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Auditor Report of Sterling Powergensys Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of STERLING POWERGENSYS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31st, 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors are 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 Standards referred to in section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

We have 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 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 financial control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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. Basis for Qualified Opinion

1) Company is subject to interest liability on unpaid statutory dues and on other dues, the same has neither been paid or provided or quantified.

2) In respect of accounting of Gratuity for the employees, no provision has been made in Accounts for the same which is in contradiction to AS 15 - Employee Benefits issued by The Institute of Chartered Accountants of India.

3) In respect of deduction and contribution to Provident Fund for the employees, Company has not complied with the requirement of The Employees' Provident Funds and Miscellaneous Provisions Act, 1952.

4) Loans and advances to and from suppliers, others, sundry debtors and creditors are unconfirmed/unreconciled.

5) We are unable to quantify the effect of the above facts for want of relevant information and the effect thereof on the financials for the year ended 31st March, 2015.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us except for the effects of the matter described in the 'Basis for Qualified Opinion' paragraph above, 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, of the state of affairs of the Company as at 31 March 2015 and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section143 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 section143(3) of the Act, we report that:

a) We have sought and except for matters described in Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) Except for the effects of the matter described in the basis for qualified opinion paragraph above, 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, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

g) The qualification relating to non-provision of interest liability on statutory dues and non-confirmation of loans and advances, sundry debtors, creditors etc., non-compliance of AS-15 on Employee benefits and The Employees' Provident Funds and Miscellaneous Provisions Act, 1952 are stated in the Basis for Qualified Opinion paragraph above.

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

i) The Company has disclosed the amount of pending litigations on its financial position in Note-26 to the Financial Statements which is in the nature of contingent liability being not required to be provided in the accounts.

ii) The Company does not anticipate any material foreseeable losses, on long- term contracts.

iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund.

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT

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

(b) All the fixed assets, have been physically verified by the management during the year and no discrepancies were noticed on such verification

(ii) (a) In our opinion, physical verification of inventory lying with the company has been conducted at reasonable intervals by the management.

(b) In our opinion, 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) In our opinion, the Company has maintained proper records of inventory. As explained to us, no discrepancies were noticed on physical verification as compared to the book records.

(iii) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 and hence, the provisions of clauses iii (a) and (b) of paragraph 3 of the Companies (Auditor's Report) Order, 2015 are not applicable to the Company.

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

(v) The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the rules framed thereunder to the extent notified.

(vi) The Central Government of India has not prescribed the maintenance of cost records under subsection (1) of Section 148 of the Act for any of the activities of the Company.

(vii) According to the records of the Company, examined by us and information and explanations given to us:

(a) The company is generally irregular in payment of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and others as applicable with the appropriate authorities. The undisputed amounts payable in respect of aforesaid dues outstanding as at 31 March 2015 for a period of more than six months from the date they became payable are as follows:

Year Lease CST Gujarat VAT Tax Deducted Tax at Source

2014-15 - 7 7 1,71,543

2013-14 - - - -

2012-13 - - - -

2011-12 - - 27,06,353 -

2004-05 - 1,45,486 - -

1998-99 19,812 - - -

1997-98 39,624 - - 99,196

1996-97 - - - 1,72,111

Total 59,436 1,45,486 27,06,353 4,42,850

Year Service Tax Professon Provident Works Tax Fund Contract Tax

2014-15 37,294 12,225 2 12

2013-14 11,28,799 - - -

2012-13 - - 28,089 -

2011-12 - - - -

2004-05 - - - -

1998-99 - - - -

1997-98 - - - -

1996-97 - - - -

Total 11,66,093 12,225 28,089 12

The above details do not include the amount due for payment, quantum of which is not ascertained, under sales tax deferral scheme as shown under Other Long Term Liabilities amounting to Rs. 2,44,46,488/-

(b) According to the records of the Company, the dues of Sales tax which are not deposited on account of any dispute are as under:

Name of the Nature of the Dues Amount (Rs.) Statute

Bombay Sales Interest and Penalty Tax Act, 1959 on BST 21,79,193

Central Sales Tax Interest and Penalty Act, 1956 on CST 21,83,693

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

Bombay Sales Deputy Commissioner of Tax Act, 1959 1995-2003 Sales Tax (Appeals)

Central Sales Tax Deputy Commissioner of Act, 1956 1995-2003 Sales Tax (Appeals)

(c) According to the information and explanations given to us, there were no amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provision of the Act and rules there under.

(viii) The company has accumulated losses as on 31st March 2015, which is more than 50% of its net- worth. Further, it has incurred cash loss during the financial year but not in the immediately preceding financial year.

(ix) The Company has not defaulted in repayment of dues to banks during the year under audit.

(x) The company has not given guarantee in respect of loans taken by others. Accordingly the provisions of clause iii (x) of paragraph 3 of the Companies (Auditor's Report) Order, 2015 are not applicable.

(xi) In our opinion, the term loans have been used for the purpose for which the same were obtained.

(xii) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year.

For GMJ & Co. Chartered Accountants Firm's Reg. No. 103429W

CA Atul Jain Partner M. No. 037097

Place: Mumbai Date: 9th May, 2015


Mar 31, 2014

We have audited the attached financial statement o Sf TERLING STRIPS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss Account and the Cash flow statement for the year ended March 31, 2014 and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

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

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

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

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s report) (Amendment) Order,

2004 (together the "Order") issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 of India (the Act), and we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. i. The job card maintained by the company for manufacturing work carried out do not provide the full details of materials received, consumed and direct overheads incurred on the respective jobs. ii.Payments received and made in the parties accounts consisting debtors, creditors, loans, advances, deposits are generally not supported with the corresponding receipts of such payments received or made to or from the respective party and authenticity of the same couldn''t be verified for want of appropriate evidence. iii. Company is subject to interest liability on unpaid statutory dues and on other dues same has neither been paid nor provided or quantified. Iv. Loans & Advances to and from suppliers, others, sundry debtors, sundry creditors for goods & expenses are unconfirmed and in our opinion substantially unrealizable / payable. v. The Company has not made provision for Doubtful Debts.

vi. We are unable to quantify the effect of above facts in sub para (i) to (v) for want of relevant information and the effect thereof on the profit for the year ended or on the state of affairs of the company as at 31st March, 2014.

3. Subject to what is stated above:

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 for as appears from our examination of the books;

c) The Balance Sheet and the 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 representation received from the Directors, as on 31st March 2014 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2014 from being appointed as Directors under Section 274(1)(g) of Companies Act, 1956.;

ANNEXURE TO THE AUDITOR''S REPORTOF EVEN DATE REFFERED IN PARA NO.3

On the basis of information & explanation given to us, we report that: -

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

B. Management has informed that they have verified fixed assets and no material discrepancy were noticed by them, which requires any adjustment in accounts.

c. Substantial part of fixed assets have not been disposed off during the year, therefore there is no effect of this on concept of going concern.

2 a. As informed to us, the stocks of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals.

b. On the basis of information and explanations furnished to us, in our opinion the procedures of physical verification of stocks

followed by the management, wherever it is carried out, are reasonable in relation to the size of the Company and the nature of its business, however, the same is required to be further strengthened.

c As informed to us, no major discrepancies have been noticed by the management on their physical verification of stock as compared to the book records and the same is properly accounted.

3 a The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

b i) The Company has taken loans, secured or unsecured from companies, firms or other parties, free of interest, listed in the Register maintained under Section 301 of the Companies Act, 1956.

No. of Parties Loan taken during the year Maximum amount outstanding During the year 2 Rs.31,71,200/- 2,57,84,538/-

ii) The terms & conditions of such loan taken have not been laid down in writing, however as informed to us, the same are not prejudicial to the interest of the company.

iii) The terms of repayments of principal have not been laid down in writing hence, we cannot comment on regularity or otherwise of the same.

4. There exists internal control system commensurate with the size of the company & the nature of its business, for the purchase

of inventory and fixed assets and for sale of Goods & Servicesw hich in our opinion needs to be further strengthened. However, as informed to us, the purchase of stores, raw material including components, plant and machinery, equipment and other assets are being personally supervised by the management, therefore much documentation for subsequent verification are not available.

5. As have been informed to us Company has maintained the register in pursuance of section 301 of the Companies Act,1956,

particulars of contracts or arrangements referred to in S-301 of the Act have been entered.

6. The Company has not accepted any deposits during the year from the public under Section 58-A or 58AA of the Companies Act, 1956, in contravention of rules made thereunder.

7. The Company has a formal internal audit system commensurate with the size and nature of its business.

8. Maintenance of cost records for the manufacturing activities of the Company has not been prescribed by the Central Government under Section 209 (1) (d) Companies Act, 1956.

The above amount of Sales Tax arrears do not include the amount due for payment, quantum not ascertained, under defer scheme where the total outstanding amount of Rs. 2,44,46,488/- have been shown as loan against Sales Tax Collection. b. Following dues are disputed by the company and the dispute are pending as under :-

SL No. Nature of Amount Period to which Forum where dispute pending Dispute Rs. amount relate

1 BST 2,58,423/- 1994 – 95 Maharashtra Sales Tax Tribunal

2. CST 3,13,811/- 1994 – 95 Maharashtra Sales Tax Tribunal

3 BST 12,78,212/- 1995 – 96 Deputy Commissioner. Sales Tax (Appeal)

4. CST 3,99,738/- 1995 – 96 Deputy Commissioner. Sales Tax (Appeal)

5. BST 24,93,119/- 1996 – 97 Deputy Commissioner. Sales Tax (Appeal)

6. CST 1,94,375/- 1996 – 97 Deputy Commissioner. Sales Tax (Appeal)

7. BST 10,10,488/- 1997 – 98 Deputy Commissioner. Sales Tax (Appeal)

8. CST 13,43,443/- 1997 – 98 Deputy Commissioner. Sales Tax (Appeal)

9. CST 10,40,000/- 1998 – 99 Deputy Commissioner. Sales Tax (Appeal)

10. BST 5,18,235/- 1998 – 99 Deputy Commissioner. Sales Tax (Appeal)

11. BST 25,456/- 1999 – 00 Deputy Commissioner. Sales Tax (Appeal)

12. CST 2,94,689/- 1999 – 00 Deputy Commissioner. Sales Tax (Appeal)

13. CST 2,34,529/- 2000 - 01 Deputy Commissioner. Sales Tax (Appeal)

14. BST 1,59,096/- 2001 - 02 Deputy Commissioner. Sales Tax (Appeal)

15. CST 1,77,712/- 2001 - 02 Deputy Commissioner. Sales Tax (Appeal)

16. BST 74,168/- 2002 - 03 Deputy Commissioner. Sales Tax (Appeal)

17. CST 60,500/- 2002 - 03 Deputy Commissioner. Sales Tax (Appeal)

Regarding Sl no. 3 to 17 stay for recovery has been granted in view of decision in P.V. Textiles case read with section 33(4)(c) of the BST Act, 1959 pending decision of the Bombay High Court.

c. The GVAT Payable of earlier years amounts to Rs. 27,06,353/- 10. The accumulated losses at the end of the financial year is Rs. 6,42,85,307/- (P.Y. Rs 6,64,22,072/-) The company has not incurred any cash losses during the year though there were cash losses in the immediately preceding financial year.

11. There are no dues to any financial institutions.

12. Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. 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.

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

15. Company has not given guarantees for loans taken by others from bank or financial institutions.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised during the year on short term basis have been used for long term investment.

18. The Company has not any made preferential allotment of shares to parties and companies covered in the register maintained under Section 301of the act during the year.

19. According to the information and explanations given to us, the Company has not issued any debentures.

20. The Company has not raised money by public issues during the year.

21. According to the information and explanations given to us, no fraud on or by the Company has been notice or reported during the course of our audit.

For D.C.BOTHRA & CO; CHARTERED ACCOUNTANTS, FIRM REGN. NO. 112257W

(SEEMA RAISONI, M.No.107730) PARTNER

PLACE : MUMBAI

DATED : 26.05.2014


Mar 31, 2013

REPORT ON THE FINANCIAL STATEMENTS

We have audited the attached financial statement of STERLING STRIPS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss Account and the Cash flow statement for the year ended March 31, 2013 and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

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

AUDITOR''S RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION

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

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s report) (Amendment) Order, 2004 (together the "Order") issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956 of India (the Act), and we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2 i. The job card maintained by the company for manufacturing work carried out do not provide the full details of materials received, consumed and direct overheads incurred on the respective jobs.

ii. Payments received, made and adjusted in the parties accounts consisting debtors, creditors, loans, advances, deposits are generally not supported with the corresponding receipts of such payments received or made to or from the respective party and authenticity of the same couldn''t be verified for want of appropriate evidence.

iii. Company is subject to interest liability on unpaid statutory dues and on other dues same has neither been paid nor provided or quantified.

iv. Loans & Advances to and from suppliers, others, sundry debtors, sundry creditors for goods & expenses are unconfirmed and in our opinion substantially unrealizable / payable.

v . The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at the year and together with interest paid / payable under this Act have not been given.

vi. The Company has not made provision for Doubtful Debts.

3. Subject to what is stated above:

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 for as appears from our examination of the books;

c) The Balance Sheet and the 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 representation received from the Directors, as on 31st March 2013 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2013 from being appointed as Directors under Section 274(1)(g) of Companies Act, 1956.;

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

ANNEXURE TO THE AUDITOR''S REPORT OF EVEN DATE REFFERED IN PARA NO.3

On the basis of information & explanation given to us, we report that: -

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

b. Management has informed that they have verified fixed assets and no material discrepancy was noticed by them, which requires any adjustment in accounts.

c. Substantial part of fixed assets have not been disposed off during the year, therefore there is no effect of this on concept of going concern.

2 a. As informed to us, the stocks of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals.

b. On the basis of information and explanations furnished to us, in our opinion the procedures of physical verification of stocks followed by the management, wherever it is carried out, are reasonable in relation to the size of the Company and the nature of its business, however, the same is required to be further strengthened.

c As informed to us, no major discrepancies have been noticed by the management on their physical verification of stock as compared to the book records and the same is properly accounted.

3 a The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

b i) The Company has taken loans, secured or unsecured from companies, firms or other parties, free of interest, listed in the Register maintained under Section 301 of the Companies Act, 1956.

ii) The terms & conditions of such loan taken have not been laid down in writing, however, as informed to us, the same are not prejudicial to the interest of the company.

iii) The terms of repayments of principal have not been laid down in writing hence, we cannot comment on regularity or otherwise of the same.

4. There is exists internal control system commensurate with the size of the company & the nature of its business, for the purchase of inventory and fixed assets and for sale of Goods & Services which in our opinion needs to be further strengthened. However, as informed to us, the purchase of stores, raw material including components, plant and machinery, equipment and other assets are being personally supervised by the management, therefore much documentation for subsequent verification are not available.

5 As have been informed to us Company has maintained the register in pursuance of section 301 of the Companies Act , 1956, particulars of contracts or arrangements referred to in S-301 of the Act have been entered.

6. The Company has not accepted any deposits during the year from the public under Section 58-A or 58AA of the Companies Act, 1956, in contravention of rules made thereunder.

7 The Company has a formal internal audit system commensurate with the size and nature of its business.

8 Maintenance of cost records for the manufacturing activities of the Company has not been prescribed by the Central Government under Section 209 (1) (d) Companies Act, 1956.

9 a. Most of the undisputed statutory dues, Investor Education and Protection Fund, Income Tax, Sales Tax etc. have not been deposited during the year the details of such arrears excluding interest payable thereon, which is not ascertainable, as at the last day of the financial year for a period of more than six months are as under.

The above amount of Sales Tax arrears do not include the amount due for payment, quantum not ascertained, under deferral scheme where the total outstanding amount of Rs. 2,44,46,488/- have been shown as loan against Sales Tax Collection.

Regarding Sl no. 3 to 17 stay for recovery has been granted in view of decision in P.V.Textiles case read with section 33(4)(c) of the BST Act, 1959 pending decision of the Bombay High Court.

10 The accumulated losses at the end of the financial year is Rs. 6,64,22,072/- (P.Y. Rs 5,83,01,523/-) The company

has not incurred any cash losses during the year and in the immediately preceding financial year.

11. There are no dues to any financial institutions.

12 Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 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.

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

15 Company has not given guarantees for loans taken by others from bank or financial institutions.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised during the year on short term basis have been used for long term investment.

18. The Company has not any made preferential allotment of shares to parties and companies covered in the register maintained under Section 301of the act during the year.

19 According to the information and explanations given to us, the Company has not issued any debentures.

20 The Company has not raised money by public issues during the year.

21 According to the information and explanations given to us, no fraud on or by the Company has been notice or reported during the course of our audit.

For D.C.BOTHRA & CO.,

CHARTERED ACCOUNTANTS,

FIRM REGN. NO. 112257W

(SEEMA RAISONI, M.No.107730)

PARTNER

PLACE : MUMBAI

DATED : 30.05.2013


Mar 31, 2010

1. We have audited the attached Balance Sheet of STERLING STRIPS LIMITED, as at 31st March, 2010. and the Profit and 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.

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

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Company Law Board in terms of section 227 (4A) of the Companies Act, 1956, and on the basis of such checks of books and records as we considered appropriate and in terms of explanations given to us we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order to the extent applicable.

4. On the basis of representation received from the Directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as Directors under Section 274(1 )(g) of Companies Act, 1956.

5. i. The job card maintained by the company for manufacturing work carried out do not provide the full details of materials received, consumed and direct overheads incurred on the respective jobs.

ii. Total debts shown by the company at Rs.413.31 lacs ( P.Y. 343.80 lacs) consists of debts outstanding for more than 3 years at Rs.227.58 lacs ( P.Y. Rs. 195.46 Lacs), which in our opinion is bad & doubtful of recovery. Debts which are outstanding within 3 years are also substantially stagnant irrecoverable & unconfirmed. No provision is made by the company in this regard.

iii. Payments received, made and adjusted in the parties accounts consisting debtors, creditors, loans, advances, deposits, allotment money and calls in arrear are generally not supported with the corresponding receipts of such payments received or made to or from the respective party and authenticity of the same couldnt be verified for want of appropriate evidence..

iv Company is subject to interest liability on unpaid statutory dues and on other dues same has neither been paid nor provided or quantified.

v. Loans & Advances to and from suppliers, others, sundry debtors, sundry creditors for goods & expenses are. unconfirmed and in our opinion substantially unrealisable/payable. , ¦ . "

vi. Neither provision have been made towards unexpired period of guarantee & warranty extended to the customers or for uncompleted jobs for orders executed during the year, nor the cost required to be incurred in this regard have been ascertained.

vii. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at the year and together with interest paid / payable under this Act have not been given.

vii. We are unable to quantity the effect of above facts in sub para (i) to (vii) for want of relevant information and the effect thereof on the profit for the year ended or on the state of affairs of the company as at 31st March, 2010.

Subject to what is stated above:

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

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

c) The Balance Sheet and the 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) In our opinion and to the best of our information and according to the explanations given to us the said accounts subject to our observations above and else where in this report and annexure to it, the 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 :

i. in the case of the Balance Sheet, of the state of the affairs of the company as at 31st March, 2010 and,

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

iii. in the case of the Cash Flow statement, of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT OF EVEN DATE REFFERED IN PARA NO.3 On the basis of information & explanation given to us, we report that: -

1 a The Company has maintained records showing particulars including quantitative details and situation of fixed assets which is required to be updated.

b. Management has informed that they verified fixed assets and no material discrepancy was noticed by them, which requires any adjustment in accounts.

c. Substantial part of fixed assets have not been disposed off during the year, therefore there is no effect of this on concept of going concern.

2 a. As informed to us, the stocks of finished goods, stores, spare parts and raw materials have been physically verified by the management at reasonable intervals.

b. On the basis of information and explanations furnished to us, in our opinion the procedures of physical verification of stocks followed by the management, wherever it is carried out, are reasonable in relation to the size of the Company and the nature of its business, however, the same is required to be further strengthened.

c. As informed to us, no major discrepancies have been noticed by the management on their physical verification of stock as compared to the book records and the same is properly accounted.

3 a. The Company has not granted any loans, secured or unsecured to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956. b The Company has not taken any loans, secured or unsecured from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

4. There is adequate internal control system commensurate with the size of the company & the nature of its business, for the purchase of inventory and fixed assets and for sale of Goods & Services. However, the purchase of stores, raw material including components, plant and machinery, equipment and other assets are being personally supervised by the management, therefore much documentation for subsequent verification are not available.

5 As have been informed to us Company has maintained the register in pursuance of section 301 of the Companies Act, 1956, however during the year there are no such transactions .

6. The Company has not accepted any deposits during the year from the public under Section 58-A or 58AA of the Companies Act,1956.

7 The Company was not having any formal internal audit system during the year under audit.

8 Maintenance of cost records for the manufacturing activities of the Company has not been prescribed by the Central Government under Section 209 (1) (d) Companies Act, 1956.

9 a. Most of the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income Tax, Sales Tax etc. have not been deposited during the year the details of such arrears excluding interest payable thereon, which is not ascertainable, as at the last day of the financial year for a periodW morethansix months are as under.

Year Lease Tax Payable Provident Fund Investor Education & Protection Fund Income Tax CST

2007-08 128,175

2006-07

2005-06 - 1,37,468

2004-05 - 6,29,523

2003-04 - 21,369 5,827

2002-03 - 35,622 -

2001-02 - 14,698 Amount not ascertainable -

2000-01 - 13,424 -

1999-00 - 54,205 -

1998-99 19,812 52,823 7,79,715 87,431

1997-98 39,624 -

1996-97 - -

TOTAL 39,436 1,92,141 7,79,715 9,88,424



Year BST VAT TDS Payable Service Tax

2007-08

2008-07 2,70,911 37,200

2005-06 26,064

2004-03 - - 2003-04 - - 2002-03 - - 2001-02 - -

2000-01 - -

1999-00 - -

1998-99 6,666 -

1997-98 - - 99,196

1996-97 1,72,111

TOTAL 6.666 2.96,975 2,71,307 37.200

The above amount of Sales Tax arrears do not include the amount due for payment, quantum not ascertained, under deferral scheme where the total outstanding amount of Rs. 2,44,46,488/- have been shown as loan against Sales Tax Collection.

b. Following dues are disputed by the company and the disputes are pending as under :-

SL No. Nature of Amount Period to which Dispute Rs. amount relate

1 BST 2,58,423/- 1994-95

2. CST 3,13,811/- 1994-95

3 BST 12,78,212/- 1995-96

4. CST 3,99,738/- 1995-96

5. BST 24,93,119/- 1996-97

6. CST 1,94,375/- 1996-97

7. BST 10,10,488/- 1997-98

8. CST 13,43,443/- 1997-98

9. CST 10,40,000/- 1998-99

10. BST 5,18,235/- 1998-99

11. BST 25,456/- 1999-00

12. CST 2,94,689/- 1999-00

13. CST 2,34,529/- 2000-01

14. BST 1,59,096/- 2001-02

15. CST 1,77,712/- 2001-02

16. BST 74,168/- 2002-03

17. CST 60,500/- 2002-03

Nature of Forum where dispute pending Dispute

BST Maharashtra Sales Tax Tribunal CST Maharashtra Sales Tax Tribunal BST Deputy Commissioner. Sales Tax (Appeal) CST Deputy Commissioner. Sales Tax (Appeal) BST Deputy Commissioner. Sales Tax (Appeal) CST Deputy Commissioner. Sales Tax (Appeal) BST Deputy Commissioner. Sales Tax (Appeal) CST Deputy Commissioner. Sales Tax (Appeal) CST Deputy Commissioner. Sales Tax (Appeal) BST Deputy Commissioner. Sales Tax (Appeal) BST Deputy Commissioner. Sales Tax (Appeal) CST Deputy Commissioner. Sales Tax (Appeal) CST Deputy Commissioner. Sales Tax (Appeal) BST Deputy Commissioner. Sales Tax (Appeal) CST Deputy Commissioner. Sales Tax (Appeal) BST Deputy Commissioner. Sales Tax (Appeal) CST Deputy Commissioner. Sales Tax (Appeal)

Regarding Sl no. 3 to 17 stay for recovery has been granted in view of decision in P.V.Textiles case read with section 33(4)® of the BST Act, 1959 pending decision of the Bombay High Court.

10 The accumulated losses at the end of the financial year is Rs. 4,87,01,774 (previous year Rs 5,58,94,764/-) .The company has not incurred any cash losses during the year and in the immediately preceding financial year. 11. In our opinion and according to the information and explanations given to us, the Company has arrived at a settlement of its dues with Kotak Mahindra Bank and after payment of settlement amount obtained No Dues Certificate from them.( State Bank of Travancore, the Lead Bank, having assigned their rights in the companys account to Kotak Mahindra Bank Ltd.) and State Bank of Wore.

The Company has paid settlement amount to State Bank of Indole and obtained No Dues Certificate from them. In respect of se«lementw* Kotak Mahindra Bank Ud, all due pay amount has been made during the year.

12 Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13 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 (Auditors Report) Order, 2003 are not applicable to the Company.

14 In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore the provisions of clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15 Company has not given guarantees for loans taken by others from bank or financial institutions.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised during the year on short term basis have been used for long term investment. No long term funds have been raised during the year.

18. According to the information and explanations given to us, the Company has not made any preferential allotment of shares.

19 According to the information and explanations given to us, the Company has not issued any debentures.

20 The Company has not raised money by public issues during the year.

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

FOR D.C.BOTHRA&CO., CHARTERED ACCOUNTANTS

(PAWAN BOTHRA M. NO. 31215) PARTNER

PLACE : MUMBAI

DATE: 27.05.10

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