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Auditor Report of Shilchar Technologies Ltd.

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying Financial Statements of SHILCHAR TECHNOLOGIES LIMITED ("the Company") which comprise the Balance sheet as at 31st March, 2014 and the Statement of Profit & Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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 notified under the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th 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.

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

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

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 ("the order") and Companies (Auditors Report) Order (Amendment), 2004 (hereinafter collectively referred to as CARO) issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraph 4 & 5 of the said Order.

2. As per the requirements under 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 accounts as required by the law have been kept by the Company, so far as appears from our examination of the said books;

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss Account annexed thereto and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular No.15/ 2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e) On the basis of written representations received from the directors, as on 31st March, 2014, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2014 from being appointed as a director of the Company under 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.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date) for the year ended 31st March 2014 of Shilchar Technologies Limited)

(i) (a) The Company has maintained proper records showing full particulars including Quantitative Details since 2000. As informed to us, the Company is in the process of updating its old records as well as situation of Fixed Assets

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

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

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

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in the books of accounts.

(iii) (a) The Company has not granted any loan, secured or unsecured, to Companies, Firms or Other Parties covered in

the register maintained u/s. 301 of the Companies Act, 1956 during the year under report. Consequently, no comments are necessary on Para (iii) (b), (c) & (d) of CARO.

(b) The Company has not taken any loans, secured or unsecured, from Companies, Firms or Other Parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, no comments are necessary on Para (iii) (e), (f) & (g) of CARO.

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

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the

management, we are of the opinion that 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) 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 registers maintained under Section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Rule 2(b) of the Companies (Acceptance of Deposit) Rules, 1975. Hence, the Directives issued by RBI or provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 or the rules framed there under are not applicable.

(vii) The Company has appointed an independent firm of Chartered Accountants firm to carry out its Internal Audit Function. In our opinion and according to the information and explanations given to us, prima facie, the same is commensurate with the size of Company and nature of business.

(viii) We have broadly reviewed the cost records maintained by the company for its products pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed 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 cost records have been made and maintained. However, we have not made a detailed examination of these records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records of the Company, the Company is regular in depositing with appropriate authoritiesundisputed statutory dues including Provident Fund, Investor Educationand Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax,Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and othermaterial statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other applicable material statutory liabilities were outstanding, as at 31st March, 2014 for a period of more than six months from the date they became payable.

(b) According to the records of the company, there are no dues of Sales Tax, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty, Cess or other applicable statutory liabilities which have not been deposited on account of any dispute except the following :

CST Demand of Rs. 3,82,863 for 2008-09

{The Company has filed an appeal before the Jt. Commissioner of Commercial Taxes (Appeals) against the Assessment Order which is pending.}

CST Demand of Rs. 19,58,175/- for 2009-10

{The Company has filed an appeal before the Jt. Commissioner of Commercial Taxes (Appeals) against the Assessment Order which is pending.}

(x) The Company does not have any accumulated losses. The company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) 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 financial institutions or banks. The Company has not issued any debentures.

(xii) As per information given to us, during the year under report, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, considering the nature of activities carried on by the Company during the year, the Company is not a Chit fund or a Nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of CARO, 2003 are not applicable.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures or other investments. Accordingly, the Provisions of Clause 4 (xiv) of CARO, 2003 are not applicable.

(xv) As per the information and explanations given to us, the company not given guarantees for loans taken by others from Banks or Financial Institutions.

(xvi) The Company has raised new term loan (only Car Loan) during the year under report and has utilized the same for the purpose for which it was availed.

(xvii) On the basis of review of utilization of funds which is based on an overall examination of the balance sheet of the Company, related information as made available to us and as represented to us by the Management, we report that as at the Balance Sheet date the funds raised on short-term basis were not been used for long-term investment.

(xviii) The company has not made preferential allotment of shares to parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

(xix) During the year under report, the company has not issued any debentures.

(xx) The Company has not raised any money through public issues during the year under report.

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

for, Naresh & Co. Chartered Accountants (F.R.N. 106928W)

Place : Vadodara CA ANIL SHAH Date : 24.05.2014 Partner (M. R. N.035309)


Mar 31, 2013

We have audited the accompanying Financial Statements of SHILCHAR TECHNOLOGIES LIMITED ("the Company") which comprise the Balance sheet as at 31st March, 2013 and the Statement of Profit & Loss Account for the year ended on that date annexed thereto and the 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 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 judgement, 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 (Auditors Report) Order, 2003 ("the order") and Companies (Auditors Report) Order (Amendment), 2004 (hereinafter collectively referred to as CARO) issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraph 4 & 5 of the said Order.

2. As per the requirements under 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 accounts as required by the law have been kept by the Company, so far as appears from our examination of the said books;

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss Account annexed thereto and the 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.

e) On the basis of written representations received from the directors, as on 31st March, 2013, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2013 from being appointed as a director of the Company under 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.

ANNEXURE TO AUDITOR''S REPORT

(Referred to in paragraph 1 or our report of even date on the accounts for the year ended 31st March 2013 of Shilchar Technologies Limited)

(i) (a) The Company has maintained proper records showing full particulars including Quantitative Details since 2000. As informed to us, the Company is in the process of updating its old records as well as situation of Fixed Assets

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

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

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

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in the books of accounts.

(iii) (a) The Company has not granted any loan, secured or unsecured, to Companies, Firms or Other Parties covered in the register maintained u/s. 301 of the Companies Act, 1956 during the year under report. Consequently, no comments are necessary on Para (iii) (b), (c) & (d) of CARO.

(b) The Company has not taken any loans, secured or unsecured, from Companies, Firms or Other Parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, no comments are necessary on Para (iii) (e), (f) & (g) of CARO.

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

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that 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) 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 registers maintained under Section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Rule 2(b) of the Companies (Acceptance of Deposit) Rules, 1975. Hence, the Directives issued by RBI or provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 or the rules framed there under are not applicable.

(vii) The Company has appointed an independent firm of Chartered Accountants firm to carry out its Internal Audit Function. In our opinion and according to the information and explanations given to us, prima facie, the same is commensurate with the size of Company and nature of business.

(viii) We have broadly reviewed the cost records maintained by the company for its products pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed 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 cost records have been made and maintained. However, we have not made a detailed examination of these records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other applicable material statutory liabilities were outstanding, as at 31st March, 2013 for a period of more than six months from the date they became payable.

(b) According to the records of the company, there are no dues of Sales Tax, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty, Cess or other applicable statutory liabilities which have not been deposited on account of any dispute except the following :

Sales Tax Demand of Rs. 22,55,370 for 2007-08

{The Company has filed an appeal before the Jt. Commissioner of Commercial Taxes (Appeals) against the Assessment

Order which is pending.}

CST Demand of Rs. 3,82,863 for 2008-09

{The Company has filed an appeal before the Jt. Commissioner of Commercial Taxes (Appeals) against the Assessment

Order which is pending.}

(x) The Company does not have any accumulated losses. The company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) 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 financial institutions or banks. The Company has not issued any debentures.

(xii) As per information given to us, during the year under report, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, considering the nature of activities carried on by the Company during the year, the Company is not a Chit fund or a Nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of CARO, 2003 are not applicable.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures or other investments. Accordingly, the Provisions of Clause 4 (xiv) of CARO, 2003 are not applicable.

(xv) As per the information and explanations given to us, the company not given guarantees for loans taken by others from Banks or Financial Institutions.

(xvi) Company has not taken or raised new term loans during the year under report.

(xvii) On the basis of review of utilization of funds which is based on an overall examination of the balance sheet of the Company, related information as made available to us and as represented to us by the Management, we report that as at the Balance Sheet date the funds raised on short-term basis were not been used for long-term investment.

(xviii) The company has not made preferential allotment of shares to parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

(xix) During the year under report, the company has not issued any debentures.

(xx) The Company has not raised any money through public issues during the year under report.

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

for, Naresh & Co.

Chartered Accountants (F.R.N. 106928W)

Place : Vadodara CA Harin Parikh

Date : 04th May, 2013 Partner

(M. R. N. 107606)


Mar 31, 2012

We have audited the attached Balance Sheet of SHILCHAR TECHNOLOGIES LIMITED as at 31st March, 2012, the Statement of Profit & Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. These 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.

1. As required by the Companies (Auditors Report) Order, 2003 and Companies (Auditors Report) Order (Amendment), 2004 (hereinafter collectively referred to as CARO) issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraph 4 & 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 purpose of our Audit;

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss Account annexed thereto and the 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.

e) 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 of the Company under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and the Statement of Profit and Loss and Cash Flow statement annexed thereto, read together with the Notes thereon including Significant Accounting Policies, give the information as 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 31st March, 2012,

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

(iii) in the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date

(i) (a) The Company has maintained proper records showing full particulars including Quantitative Details since 2000. As informed to us, the Company is in the process of updating its old records as well as situation of Fixed Assets

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

(c) During the year, Company has not disposed off any of its assets, except an old parcel of land which was lying unused since long.

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

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

(c) On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in the books of accounts.

(iii) (a) The Company has not granted any loan, secured or unsecured, to Companies, Firms or Other Parties covered in the

register maintained u/s. 301 of the Companies Act, 1956 during the year under report. Consequently, no comments are necessary on Para (iii) (b), (c) & (d) of CARO.

(b) The Company has not taken any loans, secured or unsecured, from Companies, Firms or Other Parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Consequently, no comments are necessary on Para (iii) (e), (f) & (g) of CARO.

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

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that 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) 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 registers maintained under Section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Rule 2(b) of the Companies (Acceptance of Deposit) Rules, 1975. Hence, the Directives issued by RBI or provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 or the rules framed there under are not applicable.

(vii) The Company has appointed an independent firm of Chartered Accountants firm to carry out its Internal Audit Function. In our opinion and according to the information and explanations given to us, prima facie, the same is commensurate with the size of Company and nature of business.

(viii) We have broadly reviewed the cost records maintained by the company for its products pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed 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 cost records have been made and maintained. However, we have not made a detailed examination of these records with a view to determine whether they are accurate or complete.

(ix) (a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it. According to the information and explanations given to us, apart from the above, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other applicable material statutory liabilities were outstanding, as at 31st March, 2012 for a period of more than six months from the date they became payable.

(b) According to the records of the company, there are no dues of Sales Tax, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty, Cess or other applicable statutory liabilities which have not been deposited on account of any dispute except the following :

Sales Tax Demand of Rs. 3,10,023 for 2006-07

{ Appellate Order received in March 2012 and Company contemplating filing of appeal before Tribunal within 60 days }

Sales Tax Demand of Rs. 24,55,370 raised for 2007-08

{ Assessment Order received in March 2012. The Demand is expected to be reduced to approximately Rs. 8 lacs on giving effect to Appellate Order for 2006-07. Company has preferred further appeal before the Jr. Commissioner of Sales Tax (Appeals) }

(c) The Company had made a provision of Cess payable under the provisions of Research & Development Cess Act 1986 in the books of erstwhile Shilchar Payton Technologies Ltd. which was amalgamated with the Company w.e.f. 1st April, 2006, after which the liability was appearing in the books of the Company. The amount of such provision was Rs. 3,05,196 which was outstanding for a period of more than six months.

As explained to us, the said amount was not being deposited with RBI in view of a decision of High Court of Calcutta on the above matter and right of the RBI to appeal against the same.

During the year under report, the Company has determined that it is not liable to pay the above cess by obtaining a professional opinion on the same from an independent firm of chartered accountants, in view of which, the said amount has been written off as not being payable.

(x) The Company does not have any accumulated losses. The company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) 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 financial institutions or banks. The Company has not issued any debentures.

(xii) As per information given to us, during the year under report, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, considering the nature of activities carried on by the Company during the year, the Company is not a Chit fund or a Nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of CARO, 2003 are not applicable.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures or other investments. Accordingly, the Provisions of Clause 4 (xiv) of CARO, 2003 are not applicable.

(xv) As per the information and explanations given to us, the company not given guarantees for loans taken by others from Banks or Financial Institutions.

(xvi) Company has not taken or raised new term loans during the year under report.

(xvii) On the basis of review of utilization of funds which is based on an overall examination of the balance sheet of the Company, related information as made available to us and as represented to us by the Management, we report that as at the Balance Sheet date the funds raised on short-term basis were not been used for long-term investment.

(xviii) The company has not made preferential allotment of shares to parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

(xix) During the year under report, the company has not issued any debentures.

(xx) The Company has not raised any money through public issues during the year under report.

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

for, Naresh & Co.

Chartered Accountants

(F.R.N. 106928W)



Place : Vadodara CA Harin Parikh

Date : 12th May, 2012 Partner

(M. R. N. 107606)


Mar 31, 2010

We have audited the attached Balance Sheet of SHILCHAR TECHNOLOGIES LIMITED as at 31st March, 2010 and also the Profit & Loss Account for the year ended on that date annexed thereto and the Cash Flow Statement for the year ended on that date. These 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 presentations;We beliewthat ouraudit provides ^fe^sOnablesbasis for our opinion.

1. As required by the Companies (Auditors Report) Order, 2003 and Companies (Auditors Report) Order (Amendment), 2004 (hereinafter collectively referred to as CARO) issued by the Central Government in terms of section 227 (4A) of the Companies Act, 1$56, 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 ami 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 accountsas required by the law have been kept by the Company, so far as appears from our examination of the said books;

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

d) In our opinion, the BalanceSheet & the Ptbfit & Loss Account annexed thereto and the 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

e) On the basis of written representations received from the directors, as on 31st March, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director of the Company under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f) Subject to the foregoing, in our opinion and to the best of our information and according to the explanations given to us, the said Balance Sheet and the Profit & Loss Account and Cash Flow statement annexed thereto, read together with the significant accounting policies in Schedule "S" and the other notes appearing thereon, give the information as 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 31 st March, 2010,

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

(iii) in the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date

ANNEXURE TO AUDITORS REPORT (Referred to in paragraph 1 or our report of even date on the accounts for the year ended 31st March 2010 of Shilchar Technologies Limited)

(i) (a) The Company has maintained proper records showing full particulars including Quantitative Details for the last ten years. As informed to us, the Company is in the process of updating its old records as well as situation of Fixed Assets

(b) All the assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As informed to us, no material discrepancies were noticed on such verification.

(c) During the year, Company has not disposed off any of its assets, except an old parcel of land which was lying unused since long,

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

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

(c) On the basis of our examination of the reieords of inventory* we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in the books of accounts.

(iii) (a) The Company has not granted any loart, secured or unsecured, to Companies, Firms or Other Parties covered in the register maintained u/s. 301 of the Companies Act, i 956 during the year under report. Consequently, no comments ap necessary on Para (iii) (b), (c) & (d) of CARO.

(b) The Company has not taken any loans, secured or unsecured, from Companies, Firms or Other Parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, no comments are necessary on Para (i) (e), (f) & (g) of CARO.

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

(v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that 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) 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 registers maintained under Section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Rule 2(b) of the Companies (Acceptance of Deposit) Rules, 1975. Hence, the Directives issued by RBI or provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 or the rules framed thereunder are not applicable.

(vii) The Company has appointed an independent firm of Chartered Accountants from the current years to carry out the Internal Audit Function. In our opinion and according to the information and explanations given to us, the same is commensurate with the size of Company and nature of business.

(viii) As per the information and explanations given to us, most of the Companies products are not covered amongst the various products for which the Central Government has prescribed rules under clause (d) of sub-section (1) of section 209 of the Act, for maintenance of Cost Records. For the products of the Company that are covered 10 Crores and hence in the opinion of the Management the above rules are not applicable.

(ix) (a) According to the records of the Company* the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, EmployeesState Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it except Cess dues of the erstwhile Shilchar Payton Technologies Ltd. which was amalgamated with the Company w.e.f. 1st April, 2006. The Company has not deposited th* outstanding dues of Cess, to Reserve Bank of India, as payable under the provision offteseareh lopment Cess Act 1986. Such arrears, as outstanding for a period of more than six months as on the last day of financial year amounts to Rs. 305,196/-. As explained to us, the said amount has not been deposited with RBI in view of the Stay Order in the High Court Of Calcutta and the pending status of the appeal preferred against RBI in the matter.

According to the information and explanations given to us, apart from the above, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other applicable material statutory liabilities were outstanding, as at 31st March, 2010 fora period of more than six months from the date they became payable.

(b) According to the records of the company; there are no dues of Sales Tax, Income Tax, Service Tax, Customs Duty, Wealth Tax, Excise Duty, Cess or other applicable statutory liabilities which have not been deposited on account of any dispute except the following :

Income Tax Demand on Regular Assessment for AY 2007-08 - Rs. 3.60 Lacs. (Appeal Filed before the Commissioner of Income Tax Appeals, Vadodara)

Excise Duty Demand for reversal of credit for FY 2008-09 - Rs. 3.40 Lacs (Appeal Filed before the Asst. Commissioner of Central Excise, Vadodara)

(x) The Company does not have any accumulated losses. The company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

(xi) 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 financial institutions or banks. The Company has not issued any debentures.

(xii) As per information given to us, during the year under report, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, considering the nature of activities carried on by the Company during the year, the Company is not a Chit fund or a Nidhi / mutual benefit fund / society. Therefore, the provisions of Clause 4 (xiii) of CARO, 2003 are not applicable.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures or other investments. Accordingly, the Provisions of Clause 4 (xiv) of CARO, 2003 are not applicable.

(xv) As per the information and explanations given to us, the company not given guarantees for loans taken by others from Banks or Financial Institutions.

(xvi) Company has not taken or raised new term loans during the year under report.

(xvii) On the basis of revievv of utilization of funds which is based on an overall examination of the balance sheet of the Company, related information as made available to us and as represented to us by the Management, we report for that funds raised on short-term basis have not been used for long-term investment.

(xviii) The company has not made prefereriN^SiBo^^ntotShiares to parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956.

(xix) During the year under report, the company has not issued any debentures.

(xx) The Company has npt raised any money through public issues during the year under report.

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

For NARESH & CO. CHARTERED ACCOUNTANTS (F.R.N. 106928W)

CA HARIN PARIKH

PARTNER

(M. R. N. 107606)

Place: Bil, Dist. Vadodara Date : 28.04.2.010

 
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