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Auditor Report of SPL Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of SPL INDUSTRIES 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 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 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 of 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 thereunder.

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 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 (hereinafter referred to as "the Order") issued by the Central Government of India in terms of sub - section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the order, 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 Section133 of the Act, read with Rule7 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 financial statements.

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

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

Annexure to the Independent Auditor''s Report

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

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

(b) All fixed assets have been physically verified by the management during the audit period and no material discrepancies were noticed on such verification.

(ii) (a) The inventory has been physically verified during the audit period by the management. 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 is maintaining proper records of inventory and no discrepancies were noticed on physical verification.

(iii) (a) The Company has not granted any loans, secured or unsecured, to companies/ firms/ other parties covered in the register maintained, on the basis declaration received from the directors in Form MBP-1, under section 189 of the Act.

(b) Sub clauses (a) to (b) of Clause (iii) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of fixed assets and sale of goods and services.

(v) No deposits have been accepted by the Company from public within the meaning of sections 73 to 76 of the Act.

(vi) The Central Government, via notification dated December 31,2014, has amended the Companies (Cost Records and Audit) Rules, 2014 to exclude companies having annual turnover less than INR 150 crores during immediately preceding financial year. As regards previous years, the Company has made and maintained the cost records as prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956.

(vii) (a) During audit procedures we have found that the Company is regular in depositing undisputed statutory dues including Provident fund, Investor Education and Protection Fund, Employee''s State Insurance, Income Tax, Sales Tax, Service Tax and other material statutory dues applicable to it with the appropriate authorities.

(b) No due of Income Tax/ Sales Tax/ Service Tax/ Custom Duty/ Wealth Tax/ Excise Duty/ Cess are pending on part of the Company on account of any dispute except the following amounts:

S. Name of the Statute Nature of Dues Amount (Rs. Lakhs) No.

1 Income Tax Act, 1961 Penalty u/s 271(1)(c) 69.10

2 Income Tax Act, 1961 Penalty u/s 271(1)(c) 11.44

Name of the Statute Period to which Forum where dispute amount relates is pending

Income Tax act 1961 AY 2007 - 08 CIT (A)

Income Tax Act 1961 AY 2010 - 11 CIT (A)

(c) There is no amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956.

(viii) The accumulated losses of the company exceed fifty percent of its net worth as at March 31,2015 and it has cash profits & overall profits in the financial year ended on that date.

(ix) As per information and explanations given to us, the Company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(x) As per information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xi) According to information and explanations given to us, the Company has not taken any term loan.

(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 audit.

For Singhi Chugh & Kumar Chartered Accountants Firm''s Registration No. 013613N

Harsh Kumar New Delhi Partner Dated: 29.05.2015 M. No. 088123


Mar 31, 2014

1. We have audited the accompanying financial statements of SPL Industries Limited, which comprise the Balance Sheet as at March 31, 2014; the Statement of Profit and Loss and Cash Flow Statement for the period then ended, and a summary of significant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

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

3. Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

4. Opinion

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

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

b) in the case of the Statement of Profit and Loss, of the profit for the period ended on that date; and

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

5. Report on other legal and regulatory requirements

(i) As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "Order"), 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, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order

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

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

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

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

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

Annexure to the Auditor''s Report

(Referred to in Paragraph 5(i) of the auditor''s report of the even date for the year ended 31st march, 2014)

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and in terms of the information and explanations given to us and the books and records examined by us in the normal course of audit, we report that:

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

(b) As informed to us, physical verification of the fixed assets was conducted by the management during the year. As per the management no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and the going concern status of the Company is not affected due to this.

(ii) (a) As explained to us physical verification of inventory was done on reasonable intervals.

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

(c) In our opinion and according to information and explanations given to us, the company has maintained proper records of inventory and no material discrepancies were noticed on physical verification carried out by the management.

(iii) As per the information and explanation given to us, the company has not granted / taken any loan, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Therefore clause 4(iii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size and nature of its business during the year with regard to purchase of inventory and fixed assets and sale of goods and services. During the course of our audit we have not observed any major weakness in such internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, no transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year.

(vi) No deposits have been accepted by the company from public. Therefore clause 4(vi) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

(vii) The company has the internal audit system that commensurate with the size and nature of the business according to the conditions stipulated under clause 4(vii) of the Companies (Auditor''s Report) order, 2003.

(viii) The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

(ix) (a) According to the best of our knowledge and according to the information and explanations given to us undisputed statutory dues

including provident fund, employee state insurance, income tax, sales tax, service tax have generally been regularly deposited with appropriate authorities though there has been slight delay in few cases.

(b) According to the best of our knowledge and according to the information and explanation given to us there are no dues of sales tax/ custom duty/ wealth tax/ excise duty / cess/ service tax which have not been deposited on account of dispute, except are as follows:

S. Name of the Statute Nature of Dues Amount (Rs. No. Lakhs)

1 Income Tax Act, 1961 Demand u/s 143(3)/147 467.68

2 Income Tax Act, 1961 Penalty u/s 271(1)(c) 69.10

3 Income Tax Act, 1961 penalty u/s 271(1)(c) 11.44

S. Name of the Statute Period to which Forum where dispute No. amount relates is pending

1 Income Tax Act, 1961 AY 2005 - 06 Pending before CIT(A)

2 Income Tax Act, 1961 AY 2007 - 08 CIT (A)

3 Income Tax Act, 1961 AY 2010 - 11 CIT (A)

(x) The accumulated losses of the Company exceed fifty percent of its net worth as at March 31, 2014 and it has cash profits & overall profits in the financial year ended on that date but has incurred cash losses in the immediately preceding financial year.

(xi) According to information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(xii) The company has not granted 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 therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xv) In our opinion and according to information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xvi) The Company has not raised any term loans during the year. Accordingly, the provisions of Clause 4(xvi) of the Order are not applicable to the Company.

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

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanation given to us the company has not issued any debentures.

(xx) To the best of our knowledge and according to information and explanation given to us, the company has not raised any money by public issue during the year.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For Singhi Chugh & Kumar Chartered Accountants Firm Registration No. 013613N

Harsh Kumar Place: New Delhi Partner Date: 30.05.2014 Membership No. 088123


Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying fnancial statements of SPL Industries Limited, which comprise the Balance Sheet as at March 31, 2013; the Statement of Proft and Loss and Cash Flow Statement for the period then ended, and a summary of signifcant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor''s Responsibility

Our responsibility is to express an opinion on these fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial statements in to the Company''s preparation and fair presentation of the fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the fnancial statements.

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

4. Opinion

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

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

b) in the case of the Statement of Proft and Loss, of the loss for the period ended on that date; and

c) in the case of the Cash Flow Statement, of the cash fows for the period ended on that date.

5. Report on other legal and regulatory requirements

(i) As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by ''the Companies (Auditor''s Report) (Amendment) Order, 2004'', issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as the "Order"), 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, we give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the Order

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

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

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

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

d. in our opinion, the Balance Sheet, Statement of Proft and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

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

Annexure to the Auditor''s Report

(REFERRED TO IN PARAGRAPH 5(i) OF THE AUDITORS REPORT OF THE EVEN DATE FOR THE YEAR ENDED 31ST MARCH, 2013)

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the fnancial statements and in terms of the information and explanations given to us and the books and records examined by us in the normal course of audit, we report that:

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

(b) As informed to us, physical verifcation of the fxed assets was conducted by the management during the year. As per the management no material discrepancies were noticed on such verifcation.

(c) The fxed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fxed assets of the Company and the going concern status of the Company is not affected due to this.

(ii) (a) As explained to us physical verifcation of inventory was done on reasonable intervals.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verifcation of inventory followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) In our opinion and according to information and explanations given to us, the company has maintained proper records of inventory and no material discrepancies were noticed on physical verifcation carried out by the management.

(iii) As per the information and explanation given to us, the company has not granted any loan, secured or unsecured, to/from companies, frms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

In respect of loans secured or unsecured, taken by the Company from Companies, frms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanation given to us:

The Company has taken a short term interest free loan of Rs. 21,247,530 from Companies listed in register maintained under Section 301, other terms and conditions of such loans are in our opinion is not prejudicial to the interest of the Company. The nature of loan is short term and repayment terms of the same are not stipulated.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size and nature of its business during the year with regard to purchase of inventory and fxed assets and sale of goods and services. During the course of our audit we have not observed any major weakness in such internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees fve lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) No deposits have been accepted by the company from public. Therefore clause 4(vi) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

(vii) The company has the internal audit system that commensurate with the size and nature of the business according to the conditions stipulated under clause 4(vii) of the Companies (Auditor''s Report) order, 2003.

(viii) The Central Government of India has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act for any of the products of the Company.

(ix) According to the best of our knowledge and according to the information and explanations given to us undisputed statutory dues including provident fund, employee state insurance, income tax, sales tax, service tax have generally been regularly deposited with appropriate authorities though there has been slight delay in few cases.

(x) The accumulated losses of the Company exceed ffty percent of its net worth as at March 31, 2013 and it has incurred cash losses in the fnancial year ended on that date and has incurred cash losses in the immediately preceding fnancial year.

(xi) According to information and explanations given to us, the company has not defaulted in repayment of dues to a fnancial institution or bank or debenture holders.

(xii) The company has not granted 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 beneft fund/ society therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xv) In our opinion and according to information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or fnancial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xvi) The Company has not raised any term loans. Accordingly, the provisions of Clause 4(xvi) of the Order are not applicable to the Company.

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

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanation given to us the company has not issued any debentures.

(xx) To the best of our knowledge and according to information and explanation given to us, the company has not raised any money by public issue during the year.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For SINGHI CHUGH & KUMAR

Firm Registration. No. 013613N

CHARTERED ACCOUNTANTS

Harsh Kumar

Place: New Delhi Partner

Date: 28.05.2013 Membership No. 088123


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s SPL INDUSTRIES LIMITED as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement for the year ending on that date annexed thereto. These financial statements are the responsibility of 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 financial statements are free from material misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that

a. Trade Debtors amounting to Rs. 8,31,00,095/- outstanding for more than six months and advances to suppliers amounting to Rs. 5,98,49,784/- after making provision for doubtful debts are subject to confirmation.

b. The working capital and term loan liabilities of the Company from State Bank of India became NPA on 23rd May 2011 and on 26th December 2011 State Bank of India issued notice under SARAFESI Act for recovery of amount of Rs. 85,27,33,800. This amount includes Rs. 12,99,34,285 on account of derivative losses which have not been provided for, as the Company is disputing the same. The amount claimed by the Bank is fully covered by the present market value of the collateral security provided by the Company.

5. Further to our comments in the annexure referred to in paragraph 3 & 4 above, we report that:

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in compliance 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 as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub - section (1) of Section 274 of the Companies Act, 1956;

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and 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:

i. In the case of the Balance Sheet of the state of affairs of the company as at 31st March, 2012;

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

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

Annexure

(REFERRED TO IN PARAGRAPH 3 OF THE REPORT OF THE EVEN DATE FOR THE YEAR ENDED 31ST MARCH, 2012)

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and in terms of the information and explanations given to us and the books and records examined by us in the normal course of audit, we report that:

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

(b) As informed to us, physical verification of the fixed assets was conducted by the management during the year. As per the management no material discrepancies were noticed on such verification.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and the going concern status of the Company is not affected due to this.

(ii) (a) As explained to us physical verification of inventory was done on reasonable intervals.

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

(c) In our opinion and according to information and explanations given to us, the company has maintained proper records of inventory and no material discrepancies were noticed on physical verification carried out by the management.

(iii) As per the information and explanation given to us, the company has not granted any loan, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

In respect of loans secured or unsecured, taken by the Company from Companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanation given to us:

The Company has taken a short term interest free loan Rs. 2,68,47,529/- from Companies listed in register maintained under Section 301, other terms and conditions of such loans are, in our opinion is not prejudicial to the interest of the Company. The nature of loan is short term and repayment terms of the same are not stipulated.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size and nature of its business during the year with regard to purchase of inventory and fixed assets and sale of goods and services. During the course of our audit we have not observed any major weakness in such internal control system.

(v) (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) To the best of our knowledge, the company has not accepted any deposits covered under section 58A and 58AA or any other relevant provision of the Companies Act, 1956.

(vii) In our opinion and as per information and explanation provided to us the Company has an inbuilt mechanism of internal audit which as per the management is commensurate with its size and the nature of its business.

(viii) In the case of the company maintenance of cost records has not been prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

(ix) (a) To the best of our knowledge and according to the information and explanations given to us undisputed statutory dues including provident fund, employee state insurance, income tax, sales tax, service tax have generally been regularly deposited with appropriate authorities though there has been some delay in some cases.

(b) According to information and explanation given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, custom duty, excise duty and cess were in arrears, as at 31st March, 2012 for a period of more than six months from the date they became payable except as stated hereunder:

Service Tax Liability on rent of Rs. 2,75,000/- per month for the nine months period April to December, 2011 of Rs. 2,31,120/-. The above amount with interest was deposited on 24th May, 2012 for a total amount of Rs. 2,61,147/-.

(d) To the best of our knowledge and according to the information and explanation given to us there are no dues of sales tax/ custom duty/ wealth tax/ excise duty / cess/ service tax which have not been deposited on account of any dispute. Disputed statutory dues of Income Tax, which are pending to be deposited are as under.

S. Name of the Nature of Dues Amount (Rs. No. Statute Lakhs)

1 Income Tax Act, Tax & interest demand due to Sec. 80HHC Disallowance. 76.48 1961 Stay of demand granted by the High Court.

2 Income Tax Act, Tax & interest demand due to Sec. 80HHC Disallowance. 55.08 1961 Stay of demand granted by the High Court.

3 Income Tax Act, Penalty u/s 271(1)(c) 37.92 1961

4 Income Tax Act, Penalty u/s 271(1)(c). CIT(A) dropped the penalty vide 191.33 1961 order dated 18-6-2012.

5 Income Tax Act, Demand Raised u/s 143(3) 23.76 1961

6 Income Tax Act, Penalty u/s 271(1)(c) 69.10 1961

7 Income Tax Act, Tax Demand due to Disallowance under section 14A 13.56 1961

Name of the Statute Period to which Forum where dispute is amount relates pending

Income Tax Act,1961 AY 2002 - 03 High Court Chandigarh

Income Tax Act,1961 AY 2003 - 04 High Court Chandigarh

Income Tax Act,1961 AY 2005 - 06 High Court, Delhi

Income Tax Act,1961 AY 2006 - 07 Order of CIT(A) dropping the penalty received on 18-6-2012

Income Tax Act,1961 AY 2006 - 07 ITAT

Income Tax Act,1961 AY 2007 - 08 CIT (A)

Income Tax Act,1961 AY 2008 - 09 ITAT, Delhi

(x) The company has incurred cash losses during the financial year covered by our Audit and in the immediately preceding financial year. Its accumulated losses at the end of the current financial year exceed fifty percent of its net worth.

(xi) The company had defaulted in repayment of dues to the bank (State Bank of India) as stated in the Balance Sheet and the Auditors' Report.

(xii) The company has not granted 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 therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xv) In our opinion and according to information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions. Accordingly, the provisions of clause 4(xv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xvi) To the best of our knowledge and according to the information and explanations given to us, the term loans were applied for the purpose for which the loans were obtained.

(xvii)According to the information and explanations given to us and on overall examination of the balance sheet of the company, we report that the no funds raised on short-term basis have been used for long term investment. No long-term funds have been used to finance short-term assets except permanent working capital.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) According to the information and explanation given to us the company has not issued any debentures.

(xx) To the best of our knowledge and according to information and explanation given to us, the company has not raised any money by public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

for SINGHI CHUGH & KUMAR

Chartered Accountants

(Harsh Kumar)

Partner

Place: New Delhi M.No. 88123

Date: 28.07.2012 Firm Regn. No. 013613N

 
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