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted any deposits from the public under the provisions of sections 58A and 58AA or any relevant provisions of the Companies Act, 1956 and the Companies (Acceptance and Deposits) Rules, 1975.

(vii) In our opinion, the company have an internal audit system commensurate with the nature of business

(viii) According to the information given to us, Central Government has not prescribed the maintenance of cost records under section 209 (1) (d) of the Act, in case of the Company.

(ix) (a) As per information and explanations given to us, the company has generally been regular during the year in depositing undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, excise duty, cess and other material statutory dues applicable with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, service tax, excise duty and cess were in outstanding as at 31st March 2010, for a period of more than six months from the date they became payable.

(c) According the information and explanation given to us, the disputed Income Tax penalty aggregating to Rs. 34.72 Lakhs, that have not been deposited on account of Appeal pending before Commissioner of Income Tax (Appeals) for A.Y. 2008-09.

(x) The Company does not have accumulated losses at the end of the year, nor incurred cash losses during the current and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayments of dues to financial institution or banks or debenture.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the said order is not applicable.

(xiii) In our opinion, the company is not a Chit fund or a Nidhi, Mutual benefit fund/ Society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 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 provision of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) In our opinion and according to the information and explanations given to us, Company has not given guarantee for loans taken by others from a bank of financial institution.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the term loans have been applied for the purpose for which they 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 report that, prima facie, no funds raised on short-term basis have been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made allotment of equity shares on preferential basis to persons including persons covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debenture and hence provisions of clause (xix) of paragraph 4 of the said Order are not applicable to the Company.

(xx) According to the information and explanation given to us, the company has raised Rs. 11400 Lakhs by way of public issue during the financial year. The management has disclosed the end use of money raised by public issue (Refer note No.10 Schedule 23) and the same has been verified by us.

(xxi) To the best of our knowledge and belief and as per the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year nor we have been informed of such case by the management.



For M. K. Gohel & Associates Chartered Accountants Firm Registration No: 103256W

Mukesh K. Gohel Proprietor Membership No. 038823

Place : Mumbai Date : 3 rd September, 2010


Dec 31, 2008

1. We have audited the attached Balance Sheet of Raj Oil Mills Limited as at 31 st December 2008 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 Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We have conducted our audit in accordance with the auditing standards generally acceptable 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 overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

3. As required by the Companies (Auditors 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), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to 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 those 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 Act;

(v) On the basis of the written representations received from the directors as on 31 st December 2008 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 st December 2008 from being appointed as a director in terms of the clause (g) of sub-section (1) of section 274 of the Act;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with significant accounting policies and other notes thereon, give the information required by the Act, in the manner so required and give 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 December 2008;

(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 the Cash Flow Statement, of the Cash Flow for the year ended on that date.

Annexure to the Auditors Report (Referred to in para 3 of our report of even date)

(i) (a) The company has maintained records showing full particulars including quantitative details and situation of fixed assets. All the fixed assets of the company have been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the company and nature of its fixed assets. No material discrepancies were noticed on such verification.

(b) As explained to us, the company has not disposed off any substantial part of fixed assets during the year, so as to affect the going concern.

(ii) (a) As explained to us, the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and 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 inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) As informed to us, 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. Hence the sub-clauses (b), (c), (d), (e), (f) & (g) are not applicable

(iv) In our opinion and according to the information and explanations given to us, internal control system is inadequate commensurate with the size of the company and the nature of its business with regard to purchases 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 major weaknesses in internal controls.

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement 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 under section 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 prevailing market prices at the relevant time.

(vi) The company has not accepted any deposits from the public under the provisions of sections 58A and 58AA or any relevant provisions of the Companies Act, 1956 and the Companies (Acceptance and Deposits) Rules, 1975. No order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank" of India or any Court or any other Tribunal.

(vii) In our opinion, the company does not have an internal audit system commensurate with the nature of business.

(viii) According to the information given to us, Central Government has not prescribed the maintenance of cost records under section 209 (1) (d) of the Act, in case of the Company

(ix) (a) As per information and explanations given to us, undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to the company have generally been regularly deposited with the appropriate authorities except the following:

(i) During the previous year 2007 the Income Tax Department conducted a survey on 12th December 2007. The company has accepted the capital expenditure of Rs. 245.00 Lacs, being wrongly shown as book- debts in the books of accounts and accepted to rectify the same in the current year. The department is of the opinion that the same is unaccounted expenditure and added to the income of current year. The management is of the opinion that said addition is not likely to effect the income of the current year.

(ii) Regarding Assessment Year 2006-07, the Deputy Commissioner of Income Tax passed an Order dated 24/12/08 u/s 143(3) whereby he assessed our Income at Rs. 25,21,562 u/s 115JB as against the returned income of Rs. 21,03,958/- and raised a demand of Rs. 13,34,555/- on us. Our Company has filed an Appeal before the Honble Commissioner Of Income Tax-Appeals on January 07,2009 against the said order. The case is still pending.

(iii) Regarding Assessment Year 2005-06, the Deputy Commissioner of Income Tax passed an Order dated 26/12/07 u/s 143(3) whereby he assessed our Income at Rs. 65,39,972 u/s 115JB as against the returned income of Rs. 64,76,225 and raised a demand of Rs. 62,099/- on us. Our Company has filed an Appeal before the Honble Commissioner Of Income Tax-Appeals, against the said order. The Company before filing of the Appeal on 1 st January, 2008 paid the amount of Rs 62,099/-. The case is still pending.

(iv) For the Assessment Year 2003-04, the Deputy Commissioner of Income Tax passed Order dated 30 January, 2006 whereby it determined the total loss of our Company at Rs 1,38,07,305 against loss of Rs 2,58,63,258 declared by our Company. Our Company had filed an Appeal before the Honble Commissioner Of Income Tax-Appeals to set aside the Order. The said Appeal was decided against our Company vide Order dated 18th June, 2007 and thereafter, the company has filed appeal against the above order of the Commissioner of Income Tax (Appeals) before the Income Tax Appellate Tribunal. The case is still pending.

(v) The Deputy Commissioner of Income Tax passed Order dated 30 March, 2009, along with Demand Notice, whereby he has levied penalty order u/s 271 (1 )(c) of the Income Tax Act, 1961 for amount of Rs. 12,23,870/- for non - payment of Income Tax assessed for the Assessment Year 2003-04. Our Company had filed an Appeal before the Honble Commissioner of Income Tax (Appeals) on 8th April, 2009, to set aside the Order and grant stay against the demand recovery till the disposal of the appeal.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, service tax, customs duty, excise duty and cess were in arrears, as at 31 st December, 2008 for a period of more than six months from the date they became payable.

(c) According the information and explanation given to us, there are no dues of income tax, sales tax, wealth tax, Service tax, custom duty, excise duty and cess, which have not been deposited on account of any.

(x) The Company does not have accumulated losses at the end of the year, nor incurred cash losses during the current and the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayments of dues to the banks, except the following:

The Company has vide a Multi-Option Facility Agreement dated March 29, 2008, availed of a credit facility of INR 1,000.00 lakhs from the Barclays Bank Pic,. As per the terms of the multi-facility agreement, the Company was required to create a charge on its immovable properties, movable fixed assets and current assets within 180 days of the first disbursement of funds. Pursuant to failure of the Company to furnish such security to Barclays Bank Pic, the lender has vide a letter dated November 15th, 2008 called upon the Company to repay the outstanding amount Rs. 4.5 crores in 2 installments Rs. 2 crores by November 30th, 2008 and the balance Rs. 2.5 crores by December 31st, 2008. The said letter further stipulates that non-payment of the dues would attract penal interest at 24%p.a. The amount to be repaid as on date 31st March, 2009isRs. 150.90lacs.

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, clause 4(xii) of the said order is not applicable

(xiii) In our opinion, the company is not a Chit fund or a Nidhi, Mutual benefit fund/ Society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 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 provision of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the company.

(xv) In our opinion and according to the information and explanations given to us, the terms and condition on which the company has given guarantee for loans taken by others from a bank are not prima facie prejudicial to the interest of the company. The said guarantees have been revoked on 27th February 2009.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, the term loans have been applied for the purpose for which they 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 report that, prima facie, no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has made allotment of equity shares on preferential basis. Such preferential allotment was made to persons including persons covered in the register maintained under section 301 of the Companies Act, 1956. The price at which the said preferential allotment of equity shares has been made is not prejudicial to the interest of the company.

(xix) The Company has not issued any debentures or made any public issue during the year and accordingly clause 4(xix) and 4(xx) of the said order are not applicable to the company.

(xx) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given to us by the management, we report that no fraud on or by the company was noticed or reported during the year.

For M. K. Gohel & Associates Chartered Accountants

Mukesh K. Gohel Proprietor

Membership No. 38823 Place: Mumbai Date: 8th April 2009

 
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