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Auditor Report of Satia Industries Ltd.

Mar 31, 2015

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

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 and presentation 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 adequate 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.

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

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

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, 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 operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company's Directors, as well as evaluating the overall presentation of the financial statements.

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.

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter mentioned in preceding paragraph, 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 31stMarch2015, its profit/loss and its cash flows for the year ended on that date.

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

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

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

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

c) the Balance Sheet, the Statement of Profit and Loss, and 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, and

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 2.20 to the financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses including derivative contracts.

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

Place : MUKTSAR FOR RAKESH BANSAL & CO.

Date : 13.08.2015 CHARTERED ACCOUNTANTS

RAKESH BANSAL

M.No.090278 FRN 011474N

The Annexure Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' of our Report of even date to the members of Satia Industries Limited, V.Rupana on the accounts of the company for the year ended 31st March, 2015.

On the basis of such checks as we considered appropriate and according to the information and Explanations given to us during the course of our audit, we report that:

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

(b) As explained to us, fixed assets have been physically verified by the management during the year in accordance with the phased programme of verification adopted by the management which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) (a) As explained to us, the inventories of finished goods, semi-finished goods, stores, spare parts and raw materials were physically verified at regular intervals/ (at the end of the year) by the Management. There are no inventories lying with third parties at the close of the year.

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

b) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories except for material lying on floor & work in progress, which has been determined during the physical verification at the year end. The discrepancies noticed on verification between the physical stocks and the book records were not material in relation to the operations of the Company and the same have properly dealt with in the books of accounts.

(iii) In respect of loans, secured or unsecured, granted to the parties covered in register maintained under section 189 of the Companies Act 2013:

According to the information and explanations given to us, the Company has not granted any loans to companies, firms or other p a r t i e s covered in the Register maintained under Section 189 of the Companies Act, 2013; and therefore paragraph 3(iii ) of the Order is not applicable. The amounts outstanding are the outcome of the normal trade transaction of sale and purchase.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods (and/services). During the course of our Audit, we have not observed any continuing failure to correct major weaknesses in internal control.

(v) According to the information and explanation given to us, The Company has not received any public deposits during the year.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Rules made by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of these records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

a) According to the records of the company and information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, employees state insurance (ESI), Investor Education and Protection Fund, Income-tax, Tax deducted at sources, Tax collected at source, Professional Tax, Sales Tax, value added tax (VAT), Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it, with the appropriate authorities.

b) According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, sales tax, VAT, Cess and other material statutory dues in arrears /were outstanding as at 31 March, 2015 for a period of more than six months from the date they became payable except:

(i) Department of Central Excise & Customs Rs.3.83 Lacs

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

(viii) The company does not have the accumulated losses at the end of financial year. The company has not incurred any Cash losses during the financial covered by our Audit and the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

(x) The company has given guarantees in connection with loans of Rs.1210.00 Lacs(Present Outstanding Rs.693.57 Lacs) taken by TC Spinners Private Limited, V Lalru from banks. In our opinion, and according to the information and the explanation given to us, the terms and conditions of the guarantees given are not prejudicial to the interest of the company.

(xi) The Term loans taken by the company have been applied for the purpose for which they were raised.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

Place : MUKTSAR FOR RAKESH BANSAL & CO.

Date : 13.08.2015 CHARTERED ACCOUNTANTS

RAKESH BANSAL

M.No.090278 FRN 011474N


Mar 31, 2014

We have audited the accompanying financial statements of Satia Industries 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.

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

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

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

b) in the case of the Profit and Loss Account, of the profit/ loss 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.

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

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

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

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

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

d) in our opinion, the balance sheet, statement of profit and loss and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e) on the basis of written representations received from the directors as on March 31,2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Satia Industries Limited, Rupana on the accounts of the company for the year ended 31st March, 2014.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets with effect from 01-04-1993. The assets record for the period prior to 01.04.1993 has reportedly been destroyed in fire.

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) During the year the Company has sold its Wind Power Project located in the state of Tamilnadu by way of Slump Sale. In our opinion and according to the information and explanations given to us, the sale of this independent power unit will not affect the going concern assumption for the other segments.

2. (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(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 on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. The amount outstanding has been reported to be trade debt. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(b) (iii) (e) According to the information and explanations given to us, the Company has taken loan from ten parties listed in the Register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs 208.04 lacs and the year end balance of loans taken from such parties was Rs34.45 lacs. We have been informed that the loans have been taken from the parties which are exempt under the Companies (Acceptance of Deposits) Rules, 1975. These loans have not been verified by us and we have relied on the management certificate.

iii (f) In our opinion the terms and conditions of unsecured interest free loans taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

iii (g) No stipulation with regard to the repayment has been made hence no comments are offered whether the company is regular in repayment of principal and if there is any over due balance.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) As per information & explanations given to us and in our opinion, the transactions by the company with parties covered u/s 301 of the Act exceeding five lacs rupees are entered at the price prevailing into the market price and are reasonable in a financial year.

6. We have been informed that security deposits as appearing in Schedule-4 of the balance sheet have been taken/accepted from the suppliers, customers and others only for the purpose of business of the Company and unsecured loan have been taken from relatives of promoter in Pursuance of the Stipulation of the bank for granting loans, Director which are exempt under the Companies (Acceptance of Deposits) Rules, 1975. These deposits have not been verified by us and we have relied on the management certificate.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. (a) According to the records of the company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 for a period of more than six months from the date they became payable.(b) According to the record of the Company & information and explanation given to us, there are no dues of Sales Tax, Income Tax, Custom duty, Wealth tax, Excise duty, Service Tax & Cess which have not been deposited on account of any dispute, other than the following:

Sr. Name of Nature of dues Amount Forum where No. Statute (Rs. in Lacs) dispute is pending

1. Central Classification of 3.83 Punjab & Excise credit whether as Haryana High Input or capital goods Court Chandigarh

2. Delhi Sale Sales Tax 3.86 Asstt. Tax Act Form ST-I Commissioner Zone-1 Delhi

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

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given 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.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) order, 2003 are not applicable to the Company.

15. According to the information and explanations given to us, the Company has given a guarantee of Rs.1210 lacs (outstanding balance Rs.838.65 lacs) on behalf of T.C. Spinners Pvt. Ltd., Lalru in favour of Uco Bank. In our opinion the terms of guarantee given are not prejudicial in the interest of the company.

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For RAKESH BANSAL & CO. CHARTERED ACCOUNTANTS

Place : Muktsar (RAKESH BANSAL) Date : 05.08.2014 PROPRIETOR Membership No. 090278 FRN 011474N




Mar 31, 2013

We have audited the accompanying financial statements of Satia Industries Limited (The Company"), which comprise the Balance Sheet as at March 31,2013, 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,

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.

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 materia! 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 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.

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2013;

b) in the case of the Profit and Loss Account, of the profit/ loss 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.

1. As required by the Companies (Auditor's Report) Order, 2003 ("theQrder") 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 Companies Act, 1956;

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

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

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Satia Industries Limited, Rupana on the accounts of the company for the year ended 31st March, 2013.

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of our audit, we report that:

1. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets with effect from 01-04-1993. The assets record for the period prior to 01.04.1993 has reportedly been destroyed in fire.

b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals; no material discrepancies were noticed on such verification.

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. (a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(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 on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. (a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956. The amount outstanding has been reported to be trade debt. Consequently, the provisions of clauses iii (b), iii(c) and iii (d) of the order are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has taken loan from thirteen parties listed in the Register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs. 472.10 lacs and the year end balance of loans taken from such parties were Rs. 134.79 lacs. We have been informed that the loans have been taken from the parties which are exempt under the Companies (Acceptance of Deposits) Rules, 1975. These loans have not been verified by us and we have relied on the management certificate.

(c) In our opinion the terms and conditions of unsecured interest free loans taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(d) No stipulation with regard to the payment has been made hence no comments are offered whether the company is regular in repayment of principal and if there is any over due balance.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate interna! control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the interna! controls has been noticed.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

b) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

6. We have been informed that security deposits as appearing in Schedule-4 of the balance sheet have been taken/accepted from the suppliers, customers and others only for the purpose of business of the Company and unsecured loan have been taken from relatives of directors which are exempt under the Companies (Acceptance of Deposits) Rules, 1975. These deposits have not been verified by us and we have relied on the management certificate.

7. As per information & explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. As per information & explanation given by the management, maintenance of cost records has been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act and we are of the opinion that primia 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, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable.

(b) According to the record of the Company & information and explanation given to us, there are no dues of Sales Tax, income Tax, Custom duty, Wealth tax, Excise duty, Service Tax & Cess which have not beer; deposited on account of any dispute, other than the following:

Sr. Name of Statute Nature of dues Amount Forum where No. (Rs. in dispute is Lacs) pending

1. Central Excise Classification of 3.83 Punjab & credit whether as Haryana input or capital goods High Court Chandigarh

2. Delhi Sale Tax Act Sales Tax Form ST-I 3.86 Asstt. Commissioner Zone-1 Delhi

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

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given 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.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the Company.

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) order, 2003 are not applicable to the Company.

15. According to the information and explanations given to us, the Company has given a guarantee of Rs.490 lacs (outstanding balance Rs. 204.83 lacs) on behalf of T.C. Spinners Pvt. Ltd., Lalru in favour of Uco Bank. In our opinion the terms of guarantee given are not prejudicial in the interest of the company.

16. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

19. The Company has no outstanding debentures during the period under audit.

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

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For RAKESH BANSAL & CO. CHARTERED ACCOUNTANTS

Place : Muktsar (RAKESH BANSAL) Date : 14.05.2013 PROPRIETOR Membership No. 090278 FRN 011474N


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s SATIA INDUSTRIES LIMITED FORMERLY KNOWN AS SATIA PAPER MILLS LIMITED, MUKTSAR as on 31st March, 2012 and also the Profit & Loss Account and the Cash Flow Statement of the Company 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 (hereinafter referred to as CARO, 2003) issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, 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 & 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 & Loss Account and Cash flow Statement dealt with by this report comply with the accounting standards referred to in Sub Section 3(C) of Section 211 of the Companies Act, 1956.

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

(vi) In our opinion and to the best of information and according to the explanations given to us, the said accounts read together with notes thereon in schedule 18, 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2012.

(b) in the case of 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

Re : Satia Industries Ltd.

Referred to in paragraph (3) of our report of even date.

(i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The assets record for the period prior to 01.04.1993 has reportedly been destroyed in fire.

(b) All fixed 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. In accordance with the programme, plant and machinery have been physically verified during the year. As informed, no material discrepancies were noticed on such verification.

(c) During the year, Company has not disposed off any substantial part of fixed assets.

(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 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 & the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory except for material lying on floor & work in progress, which has been determined during the physical verification at the year end. The discrepancies noticed on verification between the physical stocks and the book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of accounts.

(iii) (a) According to the information and explanation given to us, the company has not granted any loan, secured or unsecured, to the parties covered in the register maintained under section 301 of the Companies Act, 1956.The amount outstanding has been reported to be trade debt.

(b) In view of comments in para iii (a) above, para iii (b), (c), and (d) of CARO, 2003 are not applicable.

(c) According to the information and explanations given to us, the Company has taken loan from twelve parties listed in the Register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs. 327.46 lacs and the year end balance of loans taken from such parties were Rs, 305.46 lacs. We have been informed that the loans have been taken from the parties which are exempt under the Companies (Acceptance of Deposits) Rules, 1975. These loans have not been verified by us and we have relied on the management certificate.

(d) In our opinion the terms and conditions of unsecured interest free loans taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(e) No stipulation with regard to the payment has been made hence no comments are offered whether the company is regular in repayment of principal and if there is any over due balance.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

(v) (a) According to the information and explanations given to us, 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 so entered.

(b) In our opinion and according to the information and explanations given to us the Company has not made any transaction 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.

(vi) We have been informed that security deposits as appearing in Schedule-4 of the balance sheet have been taken/accepted from the suppliers, customers and others only for the purpose of business of the Company and unsecured loan have been taken from relatives of directors which are exempt under the Companies (Acceptance of Deposits) Rules, 1975. These deposits have not been verified by us and we have relied on the management certificate.

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

(viii) We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant 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.

(ix) (a) According to the records of the Company and information and explanations given to us, the Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Funds, Employee's State Insurance, Income- Tax, Sales-Tax, Wealth-Tax, Custom duty, Cess and other statutory dues as applicable to the company with the appropriate authorities during the year.

(b) According to the information & explanation given to us, no undisputed amounts payable in respect of Income-Tax, Wealth-Tax, Sales-Tax, Customs Duty, Service Tax and Cess were in arrears, as at 31st March, 2012 for a period of more than six months from the date they become payable.

(c) According to the record of the Company & information and explanation given to us, there are no dues of Sales Tax, Income Tax, Custom duty, Wealth tax, Excise duty, Service Tax & Cess which have not been deposited on account of any dispute, other than the following:

Sr. Name of Nature of dues Amount Forum where No. Statute (Rs. in Lacs) dispute is pending

1. Central Classification of 4.40 Punjab & Haryana Excise credit whether High Court as Input or Chandigarh capital goods

2. Delhi Sale Sales Tax 3.86 Asstt. Tax Act Form ST-I Commissioner Zone-1 Delhi

(x) The Company does not have accumulated losses as at the end of the year and the Company has not incurred cash losses during current and the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to financial institution or bank.

(xii) In our opinion and according to the information given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and others.

(xiii) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) order, 2003 are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given a guarantee of Rs.490 lacs (outstanding balance Rs. 287.92 lacs) on behalf of T.C. Spinners Pvt. Ltd., Lalru in favour of Uco Bank. In our opinion the terms of guarantee given are not prejudicial in the interest of the company.

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

(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 fund raised on short term basis have been used for long term investment.

(xviii) According to the information and explanations given to us and based on the documents and records produced to us, the company has not made 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 explanation given to us and the records examined by us, the Company has not issued debentures.

(xx) The Company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

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

For RAKESH BANSAL & CO. Chartered Accountants

Place : Muktsar Date : 13.08.2012 (RAKESH BANSAL) PROPRIETOR Membership No. 090278 FRN 011474N


Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s SATIA INDUSTRIES LIMITED FORMERLY KNOWN AS SATIA PAPER MILLS LIMITED, MUKTSAR as on 31st March, 2011 and also the Profit & Loss Account and the Cash Flow Statement of the Company 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 issued by the Central Government of India in terms of sub section (4A) of section 227 of the Companies Act, 1956, 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 & 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 & Loss Account and Cash flow Statement dealt with by this report comply with the accounting standards referred to in Sub Section 3(C) of Section 211 of the Companies Act, 1956.

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

(vi) in our opinion and to the best of information and according to the explanations given to us, the said accounts read together with notes thereon in schedule 18, 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 Balance Sheet, of the state of affairs of the Company as at 31st March, 2011.

(b) in the case of 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

Re : Satia Industries Ltd.

Referred to in paragraph (3) of our report of even date.

I. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. The assets record for the period prior to 01.04.1993 has reportedly been destroyed in fire.

(b) All fixed 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. In accordance of the said programme, plant and machinery have been physically verified during the year. As informed, no material discrepancies were noticed on such verification.

(c) During the year, Company has not disposed off any substantial part of fixed assets expect some scrap and unused machinery.

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 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 & the nature of its business.

(c) In our opinion, the Company is maintaining proper records of inventory except for material lying on floor & work in progress, which has been determined during the physical verification at the year end. The discrepancies noticed on verification between the physical stocks and the book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of accounts.

Ill (a) According to the information and explanations given to us, the Company has taken loan from 13 (thirteen) parties listed in the Register maintained under section 301 of the Companies Act 1956. The maximum amount involved during the year was Rs. 186.79 lacs and the year end balance of loans taken from such parties was Rs. 181.29 lacs. We have been informed that the loans have been taken from the parties which are exempt under the Companies (Acceptance of Deposits) Rules, 1975. These loans have not been verified by us and we have relied on the management certificate.

(b) In our opinion the terms and conditions of unsecured interest free loans taken from the parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company. No stipulation with regard to the payment has been made hence no comments are offered whether the company is regular in repayment of principal and if there is any over due balance.

(c) 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. The amount outstanding has been reported to be trade debts.

IV. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and nature of its business with regard to the purchase of inventory and fixed assets, and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the interna! controls.

V (a) According to the information and explanations given to us, 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 so entered.

(b) In our opinion and according to the information and explanations given to us the Company has not made any transaction 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.

VI. We have been informed that security deposits as appearing in Schedule-4 of the balance sheet have been taken/accepted from the suppliers, customers and others only for the purpose of business of the Company and unsecured loan have been taken from relatives of directors which are exempt under the Companies (Acceptance of Deposits) Rules, 1975. These deposits have not been verified by us and we have relied on the management certificate.

VII. In our opinion, Company's internal audit system is commensurate with the size and nature of its business.

VIII. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the Company pursuant 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.

IX. (a) According to the records of the Company and information and explanations given to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Funds, Employee's State Insurance, Income-Tax, Sales-Tax, Wealth-Tax, Custom duty, Service Tax, Cess and other statutory dues as applicable to the company with the appropriate authorities during the year though there has been delay in case of excise duty & service tax.

(b) According to the information & explanation given to us, no undisputed amounts payable in respect of Income-Tax, Wealth-Tax, Sales-Tax, Customs Duty, Service Tax and Cess were in arrears, as at 31 st March, 2011 for a period of more than six months from the date they become payable.

(c) According to the record of the Company & information and explanation given to us, there are no dues of Sales Tax, Income Tax, Custom duty, Wealth tax, Excise duty, Service Tax & Cess which have not been deposited on account of any dispute, other than the following:

Sr. Name of Statute Nature of dues Amount No. (Rs. in Lacs)

1. Central Excise Classification of 4.40 credit whether as Input or capital goods

2. Delhi Sale Tax Act Sales Tax 3.86 Form ST-I

Sr. Name of Statute Forum where dispute is pending No.

1. Central Excise Punjab & Haryana High Court Chandigarh

2. Delhi Sale Tax Act Asstt. Commissioner Zone-1 Delhi

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

XI. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to financial institution or bank.

XII. In our opinion and according to the information given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and others.

XIII. In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

XIV. In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) order, 2003 are not applicable to the Company.

XV. According to the information and explanations given to us, the Company has during a year given a guarantee of Rs.490 lacs on behalf of T.C. Spinners Pvt. Ltd., Lalru in favour of Uco Bank. In our opinion the terms of guarantee given are not prejudicial in the interest of the company .

XVI. To the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

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 fund raised on short term basis have been used for long term investment.

XVIII. According to the information and explanations given to us and based on the documents and records produced to us, the company has not made 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 explanation given to us and the records examined by us, the Company has not issued debentures.

XX. The Company has not raised money by any public issues during the year and hence the question of disclosure and verification of end use of such money does not arise.

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

FOR RAKESH BANSAL & CO. Chartered Accountants

Place : Ruppana, (Muktsar) (RAKESH BANSAL) Date : 11.08.2011 PROPRIETOR Membership No. 090278 FRN 011474N

 
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