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Auditor Report of Sejal Glass Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of SEJAL GLASS LIMITED, (formerly known as Sezal Glass 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''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") read with General Circular 15/2013 dated 15th September, 2013 of 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.

AUDITOR''S 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 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.

BASIS FOR QUALIFIED OPINION

* The Company has not obtained balance confirmations in respect of Sundry Debtors, Sundry Creditors, Loans and Advances given and Inter Corporate Deposits (excluding Group companies).

* In the absence of convincing evidence assuring future taxable income, the continuance of Deferred Tax Asset of Rs.22,42,01,433/-is virtually uncertain.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, and subject to note no. 26(9) to the financial statements and Non Provision against Deferred Tax Asset referred in Basis of Opinion, 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:

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

ii. in the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

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

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

b) Except for the effects of matter described in the Basis for Qualified opinion paragraph, 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) Except for the effects of matter described in the Basis for Qualified opinion paragraph, 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 General Circular 15/2013 dated 15th September, 2013 of Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; on the basis of written representations received from the Directors as on March 31, 2014, and taken on record by the Board of Directors, none of the Directors is disqualified as on March 31, 2014, from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure to the Auditors'' Report

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of SEJAL GLASS LIMITED 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. IN RESPECT OF FIXED ASSETS:

a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets. The fixed assets register needs to be updated to reconcile with the general Ledger.

b) As explained to us, the assets have been physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) During the year, the Company sold part of its Building which did not form substantial part of its fixed assets. This sale has not affected the going concern status of the Company.

2. IN RESPECT OF INVENTORIES:

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

b) In our opinion, the procedure of physical verification of inventories followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company has maintained proper records of inventory. No material discrepancies have been noticed on verification of inventories as compared to book records.

d) Proper procedure however should be in place to assess the non-moving and obsolete items in the inventory. The Inventory includes old and non moving items amounting to Rs.3.12Crores-. No provision for the same has been made in the books of account of the company.

3. IN RESPECT OF LOANS TAKEN OR GRANTED:

a) Company has granted unsecured loans amounting to Rs.526.52 Lacs in addition to the Rs.2671.90 Lacs as at the beginning of the year, to Companies, firms or other parties listed in the Register under section 301 of the Companies Act, 1956. Out of these, loans amounting to Rs.172.63 Lacs have been received back and the balance outstanding as at the end of the year was Rs.3025.79 Lacs. Maximum balance in these accounts during the year was Rs. 3025.79 Lacs.

b) The Company had taken loans amounting to Rs.NIL during the year in addition to the loans taken and outstanding as at the beginning of the year, from Companies, firms or other parties listed in the Register under section 301 of the Companies Act, 1956 amounting to Rs.NIL .

c) In our opinion, the rates of interest wherever paid or charged, to the parties covered in the Register under section 301 of the Companies Act, 1956, were not prejudicial to the Interests of the Company.

d) In our opinion, since no specific stipulations as to the terms of repayment were agreed upon, this clause does not apply.

4. In our opinion and according to the information and explanations given to us, and as reported by the Internal Auditors of the Company and as per note no. 26.9 to the audited accounts, the internal control procedures with regard to the purchases of inventory, sale of goods, collection from customers, inventory management, cash management, credit notes monitoring, need to be strengthened, to be commensurate with the size of the Company and the nature of its business, particularly in respect of trading sales activity carried out by the retail division which requires regular adherence to internal control procedure. In our opinion, measures should be taken to improve upon these weaknesses.

5. (a) According to the information and explanations given to us, we are of the opinion that the transactions need to be entered in 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 transactions made in pursuance of contracts or arrangements that should have been entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five Lacs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

* In our opinion and according to the information and explanations given to us, the Company has not complied with the provisions of section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the Deposits accepted from public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, on the Company. The Company has continuously defaulted in payment of interest

* The Company has also failed to repay matured fixed deposits amounting to Rs.1.88 Crores as at 31st March, 2014. However, out of this, a sum of Rs.36.20 Lacs has since been paid.

* Intimation of non payment of matured deposits in respect of small depositors has not been given to the Company Law Board. * The requirement of maintaining Liquid Assets against deposits maturing by 31st March, 2014 has not been complied with.

* The company has not filed the return of Deposits for the financial year 2012-2013.

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

7. According to the information and explanations given to us and to the best of our knowledge and belief, consequent upon notification of the Companies (Cost Accounting Records) Rules, 2011, the Central Government has prescribed audit of the cost records maintained by the Company under Section 209(1) (d) of the Companies Act, 1956 for the products of the Company.

8. a) The company has generally defaulted in timely payment of undisputed statutory dues including Provident Fund, Investor Education & Protection fund, Employees'' State insurance and Customs Duty, Excise Duty, Cess, wealth tax and other material statutory dues as applicable to it. There have been delays in payment of following statutory liabilities. The outstanding balance in these accounts as at 31st March, 2014 is as follows:-

* Provident Fund - Rs. 33.12Lacs (Rs.0.55 lacs since paid).

* Income Tax i.e. Tax Deducted at source (TDS) Rs. 164.16Lacs.

* Central Sales Tax - Rs.151.02 Lacs.

* Maharashtra VAT - Rs. 61.46 Lacs.

* Service Tax - Rs.25.78 Lacs * ESIC - Rs. 0.68 Lacs (Rs.0.13 lacs since paid) * Profession Tax - Rs. 0.55 Lacs (Rs.0.14 lacs since paid)

* Excise Duty - Rs.69.67 Lacs In our opinion and according to information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, and Cess were in arrears as at 31st March 2014 for the period of more than six months from the date they became payable, except Income Tax Deducted at Source (TDS) - Rs. 120.44 Lacs, Central Sales tax - Rs.132.23 Lacs and Maharashtra VAT 46.39 Lacs; Service Tax - Rs.22.74 Lacs, ESIC Rs.0.01 Lacs, Provident Fund Rs.21.58 Lacs.

b) According to the information and the explanations given to us, there are no dues outstanding of Sales Tax, Custom Duty, Wealth Tax, Excise Duty or cess applicable to it, which have not been deposited on account of any dispute. However, according to the information and explanations given to us, the following dues of Income tax have not been deposited by the Company on account of dispute:-

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

Income Tax Act Penalty 3696564/- A.Y. 2006-07 CIT (A)

Income Tax Act Penalty 4900913/- A.Y. 2007-08 CIT (A)

Income Tax Act Penalty 4087154/- A.Y. 2008-09 CIT (A)

9. The Company has accumulated losses at the end of the financial year and it has also incurred cash losses in the financial year under report. The Company has not suffered cash losses during the immediately preceding financial year.

10. There have been delays in repayment of quarterly Installments of Term Loans (Principle) taken from the bank for the processing division of the company.

Also, the company''s loan accounts have been classified as Non-performing Assets by the lending bankers. All the banks have issued Securitization Notice to the Company for recovery of its advances. We are informed that the company has initiated appropriate action in these cases.

11. There are no borrowings from Financial Institutions. Company has not issued debentures during the year.

12. In our opinion and 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. In our opinion, the Provisions of any special statute as specified under clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

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

15. In our opinion and according to the information and explanations given to us, the Company has not given any Guarantees for loans taken by another company from Banks and hence the provisions of this clause do not apply.

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

17. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that the Company has not utilised its working capital funds for acquiring Long Term assets. No long term funds have been used to finance short term assets.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year, to the parties covered in the register maintained under section 301 of the Companies Act, 1956, being the core promoters and promoter Companies.

19. The company has not issued any debentures during the year and hence the provisions of clause (xix) of paragraph 4 of the Order are not applicable to the company.

20. During the year covered by our Audit, the Company has not raised any money by way of a public issue.

21. According to the information and the explanations given to us, no fraud on or by the Company has been noticed or reported during the year. However, we are unable to determine / verify as to whether any such reporting has been done, during the year.

For S S PURANIK & ASSOCIATES Chartered Accountants FRN 127731W

SHRIPAD S PURANIK Partner M.Ship No. 030670

Mumbai Date: May 30, 2014


Mar 31, 2012

We have audited the attached Balance Sheet of SEZAL GLASS LIMITED as at March 31, 2012, the Statement of Profit and Loss and also 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.

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 and report that:

1. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we con- side red appropriate and in terms of information and explanations given to us, we enclose in the Annexure a Statement on the matters specified in paragraph 4 & 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above :

a) 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;

b) In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of such books;

c) The Company's 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 dealt with by this Report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors of the Company, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a Director in terms of Section 274(1) (g) of the Companies Act, 1956;

3. In our opinion and to the best of our information and according to the explanations given to us, they said ac- counts, read together with the other notes appearing thereon in Schedule 22 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

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

(iii) 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 1 of thereof]

1. In respect of Fixed Assets:

a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets. The fixed assets register needs to be updated to reconcile with the general Ledger.

b) As explained to us, the assets have been physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) During the year, while the Company sold its Float Glass Manufacturing Plant which formed substantial part of its fixed assets. However, the sale of Float Glass Manufacturing Plant, which was an independent business activity of the Company, has not affected the going concern status of the Company.

2. In respect of Inventories:

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

b) In our opinion, the procedure of physical verification of inventories followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company has maintained proper records of inventory. No material discrepancies have been noticed on verification of inventories as compared to book records.

d) Proper procedure however should be in place to assess the non-moving and obsolete items in the inventory.

3. In respect of Loans taken for granted:

a) Company has granted unsecured loans amounting to Rs.1619.04 in addition to the Rs.258.23 Lacs as at the beginning of the year, to Companies, forms or other parties listed in the Register under section 301 of the Companies Act, 1956. Out of these loans, a refund of Rs.64.37 Lacs has been received and the balance outstanding as at the end of the year was Rs.1554.67 Lacs. Maximum balance in these accounts during the year was Rs.1554.67 Lacs.

b) The Company had taken loans amounting to Rs.NIL during the year in addition to the loans taken and outstanding as at the beginning of the year, from Companies, forms or other parties listed in the Register under section 301 of the Companies Act, 1956 amounting to Rs.155.50 Lacs. Out of these loans, a sum of Rs.8.00 Lacs was outstanding as at the end of the year. Maximum balance in these accounts during the year was Rs.155.50 Lacs.

c) In our opinion, the rates of interest wherever paid or charged, to the parties covered in the Register under section 301 of the Companies Act, 1956, were not prejudicial to the Interests of the Company.

d) In our opinion, since no specific stipulations as to the terms of repayment were agreed upon, this clause does not apply.

4. In our opinion and according to the information and explanations given to us, and as reported by the Internal Auditors of the Company, the internal control procedures with regard to the purchases of inventory and with regard to sale of goods, collection from customers, inventory management, Cash management, credit notes monitoring need to be strengthened, to be commensurate with the size of the Company and the nature of its business. Measures should be taken to improve upon the weaknesses observed in the Internal audit reports.

5. (a) According to the information and explanations given to us , we are of the opinion that the transactions need to be entered in 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 transactions made in pursuance of contracts or arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the Deposits accepted from public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Re- serve Bank of India or any Court or any other Tribunal, on the Company.

7. In our opinion and according to the information and explanations given to us, the Company has an internal audit system, commensurate with its size and nature of its business, post sale of its Float Glass Manufacturing business. The compliance report of internal audit observations was not available which must be strictly followed.

8. According to the information and explanations given to us and to the best of our knowledge and belief, consequent upon notification of the Companies (Cost Accounting Records) Rules, 2011, the Central Government has prescribed audit of the cost records maintained by the Company under Section 209(1)(d) of the Companies Act, 1956 for the products of the Company from the current financial year. We are informed that this being the first year, the company is in the process of developing the records required under Companies (Cost Accounting Records) Rules, 2011. We are therefore unable to comment and determine whether they are adequate, accurate or complete.

9. a) The company has generally been regular in depositing with appropriate authorities undisputed statutory

dues including Provident Fund, Investor education protection fund, Employees' State insurance and Customs Duty, Excise Duty, Cess, wealth tax and other material statutory dues as applicable to it. However, there have been delays in payment of Provident Fund; Income Tax i.e. Tax Deducted at source (TDS) has not been paid for the entire year except for TDS on Interest on Fixed deposit (till February 2012) and a small amount of TDS from payments to few parties; Central Sales Tax (processing division) has not been paid since August, 2011; Central Sales Tax (Sezal Encasa) has not been paid for the year as well as for prior year; Maharashtra VAT and Service Tax has not been paid for the entire year.

b) In our opinion and according to information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, and Cess were in arrears as at 31st March 2012 for the period of more than six months from the date they became payable, except Income Tax Deducted at Source (TDS) amounting to Rs.75.54 Lacs, Central Sales tax - Rs.52.61 Lacs and VAT 0.67 Lacs.

According to the information and the explanations given to us, there are no dues outstanding of Sales Tax, Custom Duty, Wealth Tax, Excise Duty, or cess and other statutory dues applicable to it, which have not been deposited on account of any dispute.

10. In our opinion, the Company has accumulated losses at the end of the financial year and it has incurred cash losses in the financial year under report. The Company suffered cash losses during the immediately preceding financial year also.

11. In our opinion and according to the explanations given to us, there have been delays in repayment of quarterly Installments of Term Loans (Principle) taken from the bank as follows:-Rs.25 Lacs (June 11) delayed by 40 days; Rs.25 Lacs (Sept 11) paid as Rs.5 Lacs delay 42 days, Rs.10 Lacs delay 56 days, Rs.10 Lacs delay 80 days; Rs.29 Lacs (Dec 11) paid as Rs.26 Lacs delay 2 days & Rs.3 Lacs delay 10 days. March installment of Rs.5 lacs was unpaid as at the balance sheet date. There have been delays in monthly payment of Interest on the above said Term Loans ranging from 1 day to 80 days. Interest for March 2012 amounting to Rs.7.77 Lacs was yet to be paid as at the Balance Sheet date. In respect of Term Loans of Float Glass Division, interest payment has been delayed by 32 days for Rs.478.85 Lacs & by 1 day for Rs.504.47 Lacs.

There are no borrowings from Financial Institutions. No debentures have been issued by the company.

12. In our opinion and 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. In our opinion, the Provisions of any special statute as specified under clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

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

15. In our opinion and according to the information and explanations given to us, the Company has not given any Guarantees for loans taken by another company from Banks and hence the provisions of this clause do not apply.

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

17. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that the Company has not utilized its working capital funds for acquiring Long Term assets. No long term funds have been used to finance short term assets.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year, to the parties covered in the register maintained under section 301 of the Companies Act, 1956, being the core promoters and promoter Companies.

19. The company has not issued any debentures during the year and hence the provisions of clause (xix) of paragraph 4 of the Order are not applicable to the company.

20. During the year covered by our Audit, the Company has not raised any money by way of a public issue.

21. According to the information and the explanations given to us, no fraud on or by the Company has been noticed or reported during the year. However, we are unable to determine / verify as to whether any such reporting has been made, during the year.

For S S PURANIK & ASSOCIATES

Chartered Accountants

FRN 127731W

SHRIPAD S PURANIK Partner

M.Ship No. 030670

Mumbai,

May 30, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of SEZAL GLASS LTD. (formerly known as SEJAL ARCHITECTURAL GLASS LIMITED) as at March 31, 2011, the Profit and Loss Account and also 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.

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 and report that:

1. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government in terms of sub- section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we enclose in the Annexure a Statement on the matters specified in paragraph 4 & 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above :

a) 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;

b) In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of such books;

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

d) 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;

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors of the Company, we report that none of the Directors is disqualified as on March 31, 2011 from being appointed as a Director in terms of Section 274(1) (g) of the Companies Act, 1956;

3. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the other notes appearing thereon in Schedule 22 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011;

(ii) in the case of the Profit and Loss Account, of the Loss for the year ended on that date and

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

ANNEXURETO THE AUDITORS' REPORT [Referred to in Paragraph 1 of thereof]

1. In respect of Fixed Assets:

a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets. However, the fixed assets register is being updated to reconcile with the General Ledger.

b) As explained to us, the assets have been physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) During the year, the Company has not disposed off any substantial part of fixed assets, which will affect the going concern status of the Company.

2. In respect of Inventories:

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

b) In our opinion, the procedure of physical verification of inventories followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company has maintained proper records of inventory. No material discrepancies have been noticed on verification of inventories as compared to book records.

d) Proper procedure however should be in place to assess the non-moving and obsolete items in the inventory.

3. In respect of Loans taken or granted:

a) Company has granted unsecured loans amounting to Rs.258.23 Lacs to Companies, firms or other parties listed in the Register under section 301 of the Companies Act, 1956. Out of these loans, a sum of Rs.258.23 Lacs was outstanding as at the end of the year. Maximum balance in these accounts during the year was Rs.258.23 Lacs.

b) The Company had taken loans amounting to Rs.1373.62 Lacs from seven parties during the year in addition to the loans taken and outstanding as at the beginning of the year, from Companies, firms or other parties listed in the Register under section 301 of the Companies Act, 1956. Out of these loans, a sum of Rs.155.50 Lacs was outstanding as at the end of the year. Maximum balance in these accounts during the year was Rs.2158.61 Lacs.

c) In our opinion, the rates of interest wherever paid or charged, to the parties covered in the Register under section 301 of the Companies Act, 1956, were not prejudicial to the Interests of the Company.

d) In our opinion, since no specific stipulations as to the terms of repayment were agreed upon, this clause does not apply.

4. In our opinion and according to the information and explanations given to us, and as reported by the Internal Auditors of the Company, the internal control procedures, commensurate with the size of the Company and the nature of its business with regard to the purchases of inventory, fixed assets and with regard to sale of goods, need to be strengthened. Measures should be taken to improve upon the weaknesses observed during the course of the Internal Audit.

5. (a) According to the information and explanations given to us, we are of the opinion that the transactions need to be entered in 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 transactions made in pursuance of contracts or arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the Deposits accepted from public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, on the Company.

7. On the basis of the internal audit reports broadly reviewed by us, we are of the opinion that the Company has an internal audit system commensurate with its size and nature of its business. The compliance of internal audit observations needs to be strictly observed.

8. According to the information and explanations given to us and to the best of our knowledge and belief, the Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. a) The company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees' State Insurance and Customs Duty, Excise Duty, Cess, wealth tax and other material statutory dues as applicable to it. However, there have been delays in payment of Provident Fund, Income Tax i.e. Tax Deducted at source (TDS) under various heads. Central Sales Tax has not been paid by the company for the prior year.

b) In our opinion and according to information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, and Cess were in arrears as at 31st March 2011 for the period of more than six months from the date they became payable, except Income Tax Deducted at Source (TDS) amounting to Rs.79.75 Lacs And Central Sales tax – Rs.62 Lacs. The Company has however paid this Income Tax (TDS) after the balance sheet date.

According to the information and the explanations given to us, there are no dues outstanding of Sales Tax, Custom Duty, Wealth Tax, Excise Duty, or Cess and other statutory dues applicable to it, which have not been deposited on account of any dispute.

10. In our opinion, the Company has accumulated losses at the end of the financial year and it has incurred cash losses in the financial year under report. The Company did not suffer any cash losses during the immediately preceding financial year.

11. In our opinion and according to the explanations given to us, there have been delays in repayment of Quarterly Instalments of Term Loans (Principle) taken from the banks amounting to Rs.1209.50 Lacs. Also that there have been regular delays in monthly payment of Interest on the said Term Loans to banks. Interest in respect of some of the banks for the months of January, February and March 2011 amounting to Rs.1098.76 Lacs was yet to be paid as at the Balance Sheet date.

There are no borrowings from Financial Institutions. No debentures have been issued by the company.

12. In our opinion and 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. In our opinion, the Provisions of any special statute as specified under clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

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

15. In our opinion and according to the information and explanations given to us, the Company has not given any Guarantees for loans taken by another company from Banks and hence the provisions of this clause do not apply.

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

17. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that the Company has not utilised its working capital funds for acquiring Long Term assets. No long term funds have been used to finance short term assets.

18. According to the information and explanations given to us, the Company has, during the year, made preferential allotment of (i) 2,75,00,000 equity shares of the face value of Re.1/- each, at a premium of Rs.3/- per share, to the parties covered in the register maintained under section 301 of the Companies Act, 1956, being the core Promoters and Promoter Companies.

19. The company has not issued any debentures during the year and hence the provisions of clause (xix) of paragraph 4 of the Order are not applicable to the company.

20. During the year covered by our Audit, the Company has not raised any money by way of a public issue.

21. According to the information and the explanations given to us, no fraud on or by the Company has been noticed or reported during the year. However, we are unable to determine / verify as to whether any such reporting has been made, during the year.

For S S PURANIK & ASSOCIATES

Chartered Accountants

FRN 127731W

SHRIPAD S PURANIK

Partner M.Ship No. 030670 Mumbai, May 27, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of SEJAL ARCHITECTURAL GLASS LIMITED as at March 31, 2010, the Profit and Loss Account and also the Cash Flow Statement of the Company 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.

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 and report that:

1. As required by the Companies (Auditors Report) Order, 2003, issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and in terms of information and explanations given to us, we enclose in the Annexure a Statement on the matters specified in paragraph 4 & 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 above :

a) 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;

b) In our opinion, proper books of account have been kept by the Company, so far as appears from our examination of such books;

c) The Companys Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this Report, are in agreement with the Books of Account;

d) 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;

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors of the Company, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of Section 274(1) (g) of the Companies Act, 1956;

3. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read together with the other notes appearing thereon in Schedule 22 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:

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date and

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



Annexureto the Auditors Report [Referred to in Paragraph 1 of thereof]

1. In respect of Fixed Assets:

a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets. However, the fixed assets register is being updated to reconcile with the general ledger.

b) As explained to us, the assets have been physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

c) During the year, the Company has not disposed off any substantial part of fixed assets, which will affect the going concern status of the Company. However, the additional expenses of Rs. 1.01 Cr. incurred, at the time of installation have been written off the books as the machinery was returned to the suppliers during the prior year.

2. In respect of Inventories:

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

b) In our opinion, the procedure of physical verification of inventories followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company has maintained proper records of inventory. No material discrepancies have been noticed on verification of inventories as compared to book records.

d) Proper procedure however should be in place to assess the non-moving and obsolete items in the inventory.

3. In respect of Loans taken or granted:

a) Company has not granted unsecured loans, to Companies, firms or other parties listed in the Register under Section 301 of the Companies Act, 1956.

b) The Company had taken loans amounting to Rs. 1432.65 Lacs from three parties during the year in addition to the loans taken and outstanding as at the beginning of the year, from Companies, firms or other parties listed in the Register under Section 301 of the Companies Act, 1956. Out of these loans, a sum of Rs. 784.99 Lacs was outstanding as at the end of the year. Maximum balance in these accounts during the year was Rs. 2223.49 Lacs.

c) In our opinion, the rates of interest wherever paid or charged, to the parties covered in the Register under Section 301 of the Companies Act, 1956, were not prejudicial to the Interests of the Company.

d) In our opinion, since no specific stipulations as to the terms of repayment were agreed upon, this clause does not apply.

4. In our opinion and according to the information and explanations given to us, and as reported by the Internal Auditors of the Company, the internal control procedures, commensurate with the size of the Company and the nature of its business with regard to the purchases of inventory, fixed assets and with regard to sale of goods, need to be strengthened. Measures should be taken to improve upon the weaknesses observed during the course of the Internal Audit.

5. (a) According to the information and explanations given to us, we are of the opinion that the transactions need to be entered in 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 transactions made in pursuance of contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A & 58AA of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the Deposits accepted from Public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal, on the Company.

7. On the basis of the Internal Audit reports broadly reviewed by us, we are of the opinion that the Company has an Internal Audit system commensurate with its size and nature of its business. The Compliance of Internal Audit observations needs to be strictly observed.

8. According to the information and explanations given to us and to the best of our knowledge and belief, the Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. a) The Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education Protection Fund, Employees State Insurance and Customs Duty, Excise Duty, Cess, Wealth Tax and other material statutory dues as applicable to it. However, there have been delays in payment of Provident Fund, Income Tax i.e. Tax Deducted at Source (TDS) under various heads. Central Sales Tax has not been paid by the Company for the whole year.

b) In our opinion and according to information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Excise Duty, and Cess were in arrears as at 31st March 2010 for the period of more than six months from the date they become payable, except Income Tax Deducted at Source (TDS) amounting to Rs. 3.15 Cr. And Central Sales tax – Rs. 0.59 Cr.

According to the information and the explanations given to us, there are no dues outstanding of Sales Tax, Custom Duty, Wealth Tax, Excise Duty, or cess and other statutory dues applicable to it, which have not been deposited on account of any dispute.

10. In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the financial year under report and the immediately preceding financial year.

11. The Instalments for repayment of Principle have not yet become due for payment as the bankers have sanctioned a Moratorium till September 2010. In our opinion and according to the explanations given to us, there have been delays in monthly payment of Interest on Term Loans to banks. The monthly interest payable was paid in the following month till October 2009. However, interest for the month of November 2009 onwards has been delayed beyond the period of a month in some cases and in some cases, it has exceeded the period of two months. Interest for the months of February and March 2010 is yet to be paid There are no borrowings from Financial Institutions. No Debentures have been issued by the Company.

12. In our opinion and 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. In our opinion, the Provisions of any special statute as specified under clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. In our opinion, the Company is not dealing in or trading in Shares, Securities, Debentures and other Investments. Accordingly, the provisions of clause (xiv) of paragraph 4 of the Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given any Guarantees for loans taken by another company from Banks and hence the provisions of this clause do not apply.

16. In our opinion, the Term Loans have been applied for the purpose for which these were raised.

17. According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that the Company has not utilised its Working Capital funds for acquiring Long Term assets. No long term funds have been used to finance short term assets.

18. According to the information and explanations given to us, the Company has, during the year, made Preferential Allotment of 50,00,000 equity shares of the face value of Rs. 10/- each, at a premium of Rs. 30/- per share, by way of issue of share warrants, to the parties covered in the register maintained under Section 301 of the Companies Act, 1956, being the Core Promoters and Promoter Companies. Of the above, 8,00,000 shares have been fully paid up while in respect of the balance, 25% of the offer price has been received as Share Warrant Application money.

The Share Warrants have been offered at a price, determined in terms of SEBI Guidelines.

19. The Company has not issued any Debentures during the year and hence the provisions of clause (xix) of paragraph 4 of the Order are not applicable to the company.

20. During the year covered by our Audit, the Company has not raised any money by way of a public issue.

21. According to the information and the explanations given to us, no fraud on or by the Company has been noticed or reported during the year. However, we are unable to determine / verify as to whether any such reporting has been made, during the year.



For S S PURANIK & ASSOCIATES

Chartered Accountants

FRN 127731W

SHRIPAD S PURANIK

Partner

M.Ship No. 030670

Mumbai,

May 19, 2010

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