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Auditor Report of Somany Ceramics Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of SOMANY CERAMICS LIMITED ("the Company"), which comprise the Balance Sheet as at 3161 March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the 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 of these standalone 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 standalone 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 standalone 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 standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone 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 standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of 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 standalone 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone 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 3161 March, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of audit, we give in the Annexure A'' a statement on the matters specified in the paragraphs 3 and 4 of the Order.

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

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

(b) In our opinion, proper books of account as required by law have been kept by the Company sofar 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 standalone 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 31st March, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) As required by section 143(3)(i) of the Companies Act, 2013, and based on the checking of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, our separate report with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls is as per Annexure ''B''.

(g) 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 standalone financial statements - refer Note no. 28.1, 28.2 & 28.3 to the standalone financial statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivatives contracts.

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure-A referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date on the Standalone Financial Statements of Somany Ceramics Limited for the year ended 31st March,2016

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

(b) The fixed assets have been physically verified by the management according to the programme of periodical verification in phased manner which in our opinion is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such physical verification were not material.

(c) As per the records and information and explanations given to us, title deeds of immovable properties are in the name of the Company.

2. The inventories of the Company (except stock in transit, which has been verified from receipt of material) have been physically verified by the management at reasonable intervals and the procedures of physical verification of inventory followed by the Management are reasonable in relation to the size of the Company and nature of its business. The discrepancies noticed on such physical verification of inventory as compared to book records were not material.

3. (a) The company has granted unsecured loan to one company covered in the register maintained in section 189 of the act; according to the information and explanations made available to us and based on the audit procedures conducted by us, we are of the opinion that terms and conditions of loan so granted are not prejudicial to the interest of the company.

(b) In respect of aforesaid loan; there is no default in repayment of principal amount, and ii) interest receipt is also regular,

(c) In respect of aforesaid loan the repayment of principal and interest thereon is regular.

4. According to the information, explanations and representations provided by the management and based upon audit procedures performed, we are of the opinion that in respect of loans, investments, guarantees and security, the company has complied with the provisions of the Section 185 and 186 of the Act.

5. The company has not accepted any deposits from the public in accordance with the provisions of section 73 to 76 of the Act and the rules framed there under.

6. The maintenance of cost records has not been prescribed by the Central Government under the section 148(1) of the Act read with companies (Cost Records and Audit) Rules, 2014 for the goods/product manufactured by the Company.

7. (a) According to the records of the Company, the Company is regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of custom, duty of excise, value added tax and other material statutory dues with the appropriate authorities to the extent applicable and there are no undisputed statutory dues payable for a period of more than six months from the date they become payable as at 31st March, 2016.

(b) According to the records and information & explanations given to us, the details of disputed dues in respect of income tax, sales tax, duty of custom, service tax and duty of excise that have not been deposited with the appropriate authority on account of dispute and the forum where the dispute is pending are given below: -

Name of Statue Nature of Dues Period to which it Amount Forum where dispute is pending relates (Rs. in Lacs)

Custom Act Custom Duty 1997-1999 5.91 Deputy Commissioner of Customs, (Import) Tughlakabad

Central Excise Duty Excise Duty 2005-2007 13.04 CESTAT, New Delhi

1996-2000 9.33 CCE Appeals, Ahemdabad

1994-1995 0.07 Asst. Commissioner, Kalol

Sales Tax Act Local Area Development 2002-2003 5.15 Haryana Tax Tribunal, Chandigarh Tax

2006-2007 60.12 Supreme Court of India

2007-2008 76.40 Supreme Court of India

2008-2009 89.27 Supreme Court of India

2009-2010 93.56 Supreme Court of India

2010-2011 59.62 Supreme Court of India

2011-2012 60.16 Supreme Court of India

2012-2013 73.54 Supreme Court of India 2013-2014 85.48 Supreme Court of India

2014-2015 72.77 Supreme Court of India

2015-2016 55.45 Supreme Court of India

Entry Tax 2013-2016 28.08 High Court of Kolkata

Turnover Tax 1990-1993 45.83 Maharashtra Sales Tax Tribunal , Mumbai

2006-2007 52.61 Asst. Commissioner, Ahemdabad

2007-2008 28.76 Joint. Commissioner, Commercial Taxes, Ahmedabad

2011-2012 27.77 Deputy Commissioner, Commercial Taxes, Ahmedabad

2013-2014 97.23 Deputy Excise & Taxation Commissioner cum assessing Authority, Jhajjar

Finance Act Service Tax 2007-2009 2.80 Asstt. Commissioner, Rohtak

2008-2009 5.42 Commissioner of Central Appeals, Rohtak Income Tax Act* Income Tax A.Y. 2010-11 63.36 CIT Appeals, Kolkata

* excluding penalty if any (Refer note no. 28.1)

8. In our opinion, on the basis of audit procedures and according to the information and explanations given to us, the Company has not defaulted in repayment of loans and borrowings to financial institutions, banks, government (both State and Central). The company did not have any outstanding debentures during the year.

9. On the basis of information and explanations given to us, term loans have been applied for the purposes for which they were obtained. The company did not raise any money by way of initial / further public offer.

10. Based on the audit procedure performed and on the basis of information and explanations provided by the management, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the course of the audit.

11. On the basis of records and information and explanations made available and based on our examination of the records of the company, the company has paid/ provided managerial remuneration, in accordance with the requisite approvals mandated under Section 197 read with Schedule V of the Act (refer note no. 28.30).

12. The Company is not a chit fund or a nidhi /mutual benefit fund /society, therefore, the provisions of clause 4 (xii) of the said Order are not applicable to the Company, hence we are not offering any comment.

13. As per the information and explanations and records made available by the management of the Company and audit procedure performed, for the related parties transactions entered during the year, the Company has complied with the provisions of Section 177 and 188 of the Act, where applicable. As explained and as per records / details there lated parties transactions have been disclosed as per the applicable accounting standards.

14. As stated in the note no. 28.06 during the year, the company has made preferential issue and complied with the provisions of section 42 of the Act and money received of the issue has been utilized for the purpose the issue was made except to the extent stated in the said note. Further, according to the information and explanations given to us, the Company has not made any other preferential allotment/private placement of shares and/or any fully/ partly convertible debentures during the year.

15. On the basis of records made available to us and according to information and explanations given to us, the Company has not entered into non-cash transactions with the directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

16. The company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934, as the provision of section is not applicable to the Company.



For LODHA & CO.,

Chartered Accountants

Firm''s Registration No. 301051E



(N. K. LODHA)

Place: New Delhi (Partner)

Date: 21st May, 2016 Membership No.: 85155


Mar 31, 2015

We have audited the accompanying Standalone Financial Statements of Somany Ceramics Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the 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 of these Standalone 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 judgements 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 Standalone 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 standalone 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 Standalone Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Standalone Financial Statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Standalone 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 Standalone 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 Standalone 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone 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 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us during the course of audit, we give in the Annexure a statement on the matters specified in the paragraphs 3 and 4 of the order.

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss, and 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 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) with respect to the other matters to be included in the Auditor''s report in accordance with rule 11 of the Companies (Audit and auditors) rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its Standalone Financial Statements - Refer Note No. 27.1, 27.2 & 27.6 [and read with note no. 27.3 as stated in para (ii) below] to the Standalone Financial Statements.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts; except to the extent and as explained in Note No. 27.3 of the Standalone Financial Statements.

iii. There has been no delay in transferring amounts, required to be transferred, to the investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date for the year ended 31st March 2015

1. (a) The company has maintained proper records showing full

particulars, including quantitative details and situation of fixed assets except in case of certain locations where records are in process of updation / compilation.

(b) As per the information and explanations given to us, certain fixed assets have been physically verified by the management according to a regular programme of periodic verification in a phased manner which in our opinion is reasonable having regard to the size of the company and nature of fixed assets. The discrepancies noticed on such physical verification have been dealt within the books of accounts.

2. (a) As per the information and explanations given to us, the inventories (except stocks- in- transit which have been verified based on subsequent receipt/ reconciliation) have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory 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 (in respect of process stock records are updated after physical verification). The discrepancies noticed on such physical verification of inventory as compared to book records were not material which have been properly dealt with.

3. As informed to us, the Company has granted unsecured loan to one party covered in the register maintained under Section 189 of the Companies Act, 2013.

(a) In this regard, the receipt of principal as well as interest is regular; and

(b) Furthermore, no amount, principal as well as interest is overdue and therefore provision of clause 3(iii)(b) of the order is not applicable.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that certain items purchased/sold are of special nature for which, as explained, suitable alternatives sources do not exist for obtaining comparative quotations, taking in to consideration the quality, usage and such other factors, there are adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further on the basis of examination of the books and records of the company, carried out in accordance with the generally accepted auditing principles in India, and according to the information and explanation given, we have neither come across nor have we been informed of any instance of major weakness in internal control systems of the company.

5. In our opinion and according to the information and explanations given to us, the Company has complied with the directive issued by the Reserve Bank of India and the provisions of Section 73 to 76 of the Act or any other relevant provisions of the Act and the rules framed there under (to the extent applicable) with regard to deposit accepted from the public. We have been informed that no order has been passed by the Company Law Board or National Company law Tribunal or Reserve Bank of india or any Court or other tribunal in this regard.

6. The maintenance of cost records has not been prescribed by the Central Government under the section 148(1) of the Companies Act 2013 read with companies (Cost records and Audit) rules, 2014 for the goods/product manufactured by the Company.

7. (a) According to the records and information made available to us,

the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income- tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax cess and any other material statutory dues to the extent applicable to it and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2015 except in respect of Employee state insurance for RS. 0.64 lacs.

(b) According to the records and information and explanations given to us, there are no dues in respect of wealth tax and cess that have not been deposited with appropriate authorities on account of disputes and dues in respect of income tax, customs duty, excise duty, service tax,and sales tax (including Turnover tax) that have not been deposited with appropriate authorities on account of disputes and the forum where the dispute is pending are as given below:

Name of Statue Nature of Dues Period to which it relates

Custom Act Custom Duty 1997 - 1999

Central Excise Excise duty 1999 - 2004 Act 2005 - 2007

1996 - 2000

1994 - 1995

2002 - 2003

Sales Tax Act LocalArea 2006 - 2007 Development Tax

2007 - 2008

2008 - 2009

2009 - 2010

2010 - 2011

2011 - 2012

2012 - 2013

2013 - 2014

2014 - 2015

Turnover Tax 1990 - 1993

2006 - 2007

2007 - 2008

Finance Act Service Tax 2007 - 09

Income Tax Act* Income Tax A.Y. 2010-11

A.Y. 2011-12

A.Y. 2012-13



Name of Statue Amount (RS. in Lacs) Forum where dispute is pending

Custom Act 5.91 Deputy Commissioner of Customs, (Import) Tughlakabad

Central Excise 317.43 CESTAT, New Delhi Act 13.04 CESTAT, New Delhi

9.33 CCE Appeals, Ahemdabad

0.07 Asst. Commissioner, Kalol

5.15 Haryana Tax Tribunal, Chandigarh

Sales Tax Act 60.12 Supreme Court of India

76.40 Supreme Court of India

89.27 Supreme Court of India

93.56 Supreme Court of India

59.62 Supreme Court of India

60.16 Supreme Court of India

73.54 Supreme Court of India

85.48 Supreme Court of India

72.77 Supreme Court of India

45.83 Maharashtra Sales Tax Tribunal ,Mumbai

52.61 Asst. Commissioner, Ahemdabad

28.76 Joint. Commissioner, Commercial Taxes, Ahmedabad

Finance Act 2.80 Asstt. Commissioner, Rohtak

Income Tax Act* 63.36 CIT Appeals, Kolkata

5.72 CIT Appeals, Kolkata

20.15 CIT Appeals, Kolkata



* Excluding penalty if any (Refer note no. 27.1)

(c) According to the records of the Company, there was no amounts required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder.

8. The company does not have accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

9. Based on our audit procedures and on the information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institution, banks or debenture holders.

10. The Company has given corporate guarantees for loans taken by other body corporates outstanding amount aggregating to Rs. 3434.00 lacs from banks. According to the information and explanations given to us, we are of the opinion that the terms and conditions, on which the company has given corporate guarantees for loans taken from banks, are not, prima- facie prejudicial to the interest of the Company.

11. According to the information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

12. During the course of our examination of the books and records of the company carried out in accordance with the auditing standards generally accepted in India, we have neither come across any material instance of fraud on or by the company, noticed nor reported during the year nor we have been informed of such case by the management.

For LODHA & CO., Chartered Accountants Firm Registration Number: 301051E

N.K. LODHA (partner) Membership No: 85155 place: New Delhi Date: The 18th day of May, 2015


Mar 31, 2013

Report on the financial statements

We have audited the accompanying financial statements of Somany Ceramics Limited,which comprise the balance sheet as at 31stMarch 2013, and the statement of the profit and loss and the cash flow statement for the year then ended, and a summary of the 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 the 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 accounting standards referred to in sub section (3C) of section 211 of the Companies Act, 1 956("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 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 Institute of Chartered Accountant of India. Those standards require that we comply with the ethical requirements and plan and perform the audit to obtain the reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including assessment of 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 the 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 audit opinion.

Opinion

In our opinion and best to our information and according to the explanations given to us, the financial statements read together with note no. 2.5 and other notes thereon, give the information required by Act in the manner so require 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 the affairs of the company as at 31stMarch 2013,

b. In case of the statement of the profit and loss, of the profit for the year ended on that date, and

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

Report on other legal and the regulatory requirements:

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

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

a. We have obtained all the information and explanations which, to the best of our knowledge and belief, were necessary for the 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 appears from our examination of those books;

c. The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report are in agreement with the books of account;

d. In our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement referred to in this report comply with the Accounting Standards referred to in sub-section(3C) of section211 of Companies Act,1956;

e. On the basis of the written representations received from the Directors and taken on records by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31stMarch 2013 from being appointed as a Director of the Company in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

1. (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets except in case of certain locations where records are in process of updation / compilation.

(b) As per the information and explanations given to us, certain fixed assets have been physically verified by the management according to a regular programme of periodic verification in a phased manner which in our opinion is reasonable having regard to the size of the company and nature of fixed assets. The discrepancies noticed on such physical verification were not material.

(c) As per records and information and explanation given to us, no substantial part of fixed assets has been disposed off during the year.

2. (a) As per the information and explanations given to us, the inventories (except stocks with third parties and in transit which have been verified based on subsequent receipt/ reconciliation) have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory 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 (in respect of process stock records are updated after physical verification). The discrepancies noticed on such physical verification of inventory as compared to book records were not material which have been properly dealt with.

3. (a) As informed to us, the Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Hence clause (b) to (d) is not applicable. Accordingly we are not able to offer any comment.

(b) As per the information and records made available, the Company has not taken any loans secured or unsecured from companies, firms or other parties except from one company covered in the register maintained under section 301 of the Act. The maximum amount involved during the year is Rs. 75.00 Lacs and the year end balance of such loans are Rs. NIL.

(c) In our opinion, the rate of interest and other terms and conditions of loans taken are not prima facie prejudicial to the interest of the Company.

(d) In accordance with the information and explanations given to us in respect of the aforesaid loans, there is no as such stipulated schedule for repayment of principal and interest and the same are repayable on demand.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that certain items purchased/ sold are of special nature for which, as explained, suitable alternatives sources do not exist for obtaining comparative quotations, taking in to consideration the quality, usage and such other factors, there are adequate internal control systems (read with note no. 2.6 & 2.16) commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods and services. Further on the basis of examination of the books and records of the company, carried out in accordance with the generally accepted auditing principles in India, and according to the information and explanation given, we have neither come across nor have we been informed of any instance of major weakness in internal control systems of the company.

5. (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 such contracts or arrangements (exceeding the value of Rs. 5 lacs in respect of any party during the financial year) have been made at prices which are generally reasonable having regard to prevailing market prices at the relevant time (read with para 4 above).

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 58A and 58AA or any other relevant provisions of the Act and rules framed there under. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Company''s products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

9. (a) According to the records and information made available to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues to the extent applicable to it and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 2013.

(b) According to the records and information and explanations given to us, there are no dues in respect of income tax, wealth tax, service tax, custom duty excise duty and cess that have not been deposited with appropriate authorities on account of disputes and dues in respect of customs duty excise duty, service tax, local area development tax and sales tax including Turnover tax that have not been deposited with appropriate authorities on account of disputes and the forum where the dispute is pending are as given below:

Name of Statute Nature of Dues Period to which it relates Amount (Rs. in Lacs)

Custom Act Custom Duty 1997-1999 5.91

Central Excise Act Excise duty 1999-2004 317.43

2005-2007 13.04

1996-2000 9.33

1994-1995 0.07

2002-2003 5.15

Sales Tax Act Local Area 2006-2007 60.12 Development Tax 2007-2008 76.40

2008-2009 89.27

2009-2010 93.56

2010-2011 59.62

2011-2012 60.16

2012-2013 73.54

Turnover Tax 1990-1993 45.83

2006-2007 52.61

2007-2008 28.76

2009-2010 6.33

Finance Act Service Tax 2007-2008 0.74

2007-2009 2.80

Income Tax Act* Income Tax 2004-2005 113.79

2006-2007 5.00

2008-2009 5.55

2009-2010 42.51

2010-2011 63.36

Name of Statute Forum where dispute is pending

Custom Act Deputy Commissioner of Customs,(Import) Tughlakabad

Central Excise Act CESTAT, New Delhi

Commissioner (A), Gurgaon

CCE Appeals, Ahemdabad

Asst. Commissioner, Kalol

Haryana Tax Tribunal, Chandigarh

Sales Tax Act Supreme Court of India

Supreme Court of India

Supreme Court of India

Supreme Court of India

Supreme Court of India

Supreme Court of India

Supreme Court of India

Maharashtra Sales Tax Tribunal , Mumbai

Asst. Commissioner, Ahemdabad

Joint. Commissioner, Commercial Taxes, Bangalore

Deputy Commissioner, Commercial Taxes, Ernakulam

Finance Act CESTAT, Ahemdabad

Asstt. Commissioner Rohtak

Income Tax Act CIT Appeals, Kolkata

CIT Appeals, Kolkata

CIT Appeals, Kolkata CIT Appeals, Kolkata

CIT Appeals, Kolkata

* Excluding penalty if any (Refer note no. 2.1)

10. The company does not have accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

11. Basedonouraudit procedures and on the information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institution, banks or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Clause k (xiii) of the Order is not applicable to the Company as the Company is not a chit fund ora nidhi / mutual benefit fund / society.

14. In our opinion, the company is not dealing in or trading in shares, securities,debentures and other investments. Accordingly Clause k (xiv) of the Order is not applicable to the Company.

15 According to the information and explanations given to us, the terms and conditions on which Company has given guarantee for amount aggregating to Rs. 12,30,00,000/- for loans taken by others from banks and financial institutions, are not prima facie prejudicial to the interest of the Company.

16 According to the information and explanations given to us,the term loans were applied for the purposes for which the loans were obtained.

17 On an overall examination of the financial statements of the Company and on the basis of information and explanations given to us, we are of the opinion that the company has not used funds raised on short-term basis for long-term investment.

18 According to the information and explanations given to us, the Company has not made any preferential allotment of shares to any parties and companies covered in the register maintained underSection 301 of the Act during the year.

19 On the basis of the records made available to us, the Company has no debentures outstanding during the year.

20 The company has not raised any money through public issue during the year.

21 During the course of our examination of the books and records of the company carried out in accordance with the auditing standards generally accepted in India, we have neither come across any material instance of fraud on or by the company, noticed or reported during the year nor we have been informed of such case by the management.

For LODHA & CO.,

Chartered Accountants

Firm Registration Number: 301051E

N.K. LODHA

Place: New Delhi Partner

Date: May 21, 2013 Membership No: 85155


Mar 31, 2012

We have audited the attached Balance Sheet of Somany Ceramics Limited as at 31st March 2012, the statement of Profit & Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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.

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 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 appears from our examination of those books;

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956;

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

In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with note no.

2.5 and other notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of the statement of Profit & Loss, of the profit of the Company for the year ended on that date; and

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

f) As required by the Companies (Auditor's Report) Order, 2003 (The Order) (as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (The Act), on the matters specified in paragraphs 4 and 5 of the said Order, We further report that:

1. (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets except in case of certain locations where records are in process of updation / compilation.

(b) As per the information and explanations given to us, certain fixed assets have been physically verified by the management according to a regular programme of periodic verification in a phased manner which in our opinion is reasonable having regard to the size of the company and nature of fixed assets. The discrepancies noticed on such physical verification were not material.

(c) As per records and information and explanation given to us, no substantial part of fixed assets has been disposed off during the year.

2. (a) As per the information and explanations given to us, the inventories (except stocks with third parties and in transit) have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory 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 (in respect of process stock records are updated after physical verification). The discrepancies noticed on such physical verification of inventory as compared to book records were not material which have been properly dealt with.

3A. (a) As per the information and records made available, the company has not granted any loans, secured or unsecured, to companies, firms or other parties except to one company in the register maintained under section 301 of the Act. The maximum amount involved during the year and the closing balance is Rs.23.47 lacs and Rs. NIL respectively.

(b) In our opinion, the rate of interest and other terms and condition of loan granted are not prima facie prejudicial to the interest of the company.

(c) In accordance with the information and explanations given to us in respect of the aforesaid loans, there is no as such stipulated schedule for recovery of principal and interest and the same are recovered on demand.

B. (a) As per the information and records made available, the Company has not taken any loans secured or unsecured from companies, firms or other parties except from two companies covered in the register maintained under section 301 of the Act. The maximum amount involved during the year is Rs. 100 lacs and the year end balance of such loans are Rs.75 lacs.

(b) In our opinion, the rate of interest and other terms and conditions of loans taken are not prima facie prejudicial to the interest of the Company.

(c) In accordance with the information and explanations given to us in respect of the aforesaid loans, there in no as such stipulated schedule for repayment of principal and interest and the same are repayable on demand.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that certain items purchased/sold are of special nature for which, as explained, suitable alternatives sources do not exist for obtaining comparative quotations, taking in to consideration the quality, usage and such other factors, there are adequate internal control systems (read with note no. 2.6 & 2.16) commensurate with the size of the company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. Further on the basis of examination of the books and records of the company, carried out in accordance with the generally accepted auditing principles in India, and according to the information and explanation given, we have neither come across nor have we been informed of any instance of major weakness in internal control systems of the company.

5. (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 such contracts or arrangements (exceeding the value of Rs.5 lacs in respect of any party during the financial year) have been made at prices which are generally reasonable having regard to prevailing market prices at the relevant time (read with para 4 above).

6. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public within the meaning of section 58A and 58AA or any other relevant provisions of the Act and rules framed there under. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under Section 209 (1) (d) of the Act in respect of the Company's products to which the said rules are made applicable and are of the opinion that prima facie, the prescribed records have been made and maintained. We have however not made a detailed examination of the said records with a view to determine whether they are accurate or complete.

9. (a) According to the records and information made available to us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues to the extent applicable to it and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 2012.

(b) According to the records and information and explanations given to us, there are no dues in respect of income tax, wealth tax, service tax, custom duty, excise duty and cess that have not been deposited with appropriate authorities on account of disputes and the dues in respect of customs duty, excise duty, service tax and sales tax that have not been deposited with appropriate authorities on account of disputes and the forum where the dispute is pending are as given below:

Name of Statue Nature of Dues Period to which Amount Forum where dispute is pending it relates (Rs.in Lacs)

Custom Act Custom Duty 1997-1999 5.91 Deputy Commissioner of Customs, (Import) Tughlakabad

1999-2004 317.43 CESTAT, New Delhi

2005-2007 13.04 Commissioner (A), Gurgaon

Central Excise Act Excise duty/ Cenvat Credit 1996-2000 9.33 CCE Appeals, Ahemdabad

1994-1995 0.07 Asst. Commissioner, Kalol

2008-2009 1.81 CCE Appeals

2002-2003 5.15 Haryana Tax Tribunal, Chandigarh

2006-2007 60.12 Supreme Court of India

2007-2008 76.40 Supreme Court of India

Sales Tax Act Local Area Development Tax 2008-2009 89.27 Supreme Court of India

2009-2010 93.56 Supreme Court of India

2010-2011 59.62 Supreme Court of India

2011-2012 60.16 Supreme Court of India

1990-1993 45.83 Maharashtra Sales Tax Tribunal

2006-2007 65.81 Asst. Commissioner, Ahemdabad

Turnover Tax 2007-2008 35.96 Joint. Commissioner, Commercial Taxes, Banglore

2006-2009 22.76 Joint. Commissioner, Commercial Taxes, Banglore

2008-09 0.33 Commissioner of Central Excise, Ahemdabad

0.43 Deputy Commissioner of Central Excise

Finance Act Service Tax credit/ 2007-2008 0.74 CESTAT, Ahemdabad

abatement 2005-2007 6.72 Gujrat High Court

2009 3.25 Asst. Commissioner of Central Excise, Ahemdabad

2007-09 2.80 Asstt. Commissioner, Rohtak

2004-05 113.79 CIT Appeals, Kolkata

Income Tax Act* Income Tax 2006-07 5.00 CIT Appeals, Kolkata

2008-09 5.55 CIT Appeals, Kolkata

2009-10 42.51 CIT Appeals, Kolkata

* Excluding penalty if any (Refer note no. 2.1)

10. The company does not have accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

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

12. According to the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Clause 4 (xiii) of the Order is not applicable to the Company as the Company is not a chit fund or a nidhi / mutual benefit fund / society.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the terms and conditions on which Company has given guarantee aggregating to Rs.1230 lacs for loans taken by others from banks and financial institutions, are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

17. On an overall examination of the financial statements of the Company and on the basis of information and explanations given to us, we are of the opinion that the company has not used funds raised on short-term basis for long-term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to any parties and companies covered in the register maintained under Section 301 of the Act during the year.

19- On the basis of the records made available to us, the Company has no debentures outstanding during the year.

20. The company has not raised any money through public issue during the year.

21. During the course of our examination of the books and records of the company carried out in accordance with the auditing standards generally accepted in India, we have neither come across any material instance of fraud on or by the company, noticed or reported during the year nor we have been informed of such case by the management.

For LODHA & Co.

Chartered Accountants

Firm Registration No. 301051E

N. K. Lodha

Place: New Delhi Partner

Date: The 19th day of May, 2012 M.No. 85155


Mar 31, 2011

We have audited the attached Balance Sheet of Somany Ceramics Limited as at 31st March, 2011, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financia 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 financia statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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 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 appears from our examination of those books;

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that none of the directors of the Company 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 Companies Act, 1956;

f) Attention is invited to note no. 7 of schedule 17 of notes to accounts regarding investment, outstanding overdue debtors and advances to a Joint Venture Company, provision for dimunition in the value of investment and recovery of outstanding debtors/advances has not been considered by the management for the reasons stated in the said note. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of Profit & Loss Account, of the profit of the Company for the year ended on that date; and

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

g) As required by the Companies (Auditor's Report) Order, 2003 (The Order) (as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (The Act), on the matters specified in paragraphs 4 and 5 of the said Order, We further report that:

1. (a) The Company has maintained proper records showing full

particulars, including quantitative details and situation of fixed assets except in case of certain locations where records are in process of updation/compilation.

(b) As per the information and explanations given to us, certain fixed assets have been physically verified by the management according to a regular programme of periodic verification in a phased manner which in our opinion is reasonable having regard to the size of the Company and nature of fixed assets. The discrepancies noticed on such physical verification were not material.

(c) As per records and information and explanations given to us, no substantial part of fixed assets has been disposed off during the year.

2. (a) As per the information and explanations given to us, the inventories (except stocks with third parties and in transit) have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory 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 (in respect of process stock records are updated after physical verification). The discrepancies noticed on such physical verification of inventory as compared to book records were not material which have been properly dealt with.

3A. (a) As per the information and records made available, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties except to one company covered in the register maintained under section 301 of the Act. The maximum amount involved during the year and the closing balance is Rs. 4,349,654 and Rs. 2,000,000 respectively.

(b) In our opinion, the rate of interest and other terms and condition of loan granted are not prima facie prejudicial to the interest of the Company.

(c) In accordance with the information and explanations given to us in respect of the aforesaid loans, there is no as such stipulated schedule for recovery of principal and interest and the same are recovered on demand.

B (a) As per the information and records made available, the Company has not taken any loans secured or unsecured from companies, firms or other parties except from two companies covered in the register maintained under section 301 of the Act. The maximum amount involved during the year is Rs. 13,800,000 and the year end balance of such loans are Rs. 5,430,006.

(b) In our opinion, the rate of interest and other terms and conditions of loans taken are not prima facie prejudicial to the interest of the Company.

(c) In accordance with the information and explanations given to us in respect of the aforesaid loans, there in no as such stipulated schedule for repayment of principal and interest and the same are repayable on demand.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that certain items purchased/sold are of special nature for which, as explained, suitable alternatives sources do not exist for obtaining comparative quotations, taking into consideration the quality, usage and such other factors, there are adequate internal control systems (read with note no. 8 & 18 of schedule 17) commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. Further on the basis of examination of the books and records of the Company, carried out in accordance with the generally accepted auditing principles in India, and according to the information and explanation given, we have neither come across nor have we been informed of any instance of major weakness in internal control systems of the Company.

5. (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 such contracts or arrangements (exceeding the value of Rs. 5 lacs in respect of any party during the financial year) have been made at prices which are generally reasonable having regard to prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 58A and 58AA or any other relevant provisions of the Act and rules framed there under. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. As per the information and explanations given to us, the Central Government has not prescribed for maintenance of the cost records under section 209(1) (d) of the Act for the products of the Company.

9. (a) According to the records and information made available to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues to the extent applicable to it and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2011 except service tax and tax deducted at source amounting to Rs. 13,007 and Rs. 63,456 respectively. However, the said amount has been paid after Balance Sheet date alongwith interest.

(b) According to the records and information and explanations given to us, there are no dues in respect of income tax, wealth tax, service tax, custom duty, excise duty and cess that have not been deposited with appropriate authorities on account of disputes and the dues in respect of customs duty, excise duty, service tax and sales tax that have not been deposited with appropriate authorities on account of disputes and the forum where the dispute is pending are as given below:

Name of Statue Nature of Dues Period to which it relates Total

Custom Act Custom Duty 1997-1999 590,971

Central Excise Act Excise duty/Cenvat Credit 1999-2004 31,742,914

2005-2007 1,304,010

1996-2000 933,098

1994-1995 6,984

2008-2009 181,031

Sales Tax Act Local Area Development Tax 2002-2003 514,701

2006-2007 6,000,000

2007-2008 7,640,321

2008-2009 8,926,801

2009-2010 9,355,699

2010-2011 5,962,538

Turnover Tax 1990-1993 4,582,504

2006-2007 6,581,452

2006-2009 2,276,239

Finance Act Service Tax Credit/ Abatement 2005 2,865,264

2008-09 32,642

43,225

2007-2008 73,659

2005-2007 672,460

2009 324,998

Service Tax 2007-09 280,298

Income Tax Act* Income Tax 2004-05 11,378,798

2008-09 886,895

Name of Statue Forum where dispute is pending

Custom Act Deputy Commissioner of Customs, (Import) Tughlakabad

Central Excise Act CESTAT, New Delhi

Commissioner (A), Gurgaon

CCE Appeals, Ahmedabad

Asst. Commissioner, Kalol

CCE Appeals

Sales Tax Act Haryana Tax Tribunal, Chandigarh

Supreme Court of India

Supreme Court of India

Supreme Court of India

Supreme Court of India

Supreme Court of India

Maharashtra Sales Tax Tribunal

Asst. Commissioner, Ahmedabad

Joint. Commissioner, Commercial Taxes, Banglore

Finance Act Asst. Commissioner, New Delhi

Commissioner of Central Excise, Ahmedabad

Deputy Commissioner of Central Excise

CESTAT, Ahmedabad

Gujrat High Court

Asst. Commissioner of Central Excise, Ahmedabad

Asst. Commissioner, Rohtak

Income Tax Act* CIT Appeals, Kolkata

CIT Appeals, Kolkata

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

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

12. According to the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Clause 4 (xiii) of the Order is not applicable to the Company as the Company is not a chit fund or a nidhi/mutual benefit fund/society.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the terms and conditions on which Company has given guarantee aggregating to Rs. 50,400,000 for loans taken by others from banks and financial institutions, are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

17. On an overall examination of the financial statements of the Company and on the basis of information and explanations given to us, we are of the opinion that the Company has not used funds raised on short-term basis for long-term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to any parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. On the basis of the records made available to us, the Company has no debentures outstanding during the year.

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

21. During the course of our examination of the books and records of the Company carried out in accordance with the auditing standards generally accepted in India, we have neither come across any material instance of fraud on or by the Company, noticed or reported during the year nor we have been informed of such case by the management.

For Lodha & Co.

Chartered Accountants

Firm Registration No. 301051E

N. K. Lodha Partner M.No. 85155

Place: New Delhi Dated: 28th May, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of Somany Ceramics Limited as at 31st March, 2010, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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.

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 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 appears from our examination of those books;

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

d) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956;

e) On the basis of written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that none of the directors of the Company 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 Companies Act, 1956;

f) Without qualifying our opinion attention is invited to note no. 7 of Schedule 17 of notes to accounts regarding non provisioning of diminution in the value of Investments and against debtors as stated in the said note.

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

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

b) in the case of Profit & Loss Account, of the profit of the Company for the year ended on that date; and

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

g) As required by the Companies (Auditors Report) Order, 2003 (The Order) (as amended) issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956 (The Act), on the matters specified in paragraphs 4 and 5 of the said Order, we further report that :

1. (a) The Company has maintained proper records showing full particulars,

including quantitative details and situation of fixed assets except in case of certain locations where records are in process of updation / compilation.

(b) As per the information and explanations given to us, certain fixed assets have been physically verified by the management according to a regular programme of periodic verification in a phased manner which in our opinion is reasonable having regard to the size of the Company and nature of fixed assets. The discrepancies noticed on such physical verification were not material.

(c) As per records and information and explanation given to us, no substantial part of fixed assets has been disposed off during the year.

2. (a) As per the information and explanations given to us, the inventories

(except stocks with third parties and in transit) have been physically verified by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventory 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 (in respect of process stock records are updated after physical verification). The discrepancies noticed on such physical verification of inventory as

compared to book records were not material which have been properly dealt with.

3A. a) As per the information and records made available, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties except to one Company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year and the closing balance is Rs. 16,272,086 and Rs. 4,349,654 respectively.

(b) In our opinion, the rate of interest and other terms and condition of loan granted are not prima facie prejudicial to the interest of the Company.

(c) In accordance with the information and explanations given to us in respect of the aforesaid loans, there is no as such stipulated Schedule for recovery of principal and interest and the same are recovered on demand.

B (a) As per the information and records made available, the Company has not taken any loans secured or unsecured from companies, firms or other parties except from two companies covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year is Rs. 20,736,000 and the year end balance of such loans are Rs. 13,800,000.

(b) In our opinion, the rate of interest and other terms and conditions of loans taken are not prima facie prejudicial to the interest of the Company.

(c) In accordance with the information and explanations given to us in respect of the aforesaid loans, there is no as such stipulated Schedule for repayment of principal and interest and the same are repayable on demand.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased/sold are of special nature for which, as explained, suitable alternatives sources do not exist for obtaining comparative quotations, taking into consideration the quality, usage and such other factors, there are adequate internal control systems (read with note no. 8 & 18 of Schedule 17) commensurate with the size of the Company and nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. Further on the basis of examination of the books and records of the Company, carried out in accordance with the

generally accepted auditing principles in India, and according to the information and explanation given, we have neither come across nor have we been informed of any instance of major weakness in internal control systems of the Company.

5. (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 such contracts or arrangements (exceeding the value of Rs. 5 lacs in respect of any party during the financial year) have been made at prices which are generally reasonable having regard to prevailing market prices at the relevant time

6. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA or any other relevant provisions of the Act and rules framed there under. We have been informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal in this regard.

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

8. As per the information and explanations given to us, the Central Government has not prescribed for maintenance of the cost records under Section 209(1) (d) of the Act for the products of the Company.

9. (a) According to the records and information made available to us, the

Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income-tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues to the extent applicable to it and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2010.

(b) According to the records and information and explanations given to us, there are no dues in respect of cess that have not been deposited with appropriate authorities on account of disputes and the dues in respect of income tax, wealth tax, customs duty, excise duty, service tax and sales tax that have not been deposited with appropriate authorities on account of disputes and the forum where the dispute is pending are as given below :

Name of Statue Nature of Dues Period to which it relates

Custom Act Custom Duty 1997-1999

Central Excise Act Excise duty/Cenvat Credit 1999-2004 2005-2007 1996-2000 2006-2007 1994-1995 2008-2009

Sales Tax Act Local Area Develo pment Tax 2002-2003 2006-2007 2007-2008 2008-2009 2009-2010 Turnover Tax 1990-1993

Finance Act Service Tax Credi t/Abatement 2005 2008-2009 2008-2010 Service Tax 2005-2006 2008-2009 2007-2008 2007-2009

Income Tax Act* Income Tax 2004-2005 2006-2007

Wealth Tax Act* Wealth Tax 2004-2005

Name of Statue Total Forum where dispute is pending

Custom Act 590,971 Deputy Commissioner of Customs, (Import) Tughlakabad

Central Excise 31,742,914 CESTAT, New Delhi

Act 1,304,010 Commissioner (A), Gurgaon

933,098 CCE Appeals, Ahemdabad

128,047 Asst. Commissioner, Rohtak

6,984 Asst. Commissioner, Kalol

181,031 CCE Appeals

Sales Tax Act 514,701 Haryana Ta x Tribunal, Chandigarh

6,000,000 Supreme Court of India

7,640,321 Supreme Court of India

8,926,801 Supreme Court of India

9,355,699 Supreme Court of India

4,582,504 Maharashtra Sales Tax tribunal

Finance Act 2,865,264 Asst. Commissioner, New Delhi

32,642 Commissioner of Central Excise

43,225 Deputy Commissioner of Central Exci

387,021 Asstt. Commissioner of Central Exci

1,731,044 Commissioner Appeals, New Delhi

306,700 Asstt. Commissioner, Rohtak

211,469 Asstt. Commissioner, Rohtak

280,298 Asstt. Commissioner, Rohtak

Income Tax Act* 9,123,086 CIT Appeals, Kolkata

1,010,372 CIT Appeals, Kolkata

Wealth Tax Act* 1,245,340 CIT Appeals, Kolkata

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

11. Based on our audit procedures and on the information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institution, banks or debentureholders.

12. According to the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. Clause 4 (xiii) of the Order is not applicable to the Company as the Company is not a chit fund or a nidhi/mutual benefit fund/society.

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments.

15. According to the information and explanations given to us, the terms and conditions on which Company has given guarantee aggregating to Rs. 60,400,000 for loans taken by others from banks and financial institutions, are not prima facie prejudicial to the interest of the Company.

16. According to the information and explanations given to us, the term loans were applied for the purposes for which the loans were obtained.

17. On an overall examination of the financial statements of the Company and on the basis of information and explanations given to us, we are of the opinion that the Company has not used funds raised on short-term basis for long- term investment.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares to any parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. On the basis of the records made available to us, the Company has no debentures outstanding during the year.

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

21. During the course of our examination of the books and records of the Company carried out in accordance with the auditing standards generally accepted in India, we have neither come across any material instance of fraud on or by the Company, noticed or reported during the year nor we have been informed of such case by the management.

For Lodha & Co. Chartered Accountants Firm Registration No. 301051E

N. K. Lodha Partner M. No. 85155 Place: New Delhi Date: 17th May, 2010



 
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