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Auditor Report of Sanghi Industries Ltd.

Mar 31, 2016

To the Members of Sanghi Industries Limited Report on the Financial Statements

We have audited the accompanying financial statements of Sanghi Industries Limited (“the Company”), which comprises the Balance Sheet for nine months period ended on March 3I, 20I6, the Statement of Profit and Loss, the Cash Flow Statement for the period 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 stated in Section I34(5) of the Companies Act, 20I3 (“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 I33 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 20I4. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls and ensuring their operating effectiveness and the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 conducted our audit in accordance with the Standards on Auditing specified under Section I43(I0) 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 auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the 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, of the state of affairs of the Company as at 3Ist March, 20I6, its profit and its cash flows for the period ended on that date.

Report on Other Legal and Regulatory Requirements

(1) As required by the Companies (Auditors’ Report) Order, 20I6 (“the Order”) issued by the Central Government of India in terms of sub-section (II) of Section I43 of the Act, we give in “Annexure I”, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

(2) As required by Section I43(3) of the Act, we report that:

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

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

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

d. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section I33 of the Act read with Rule 7 of the Companies (Accounts) Rules, 20I4;

e. On the basis of written representations received from the directors as on March 3I, 20I6, and taken on record by the Board of Directors, none of the directors is disqualified as on March 3I, 20I6 from being appointed as a director in terms of Section I64 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, We give our separate Report in “Annexure 2”; and

g. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule II of the Companies (Audit and Auditors) Rules, 20I4, 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 -Refer Note 25 on Contingent Liabilities to the financial statements;

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

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

[Referred to in paragraph I under ‘Report on Other Legal and Regulatory Requirements’ in the Independent Auditor’s Report of even date to the members of Sanghi Industries Limited on the financial statements for the period ended March 3I, 20I6

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

(b) During the period, fixed assets have been physically verified by the management as per the regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties recorded as fixed assets, in the books of account of the Company, are held in the name of the Company.

(ii) The inventory has been physically verified by the management during the period. In our opinion, the frequency of verification is reasonable. As informed, no material discrepancies were noticed on physical verification carried out during the period.

(iii) As informed, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section I89 of the Act. Accordingly, paragraph 3

(iii)(a), 3 (iii)(b) and 3 (iii)(c) of the Order are not applicable to the Company.

(iv) Based on information and explanation given to us in respect of loans, investments, guarantees and securities, the Company has complied with the provisions of Section I85 and I86 of the Act.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (I) of Section I48 of the Act and the rules framed there under and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) The Company is regular in depositing with appropriate authorities, undisputed statutory dues including provident

fund, employees’ state insurance, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees’ state insurance, income tax, sales tax, service tax, value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it, were outstanding, as at March 3Ist, 20I6 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the dues outstanding with respect to, income tax, sales tax, service tax, value added tax, customs duty, excise duty on account of any dispute, are as follows:

Name of the statute

Nature of dues

Amount (Rs, in Crore)

period to which the amount relates

Forum where dispute is pending

Central Excise Act,I944

Excise Duty

62.24

Various years

Customs, Excise & Service tax Appellate Tribunal

Service Tax Act

CENVAT Credit

2I.46

Various years

Customs, Excise & Service tax Appellate Tribunal

Service Tax Act

Interest and Penalty

0.05

Various years

Customs, Excise & Service tax Appellate Tribunal

Customs Act, I962

Customs Duty

I2.4I

2005-I0

Customs, Excise & Service tax Appellate Tribunal

Sales Tax

Sales Tax

I.76

Various years

Joint Commissioner Appeal, Rajkot

Gujarat Electricity Duty Act, I958

Electricity duty on power Generation

3.30

Various years

Gujarat High Court

Bombay Land Revenue Code, I879

Land Revenue on Leasehold Land

I.I7

Various years

Gujarat High Court

(viii)According to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions and banks.

(ix) The Company has neither raised money by way of public issue offer nor has obtained any term loans. Therefore, paragraph 3(ix) of the Order is not applicable to the Company.

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

(xi) According to the information and explanations given to us, managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section I97 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Therefore, paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanation given to us, all transactions entered into by the Company with the related parties are in compliance with Sections I77 and I88 of Act, where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards.

(xiv)The Company has made private placement of Non-convertible Debentures during the period under review and in our opinion and according to the information and explanations given to us, the requirement of Section 42 of the Act have been complied with and the amount raised have been used for the purposes for which the funds were raised.

(xv) According to the information and explanations given to us, the Company has not entered into any non-cash transactions with directors or persons connected with him during the period.

(xvi)According to the information and explanation given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, I934.

ANNEXURE 2 TO THE INDEPENDENT AUDITOR’S REPORT

[Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements’ in the Independent Auditor’s Report of even date to the members of Sanghi Industries Limited on the financial statements for the period ended March 3I, 20I6]

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act")

We have audited the internal financial controls over financial reporting of Sanghi Industries Limited (“the Company”) as of March 3I, 20I6 in conjunction with our audit of the financial statements of the Company for the period ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (“ICAI”). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 20I3.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing specified under section I43(I0) of the Act to the extent applicable to an audit of internal financial controls, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (I) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 3I, 20I6, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For Ankit & Co. For Haribhakti & Co. LLP

Chartered Accountants Chartered Accountants

ICAI Firm Registration No.000I8IS ICAI Firm Registration No.I03523W

S. Brijkumar Atul Gala

Partner Partner

Membership No. I9357 Membership No. 048650

Place: Ahmedabad Place: Mumbai

May 25, 20I6 May 25, 20I6


Jun 30, 2015

We have audited the accompanying financial statements of Sanghi Industries Limited ("the Company"), which comprise the Balance Sheet as at June 30, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management,s Responsibility for the Financial Statements

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

Auditors, Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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, of the state of affairs of the Company as at June 30, 2015, its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

(d) I n 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 as on June 30, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2015 from being appointed as a director in terms of Section 164 (2) of the Act;

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 24 on Contingent Liabilities to the financial statements;

(ii) The Company did not have any long-term contracts including derivative contracts hence, the question of any material foreseeable losses does not arise;

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

ANNEXURE TO INDEPENDENT AUDITORS, REPORT

[Referred to in paragraph 1 under ,Report on Other Legal and Regulatory Requirements' in the Independent Auditors' Report of even date to the members of Sanghi Industries Limited on the financial statements for the year ended June 30, 2015]

(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 have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

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

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

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

(iii) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions stated in paragraph 3(iii)(a) and 3(iii)(b) of the Order are not applicable.

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

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the provisions of Sections 73 to 76 of the Act and the rules framed thereunder.

(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where the maintenance of cost records has been specified by the Central Government under sub-section (1) of Section 148 of the Act and the rules framed thereunder and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) Undisputed Statutory dues including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty and cess have generally been deposited with the appropriate authorities, though there have been some delays.

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

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

Name of the statute Nature of dues Amount Amount Depos- (Rs.in Cr.) ited in protest Rs. in Cr.)

Central Excise Excise Duty 75.14 43.46 Act,1944

Service Tax Act CENVAT Credit 29.40 1.51

Service Tax Act Interest and 0.05 - Penalty

Customs Act, 1962 Customs Duty 12.41 6.21

Sales Tax Sales Tax 1.76 1.76

Bombay Land Revenue Code, Land Revenue on 1.17 - 1879 Leasehold Land

The Income Tax Act, 1961 Tax 0.99 -

Name of the statute Period to Forum where dispute is which the pending amount relates

Central Excise Various years Customs, Excise & Service Act,1944 tax Appellate Tribunal

Service Tax Act Various years =

Service Tax Act Various years Customs, Excise & Service tax Appellate Tribunal

Customs Act, 1962 2005-10 Customs, Excise & Service tax Appellate Tribunal

Sales Tax Various years Joint Commissioner Appeal, Rajkot

Bombay Land Revenue Various years Gujarat High Court Code, 1879

The Income Tax Act, 2006-07 CIT (A) 1961

(c) According to the information and explanations given to us, there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

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

(ix) According to the information and explanations given to us, the Company has not defaulted in repayment of its dues to banks/financial institutions, except for delay in some cases. The Company does not have any dues to debenture holders.

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

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

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

For Ankit & Co. For Haribhakti & Co. LLp Chartered Accountants Chartered Accountants Firm Registration No.000181S Firm Registration No.103523W

S. Brijkumar Atul Gala Partner Partner Membership No. 19357 Membership No. 048650

Mumbai: August 28, 2015


Jun 30, 2014

We have audited the accompanying financial statements of Sanghi Industries Limited ("the Company"), which comprise the Balance Sheet as at June 30, 2014, 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

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

Auditors'' Responsibility

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

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

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

Opinion

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at June 30, 2014;

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

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

Report on Other Legal and Regulatory Requirements

I. As required by the Companies (Auditors'' Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

e. on the basis of written representations received from the directors as on June 30, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

[Referred to in paragraph I under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors'' Report of even date to the members of Sanghi Industries Limited on the financial statements for the year ended June 30, 2014]

(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 have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such physical verification.

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

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

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

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

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

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

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

(v) (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

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

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

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth- tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

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

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

Name of the statute Nature of dues Amount Rs. in Cr.

Central Excise Act,l944 Excise Demand 29.52

Customs Act, 1962 Customs Demand 12.41

Service Tax Act, 1944 Service Tax Demand 6.76

Electricity Act, 1994 Duty on Generation 3.30 from D G Set

Bombay Land Revenue Land Revenue on 1.17 Code, 1879 Leasehold Land

The Income Tax Act, 1961 Tax 0.99

Name of the statute Period to which the Forum where dispute amount relates is pending

Central Excise Act,l944 Various years Customs, Excise & Service tax Appellate Tribunal

Customs Act, 1962 Customs, Excise & Service tax Appellate Tribunal

Service Tax Act, 1944 Various years Customs, Excise & Service tax Appellate Tribunal

Electricity Act, 1994 Various years Gujarat High Court Bombay Land Revenue Various years Gujarat High Court Code, 1879

The Income Tax Act, 1961 2006-07 CIT (A)

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

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to a bank or financial institution as per the mutual arrangements. The Company has not borrowed any sums through debentures.

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

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

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

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

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

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

(xviii) According to the information and explanation given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 30l of the Companies Act, l956.

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

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

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

For Ankit & Co. For Haribhakti & Co. LLP Chartered Accountants Chartered Accountants Firm Registration No.000181S Firm Registration No.103523W

S.Brijkumar Prashant M. Maharishi Partner Partner Membership No. 19357 Membership No. 41452

Place: Mumbai Date: August 21, 2014


Jun 30, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Sanghi Industries Limited ("the Company")'' which comprise the Balance Sheet as at June 30'' 2013'' the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

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

(a) in the case of the Balance Sheet'' of the state of affairs of the Company as at June 30'' 2013;

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. in our opinion'' the Balance Sheet'' Statement of Profit and Loss'' and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Compan ies Act'' 1956;

e. On the basis of written representations received from the directors as on June 30'' 2013'' and taken on record by the Board of Directors'' none of the directors is disqualified as on June 30'' 2013'' from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act'' 1956.

ANNEXURE TO AUDITORS’ REPORT

[Referred to in paragraph Report on Other Legal and Regulatory Requirements of the Auditors’ Report of even date to the members of Sanghi Industries Limited on the financial statements for the year ended June 30'' 2013]

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

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

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

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

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

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

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

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

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

(v) According to the information and explanations given to us'' we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act'' 1956 that need to be entered into the register maintained under section 301 have been so entered.

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

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

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

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund'' investor education and protection fund'' employees’ state insurance'' income-tax'' sales-tax'' wealth- tax'' service tax'' customs duty'' excise duty'' cess and other material statutory dues applicable to it.

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

(x) In our opinion'' the accumulated losses of the company are not more than fifty percent of its net worth. Further'' the company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) As per the information and explanations given to us'' the Company has not defaulted in repayment of dues to banks or financial institutions during the year as per arrangements. The Company has not borrowed any sums through debentures.

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

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

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

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

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

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

(xviii) According to the information and explanation given to us'' the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act'' 1956.

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

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

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

For Ankit & Co. For Haribhakti & Co.

Chartered Accountants Chartered Accountants

Firm Registration No. 000181S Firm Registration No.103523W

S. Brij Kumar Prashant M. Maharishi

Partner Partner

Membership No.19357 Membership No.41452

Place : Mumbai

Date : August 27'' 2013


Jun 30, 2012

1. We have audited the attached Balance Sheet of Sanghi Industries Limited ('the Company') as at June 30, 2012 and also the Statement of Profit and Loss and the Cash flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, (as amended), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

v. On the basis of the written representations received from the directors, as on June 30, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on June 30, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

a) in the case of the balance sheet, of the state of affairs of the Company as at June 30, 2012;

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

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

ANNEXURE TO AUDITORS' REPORT

[Referred to in paragraph 3 of the Auditors' Report of even date to the members of Sanghi Industries Limited on the financial statements for the year ended June 30, 20I2.]

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

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

(c) According to the information and explanations given to us, the Company has not disposed of any substantial part of the fixed assets during the year.

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

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

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

(iii) (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 30I of the Companies Act, I956. Accordingly, the provisions stated in paragraph 4(iii)(b),(c) and (d) of the order are not applicable.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 30I of the Companies Act, I956. Accordingly, the provisions stated in paragraph 4 (iii)(f) and (g) of the order are not applicable.

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

(v) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 30I of the Companies Act, I956 that need to be entered into the register maintained under section 30I have been so entered.

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

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

(viii) We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause

(d) of sub-section (I) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it. No undisputed amounts payable were outstanding as on 30th June 20I2 for a period more than six months from the date they became payable.

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

Name of the statute Nature of dues Amount Period to which Forum where dispute is (Rs.in Crore) the amount pending relates

Central Excise Act,1944 Excise Demand 42.60 Various years Customs, Excise & Service Customs Act, 1962 Customs Demand 1.52 2005-10 tax Appellate Tribunal

Service Tax Act, 1944 Service Tax 6.76 Various years Customs, Excise & Service Demand tax Appellate Tribunal

Electricity Act, 1994 Duty on 3.30 Various years Gujarat High Court Generation from D G Set

Bombay Land Revenue Land Revenue on 1.17 Various years Gujarat High Court Code, 1879 Leasehold Land

(x) In our opinion, the accumulated losses of the company are not more than fifty percent of its net worth. Further, the company has not incurred cash losses during the financial year covered by our audit 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 repayment of dues to a financial institution, bank or debenture holders.

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

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

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

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

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

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

(xviii) According to the information and explanation given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

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

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

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

For Ankit & Co. For Haribhakti & Co.

Chartered Accountants Chartered Accountants

FRN No.000I8IS FRN No.I03523W

S . Brij Kumar Prashant Maharishi

Partner Partner

M. No. I9357 M. No.4I452

Place : Mumbai

Date : 28th August, 20I2


Mar 31, 2010

1. We have audited the attached Balance Sheet of Sanghi Industries Limited (the Company) as at March 31, 2010 and also the Profit and Loss Account and the Cashflow 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 conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors 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 Companies Act, 1956 of India (the "Act") and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

iii. The balance sheet, 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 the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2010;

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

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

b) As informed to us, the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification as compared with books of accounts.

c) According to the information and explanations given to us, the Company has not disposed off any substantial part of fixed assets during the year.

2) a) According to the information and explanations given 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, 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) 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.

3) a) According to the information and explanations given 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.

b) According to the information and explanations given to us, the Company has not taken any loans secured or unsecured from Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

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 with regard to purchase of inventory, fixed assets and with regard to the sale of goods & services. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system.

5) There are no Contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered in the register maintained under this section. Accordingly, clause (v) (b) of paragraph 4 of the Order is not applicable to the Company.

6) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from public. Therefore, the provisions of the Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8) We have broadly reviewed the books of account relating to the material, labour and other item of cost maintained by the Company pursuance to the rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9) a) According to the records of the Company, undisputed statutory dues including Provident Fund, Employees State

Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty, Cess and any other statutory dues have been generally regularly deposited with the appropriate authorities. No undisputed amounts payable were outstanding as on 31st March, 2010 for a period more than six months from the date they became payable.

b) According to the information and explanations given to us, there have been no dues of Income Tax, Wealth Tax, Customs Duty, Excise Duty, Service Tax, Cess and Sales tax, that have not been deposited on account of any dispute, except as under:

(Rs. Crore)

Name of the Forum where statute Name of dues Amount Period to dispute is which the pending amount relates

Central Excise Act,1944 Excise Demand 47.22 Various years Custom, Excise & Serv ice tax Appel late Tribunal Ahmedabad & Delhi

Service Tax Act,1994 Service Tax 9.28 Various years Custom, Exci se & Service tax Appellate Demand Tribunal Ahmedabad

Electricity Duty on Act,1958 generation 3.30 Various years Gujarat High Court from DG Set

Bombay Land Land Revenue Revenue on 1.17 Various years Gujarat High Court

Code 1879 Leasehold Land

10) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

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

13) To the best of our knowledge and belief and according to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

14) Based on audit procedures performed and information and explanations given by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

15) The clauses iii(b),(c),(d),(f),(g)(xii),(xiii),(xiv),(xv),(xviii), (xix) and (xx) of paragraph 4 and 5 of the Order are not applicable to the Company and hence not reported upon.

For Ankit & Co. For Haribhakti & Co. Chartered Accountants Chartered Accountants FRN No. 000181S FRN No.103523W

S . Brij Kumar Chetan Desai Partner Partner Membership No. 19357 Membership No.17000

Place: New Delhi Date: 13th August, 2010

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