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Auditor Report of Shree Rama Multi-Tech Ltd.

Mar 31, 2015

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Shree Rama Multi-tech Limited ('the Company'), which comprise the balance sheet as at 31 March 2015, the statement of profit and loss 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 STANDALONE FINANCIAL STATEMENTS

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

AUDITOR'S RESPONSIBILITY

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

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

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

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

BASIS FOR QUALIFIED OPINION:-

The Company has made borrowings in the form of loans, debentures etc.in earlier years which are under settlement. During the year the Company has not provided interest of Rs. 1206.51 lacs on such outstanding borrowings. The accumulated interest on such borrowings not provided for past several years up to 31/3/2015 is Rs. 16052.36 lacs. This matter is also qualified in our report on the Financial Statements for the year ended 31/3/2015.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the matter described in the Basis for qualified opinion paragraph above. If the provision for interest is made the loss for the current year would have increased by Rs.1206.51 lacs and accumulated losses upto 31/3/ 2015 would have increased by Rs. 16052.36 lacs and accordingly net loss for the current year would have been Rs. 2024.38 lacs and accumulated losses upto 31/3/2015 would have been Rs.67497.29 lacs, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its loss and its 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, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 3 and 4 of the Order, to the extent applicable.

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

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

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

(c) the balance sheet, the statement of profit and loss and the cash flow statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

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

(f) The qualification relating to non-provision of interest for the current year and earlier years are as stated in the basis for Qualified opinion paragraph above.

(g) We draw attention to note No 16 regarding revision in audited accounts on account of re- computation of depreciation on plant & machineries on account of redefining useful life of certain plant & machineries and accordingly depreciation of Rs 1589.94 lacs is charged to profit & loss account and Rs.377.51 lacs is charged to retained earnings, consequentially charge for the depreciation is lower by Rs 741.96 lacs and charge to retained earning is lower by Rs 1132.34 lacs and deferred tax assets has reduced by Rs 579.16 lacs as compared to earlier audited accounts.

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer Note 1 of 28B of to the financial statements;

ii. the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses and iii. There has been no delay in transferring amounts except annulled Dividend on Preference shares (as per note no. 28 [B] 3(b)), required to be transferred, to the Investor Education and Protection Fund by the Company.

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the financial statements for the year ended 31 March 2015, we report that :

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

The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of five years. In accordance with this programme, certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

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

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

(c) The Company has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) The company has not granted loans to body corporate covered in register maintained under section 189 of the Companies Act, 2013 ('the Act').

(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 purchase of inventory and fixed assets and sale of goods & services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The Company has not accepted any deposits from the public.

(vi) The Central Government has prescribed maintenance of Cost Records under section 148(1) of the Companies Act,2013 in respect of manufacturing activities of the Company. We have broadly reviewed the accounts and records of the Company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, ESIC, income tax, sales tax, wealth tax, Excise service tax, duty of customs, value added tax, cess and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities except small delay in few cases. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, Cess and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable except what is stated hereafter.

(b) According to the information and explanations given to us, there are no material dues of income tax, sales tax, and service tax value added tax, wealth tax, duty of customs and Cess which have not been deposited with the appropriate authorities on account of any dispute. However, according to information and explanations given to us, the following excise duty dues have not been deposited by the Company on account of disputes:

Nature of Nature of Amount Period to which the amount relates Statute dues (Lacs)

Central Excise Act, 1944 Excise Duty 3893.72 1999-00 to 2001-02 293.42 1998-99

Nature of Statute Forum where dispute is pending

Central Excise Act, 1944 Adjudicating Authority,

Gujarat High Court

(c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant to provisions of the companies Act, 2013 and rules there under transferred to such fund within time except dividend on preference shares as mentioned in note no. 28[B] 3(b).

(viii) The Company has accumulated losses at the end of the financial year and it has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(ix) The Company is regular in repayment of dues to bank and there is no default in repayment of dues.

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

(xi) The Company has term loans outstanding of Rs. 6000 lacs during the year and in our opinion and according to the information and explanation given to us the Company has applied the term loans prima facie for the purpose for which the loans were obtained.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For, Mahendra N. Shah & Co.

Chartered Accountants

FRN 105775 W

Place : Ahmedabad Chirag M. shah

Date : 03/08/2015 Partner

Memb. No. 045706


Mar 31, 2013

The accompanying abridged financial statements,which comprise the abridged Balance Sheet as at 31st March2013, the abridged Statement of Profit and Loss, the abridged Cash Flow statementfor the year ended 31s1 March, 2013 and related notes, are derived from the audited financial statements of Shree Rama Multi-tech Limited (''the company'')for the year ended 31s,March,2013. We expressed an unmodified audit opinion on those financial state- ments in our report dated 28th May,2013.

These abridged financial statements have been prepared by the Company pursuant to Rule 7 A of the Companies (Central Government''s) General Rules and Forms, 1956 and are based on the accounts of the Company for the year ended 31 March, 2013 prepared in accordance with Schedule VI to the Companies Act, 1956 and covered by our report dated 28th May, 2013 to the members of the Company.

The abridged financial statements do not contain all the disclosures required by the Accounting Standards re- ferred to in sub-section(3C) of Section 211 of the Companies Act,1956(''the act'')[applied in the preparation of the audited financial statements of the company]. Reading the abridged financial statements,thereof.is not a substi- tute for reading the audited financial statements of the Company.

Management''s Responsibility for the Abridged Financial Statements

Management is responsible for the preparation of a summary of the audited financial statements,on the basis described in Note 1 [A],

Auditor''s Responsibility

Our responsibility is to express an opinion on the abridged financial statement based on our procedures,which were conducted in accordance with the Standard on Auditing(SA) 810, ''Engagements to report on Summary Financial Statements'' issued by the Institute of Chartered Accountants of India.

Opinion

In our opinion.the abridged financial statements derived from audited financial statements of the company for the year ended 31 March,2013 are a fair summary of those financial statements,on the basis described in Note 1[A] and read with following:

(i) Sub note no. 3(b) in Note no. 28[B] regarding non transfer of unpaid dividend of Rs.100 Lacs on prefer- ence shares for the year 2000-01 to Unpaid Dividend Account in a Scheduled Bank as required under Section 205A of the Act & to Investor Education & Protection fund as per Section 205C of the Act.

(ii) Sub Note no. 4.4 of Note 28[B] regarding Accounting treatment of Waiver of Loans etc. of Rs. 12521.78 lacs.

(iii) Sub Note No. 6 of Note 28[B] regarding non provision of interest on borrowings and Debentures of Rs.1,460.59 Lacs for the current year and Rs. 15,022.95 Lacs unpaid interest for the period up to 31-03- 2012 aggregating to Rs. 16,483.54 Lacs up to 31.3.2013. If the above provision is made in respective years, the Loss for the current year would have been Rs.3,453.65 Lacs and aggregate loss to be carried forward would have been Rs.70,181.33 Lacs

The Annexure referred to in paragraph 1 of the Our Report of even date to the members of Shree Rama Multi-Tech Limited on the accounts of the company for the year ended 31s'' March, 2013.

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

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

(b) The fixed assets are being physically verified by the management during the year according to a phased programme designed to cover all the items over a period of five years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and we have been informed that no material discrepancies between the book records and the physical verification have been noticed.

(c) During the year the company has disposed off/discarded/impaired fixed assets having book value Rs.2664.52 lacs, without affecting status of the company as going concern.

ii. (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory. As informed, there was no material discrepancies noticed on such physical verification as compared to the book records.

lii (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. According to the information and explanations provided by the management, there has been no contract or arrangement the particulars of which are required to be entered into the register maintained under section 301 of the Companies Act, 1956.

vi. Accordingly to the information and explanations given to us, the Company has not accepted any deposit from the public during the year.

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

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

ix. (a) The Company has been generally regular in depositing statutory dues including provident fund, employees'' state insurance, income-tax, VAT, custom duty, excise duty, Service Tax, cess and other material statutory dues with the appropriate authorities except small delays in a few cases.

x. The Company''s accumulated losses at the end of the financial year are more than its net worth. The company has filed application in BIFR for registration as "Sick company" which BIFR has rejected & on Appeal, AAIFR has given decision in favour of the company & matter is pending before BIFR. However, the Company has not incurred cash losses in the current and immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in repayment of Principle dues of Rs. 10257.80 Lacs & interest thereon aggregating to Rs. 16483.54 Lacs up to 31.03.2013 to lenders.

xii. According to the information and explanations given to us and based on the documents and records produced, 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, the Company is not a chit fund or a nidhi / mutual benefit fund / society and therefore, the provisions of clause 4 (xiii) of the Order are not applicable.

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

xv. According to the information and explanations given to us, the Company had given guarantees for loans taken by East West Polyart Limited & Ideal Petro Products Limited from banks and financial institutions in earlier years, terms and conditions whereof based on the management representation and considering the business relationship with this company, were not prima-facie prejudicial to the interest of the Company. Suits for recovery of dues are filed in Debt Recovery Tribunal & Courts against the company being a guarantor. (See Sub Note 2(a) of Note 28B)

xvi. On the basis of the records examined by us and according to information and explanations given to us, no term loans were obtained by the Company during the year under audit.

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

xviii.During the year the Company has not made allotment of shares on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, during the year covered by our audit, the company has not issued debentures requiring creation of any security or charge.

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

xxi. Based upon the audit procedures performed and on the basis of 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 out audit.

For, Mahendra N. Shah & Co.

Chartered Accountants

FRN 105775 W

Place : Ahmedabad Chirag M. shah

Date : 28th May, 2013 Partner

Memb. No. 045706


Mar 31, 2012

The accompanying abridged financial statements, which comprise the abridged Balance Sheet as at 31stMarch2012, the abridged Profit and Loss account, the abridged Cash Flow Statement for the year ended 31s1 March, 2012 and related notes, are derived from the audited financial statements of Shree Rama Multi-tech Limited ('the company')for the year ended 31st March,2012. We expressed an unmodified audit opinion on those financial statements in our report dated 28th May,2012.

These abridged financial statements have been prepared by the Company pursuant to Rule 7A of the Companies (Central Government's) General Rules and Forms, 1956 and are based on the accounts of the Company for the year ended 31st March, 2012 prepared in accordance with Schedule VI to the Companies Act, 1956 and covered by our report dated 28th May, 2012 to the members of the Company.

The abridged financial statements do not contain all the disclosures required by the Accounting Standards referred to in sub-section(3C) of Section 211 of the Companies Act,1956('the act')[applied in the preparation of the audited financial statements of the company]. Reading the abridged financial statements, thereof, is not a substitute for reading the audited financial statements of the Company.

Management's Responsibility for the Abridged Financial Statements

Management is responsible for the preparation of a summary of the audited financial statements, on the basis described in Note 1 [A],

Auditor's Responsibility

Our responsibility is to express an opinion on the abridged financial statement based on our procedures, which were conducted in accordance with the Standard on Auditing(SA) 810, 'Engagements to report on Summary Financial Statements' issued by the Institute of Chartered Accountants of India. -

Opinion

In our opinion, the abridged financial statements derived from audited financial statements of the company for the year ended 31s* March,2012 are a fair summary of those financial statements, on the basis described in Note 1[A] and read with following:

(i) Sub note no. 3(b) in Note no. 1[B] regarding non transfer of unpaid dividend of Rs.100 Lacs on preference shares for the year 2000-01 to Unpaid Dividend Account in a Scheduled Bank as required under Section 205A of the Act & to Investor Education & Protection fund as per Section 205C of the Act.

(ii) Sub Note no. 4.4 of Note 1 [B] regarding Accounting treatment of Waiver of Loans etc. of Rs.5828.14 lacs,

(iii) Sub Note No. 6 of Note 1 [B] regarding non provision of interest on borrowings of Banks, Financial Institution, Debentures of Rs.3816.27 Lacs for the current year and Rs.47963.00 Lacs unpaid interest for the period up to 31 -03-2011 aggregating to Rs. 51779.27 Lacs up to 31.3.2012. If the above provision is made in respective years, the loss for the current year would have been Rs. 3777.05 Lacs and aggregate loss to be carried forward would have been Rs.103484.01 Lacs.

Annexure referred to in paragraph 3 of our report of even date Shree Rama Multi-Tech Limited

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

(b) The fixed assets are being physically verified by the management during the year according to a phased programme designed to cover all the items over a period of five years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and we have been informed that no material discrepancies between the book records and the physical verification have been noticed.

(c) There was no substantial disposal of fixed assets during the year.

ii. (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory. As informed, there was no material discrepancies noticed on such physical verification as compared to the book records.

iii (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered-, in the register maintained under section 301 of the Companies Act, 1956.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. According to the information and explanations provided by the management, there has been no contract or arrangement the particulars of which are required to be entered into the register maintained under section 301 of the Companies Act, 1956.

vi. Accordingly to the information and explanations given to us, the Company has not accepted any deposit from the public during the year.

vii. In our opinion, the internal audit function carried out during the year by a firm ot Chartered Accountants appointed by the management, has been commensurate with the size and nature of its business.

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

ix. (a) The Company has been generally regular in depositing statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, custom duty, excise duty, cess and other material statutory dues with the appropriate authorities except small delays in a few cases.

(b) According to the records of the Company, the dues in respect of Income tax, Excise-duty, Cess on account of any dispute, are as follows:

Nature of Statute Year Amount (Rs.) Forum where dispute is pending

Central Excise (1)1999-00 to 2001-02 3893.72 Lacs CESTAT - Act, 1944 (2)1998-99 293.42 Lacs Gujarat High Court

x. The Company's accumulated losses at the end of the financial year are more than its net worth. The company has filed application in BIFR for registration as "Sick company" which BIFR has rejected & on Appeal, AAIFR has given decision in favour of the company & matte* is pending before BIFR. However, the Company has not incurred cash losses in the current and immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in repayment of Principle dues of Rs. 28209.20 Lacs & interest thereon aggregating to Rs.51779.00 Lacs up to 31.03.2012 to domestic Financial Institutions, Banks and Debenture Holders.

xii. According to the information and explanations given to us and based on the documents and records produced, 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, the Company is not a chitfund or a nidhi / mutual benefit fund / society and therefore, the provisions of clause 4 (xiii) of the order are not applicable.

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

xv. According to the information and explanations given to us, the Company had given guarantees for loans taken by East West Polyart Limited & Ideal Petro Products Limited from banks and financial institutions in earlier years, terms and conditions whereof based on the management representation and considering the business relationship with this company, were not prima-facie prejudicial to the interest of the Company. Suits for recovery of dues are filed in Debt Recovery Tribunal & Courts against the company being a guarantor. (See Sub Note 1 & 2)

xvi. On the basis of the records examined by us and according to information and explanations given to us, no term loans were obtained by the Company during the year under audit.

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

xviii. During the year the Company has pot made allotment of shares on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, during the year covered by our audit, the company has not issued debentures requiring creation of any security or charge.

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

xxi. Based upon the audit procedures performed and on the basis of 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 out audit.

For, Mahendra N. Shah & Co.

Chartered Accountants

FRN 105775 W

Place : Ahmedabad Chirag M. shah

Date : 28th May, 2012 Partner

Memb. No. 045706


Mar 31, 2011

1. We have audited the attached Balance Sheet of Shree Rama Multi-Tech Limited as at 31st March 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order,2003,(as amended) (hereinafter referred to as "the order") issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 (hereinafter referred to as "the Act") we enclose in the Annexure statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

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

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

(c) The 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, the Profit and Loss Account and the Cash Flow Statement dealt with by this reportcomply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

(e) On the basis of the written representation received from the Directors as on 31s,March 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Act.

(f) We invite attention to note no. 3(H) in Schedule 21B regarding non transfer of unpaid dividend of Rs. 100 Lacs on preference shares for the year 2000-01 to Unpaid Dividend Account in a Scheduled Bank as required under Section 205A of the Act & to Investor Education & Protection fund as per Section 205C of the Act.

(g) In our opinion and as per the information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account subject to :

Note No. 6 of Schedule 21B regarding non provision of interest on borrowings of Banks, Financial Institution, Debenture of Rs.50.54 Crores for the current year and Rs. 429.09 Crores unpaid interest for the period up to 31- 03-2010 aggregating to Rs. 479.63 Crores up to 31.3.2011. If the above provision is made in respective years the loss for the current year would have been Rs. 31.74 Crores and aggregate loss to be carried forward would have been Rs. 997.07 Crores read with significant accounting policies and Notes on Accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fairview in the conformity with the accounting principles generally accepted in India :

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

(ii) in the case of 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 referred to in paragraph 3 of our report of even date Shree Rama Multi-Tech Limited

i. (a) The Company has maintained records showing particulars, including quantitative details and situa- tion of fixed assets.

(b) The fixed assets are being physically verified by the management during the year according to a phased programme designed to cover all the items over a period of five years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and we have been informed that no material discrepancies between the book records and the physical verification have been noticed disregarding certain assets in the form of moulds & dies etc. which are treated as integral part of principal Plant & Machinery.

(c) There was no substantial disposal of fixed assets during the year.

ii. (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory. As informed, there was no material dis- crepancies noticed on such physical verification as compared to the book records.

iii (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. According to the information and explanations provided by the management, there has been no contract or arrangement the particulars of which are required to be entered into the register maintained under section 301 of the Companies Act, 1956.

vi. Accordingly to the information and explanations given to us, the Company has not accepted any deposit from the public during the year.

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

viii. 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.

ix. (a) The Company has been generally regular in depositing statutory dues including provident fund, em- ployees' state insurance, income-tax, sales-tax, custom duty, excise duty, cess and other material statutory dues with the appropriate authorities except small delays in a few cases.

(b) According to the records of the Company, the dues in respect of Income tax, Excise-duty, Cess on account of any dispute, are as follows:

Nature of Statute Year Amount (Rs.) Forum where dispute is pending

Income tax Act, 1961 2001-02 9,82,28,856 Income-tax Appellate Tribunal

Income tax Act, 1961 1998-99 2,36,12,614 Income-tax Appellate Tribunal

Central Excise Act, 1944 (1)1999-00 to 2001-02 38,93,71,627 Cestat

(2)1998-99 1,61,97,773 Hon'ble Gujarat High Court

x. The Company's accumulated losses at the end of the financial year are more than its net worth. The company has filed application in BIFR for registration as "Sick company" which BIFR has rejected & on Appeal, AAIFR has given decision in favour of the company & matter is pending before BIFR. However, the Company has not incurred cash losses in the current and immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in repayment of Principle dues of Rs. 369.58 Crores & interest thereon aggregating to Rs.479.63 Crores up to 31.03.2011 to domestic Financial Institutions, Banks and Deben- ture Holders:

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

xiil. In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society and therefore, the provisions of clause 4 (xiii) of the Order are not applicable.

xiv. In out opinion, the Company is not dealing or trading in shares, securities and other investments. Ac- cordingly, the provisions of clause 4(xiv) of the Order are not applicable.

xv. According to the information and explanations given to us, the Company had given guarantees for loans taken by East West Polyart Limited & Ideal Petro Products Limited from banks and financial institutions in earlier years, terms and conditions whereof based on the management representation and consider- ing the business relationship with this company, were not prima-facie prejudicial to the interest of the Company. Suits for recovery of dues are filed in Debt Recovery Tribunal & Courts against the company being a guarantor. (See Note 1 & 2 of Schedule 21B)

xvi. On the basis of the records examined by us and according to information and explanations given to us, no term loans were obtained by the Company during the year under audit.

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

xviii. During the year the Company has not made allotment of shares on preferential basis to parties and companies covered in trie register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, during the year covered by our audit, the company has not issued debentures requiring creation of any security or charge.

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

xxi. Based upon the audit procedures performed and on the basis of 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 out audit.

For, Mahendra N. Shah & Co.

Chartered Accountants

FRN 105775 W

Place : Ahmedabad Mahendra N. shah

Date : 30/06/2011 Partner

M. No. 003969


Mar 31, 2010

1. We have audited the attached Balance Sheet of Shree Rama Multi-Tech Limited as at 31st March 2010, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order,2003,(as amended) (hereinafter referred to as "the order") issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 (hereinafter referred to as "the Act") we enclose in the Annexure statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

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

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

(c) The 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, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

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

(f) We invite attention to note no. 3(ii) in Schedule 21B regarding non transfer of unpaid dividend of Rs.100 Lacs on preference shares for the year 2000-01 to Unpaid Dividend Account in a Schedule Bank as required under Section 205A of the Act & to Investor Education & Protection fund as per Section 205C of the Act.

(g) In our opinion and as per the information and according to the explanations given to us, the said Balance Sheet and the Profit and Loss Account subject to :

Note No. 7 of Schedule 21B regarding non provision of interest on borrowings of Banks, Financial Institution, Debenture of Rs.52.78 Crores for the current year and Rs. 376.31 Crores unpaid interest for the period up to 31-03-2009 aggregating to Rs. 429.09 Crores. If the above provision is made in respective years the Profit for the current year would have been Rs. 9.36 Crores and aggregate loss to be carried forward would have been Rs. 965.34 Crores read with significant accounting policies and Notes on Accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in the conformity with the accounting principles generally accepted in India :

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

(ii) in the case of 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 referred to in paragraph 3 of our report of even date Shree Rama Multi-Tech Limited

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

(b) The fixed assets are being physically verified by the management during the year according to a phased programme designed to cover all the items over a period of five years, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and we have been informed that no material discrepancies between the book records and the physical verification have been noticed.

(c) There was no substantial disposal of fixed assets during the year.

ii. (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory. As informed, there was no material discrepancies noticed on such physical verification as compared to the book record.

iii. (a) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

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 purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

v. According to the information and explanations provided by the management, there has been no contract or arrangement the particulars of which are required to be entered into the register maintained under section 301 of the Companies Act, 1956.

vi. Accordingly to the information and explanations given to us, the Company has not accepted any deposit from the public during the year.

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

viii. 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.

ix. (a) The Company has been generally regular in depositing statutory dues including provident fund, employees state insurance, income-tax, sales-tax, custom duty, excise duty, cess and other material statutory dues with the appropriate authorities except small delays in a few cases.

(b) According to the records of the Company, the dues in respect of Income tax, Excise-duty, Cess on account of any dispute, are as follows:

Nature of Statute Year Amount (Rs.) Forum where dispute is pending

Income tax Act, 1961 2001-02 9,82,28,856 Commissioner of Income tax (Appeals)

Income tax Act, 1961 2003-04 2,89,39,072 Commissioner of Income tax (Appeals)

Income tax Act, 1961 2004-05 1,77,74,855 Commissioner of Income tax (Appeals)

Income tax Act, 1961 1998-99 2,36,12,614 Income-tax Appellate Tribunal

Central Excise Act, 1944 (1)1999-00 to 2001-02 38,93,71,627 Cestat

(2) 2004-05 2,62,89,446 Cestat

(3) 1996-97 45,29,302 Honble Gujarat High Court

(4) 2006-07& 2007-08 25,90,786 Honble Gujarat High Court (5)1998-99 1,61,97,773 Honble Gujarat High Court

x. The Companys accumulated losses at the end of the financial year are more than its net worth. The company has filed application in BIFR for registration as "Sick company" which BIFFt has rejected & on Appeal, AAIFR has given decision in favour of the company & matter is pending before BIFR. However, the Company has not incurred cash losses in the current and immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, the Company has defaulted in repayment of Principle dues of Rs. 377.91 Crores & interest thereon of Rs.429.09 Crores up to 31.03.2010 to domestic Financial Institutions, Banks and Debenture Holders.

xii. According to the information and explanations given to us and based on the documents and records produced, 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, the Company is not a chit fund or a nidhi / mutual benefit fund / society and therefore, the provisions of clause 4 (xiii) of the Order are not applicable.

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

xv. According to the information and explanations given to us, the Company had given guarantees for loans taken by East West Polyart Limited & Ideal Petro Products Limited from banks and financial institutions in earlier years, terms and conditions whereof based on the management representation and considering the business relationship with this company, were not prima-facie prejudicial to the interest of the Company. Suits for recovery of dues are filed in Debt Recovery Tribunal & Courts against the company being a guarantor. (See Note 1 & 2 of Schedule 21B)

xvi. On the basis of the records examined by us and according to information and explanations given to us, no term loans were obtained by the Company during the year under audit.

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

xviii. During the year the Company has not made allotment of shares on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. According to the information and explanations given to us, during the year covered by our audit, the company has not issued debentures requiring creation of any security or charge.

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

xxi. Based upon the audit procedures performed and on the basis of 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 out audit.

For, Mahendra N. Shah & Co.

Chartered Accountants

FRN 105775 W

Place : Ahmedabad Mahendra N. shah

Date : 29/06/2010 Partner M. No. 003969

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