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Auditor Report of SVC Superchem Ltd.

Mar 31, 2017

INDEPENDENT AUDITORS'' REPORT To the Members of, SVC Superchem Limited Report on the Financial Statements

We have audited the accompanying financial statements of SVC Superchem Limited which comprise the Balance Sheet as at 31 March 2017 and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. No Profit and Loss Account has been prepared as no commercial production has started on the date of Balance sheet and no trading or servicing activities were carried on during the year ended on that date.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters 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 and financial performance 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 includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements in compliance with the provisions of all applicable laws on a going concern basis that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 true and fair view 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 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, they said accounts together with the notes thereon, subject to (i) Note No.15 regarding losses, if any, due to impairment of assets or its status of being going concern, (ii) Note No. 16 regarding non- provision of interest of Rs. 235.97 crore (iii) Note No. 5(d) regarding non-provision of lease rentals and late payment charges on such Lease Rentals, (iv) Note No.

22 regarding amount due to micro, small and medium enterprises creditors and (v) Note No.2.12 of Notes forming the part of financial statement regarding AS-15 "Employees benefits” give the information required by the Companies Act,2013 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 Balance Sheet, of the state of affairs of the company as at 31st March,2017;

ii. in the case of Cash Flow Statement, of the Cash Flow for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order”) (CARO 2016) 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) 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 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 and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d. In our opinion, the financials statement dealt with by this report comply with the accounting standards referred to under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. Our observations and comments on financial transactions and matters which have any adverse effect on the functioning of the company are given in our opinion as above.

f. On the basis of written representations received from the directors of the company as on 31st March 2017, and taken on record by the Board, we report that none of the directors is disqualified as at 31st March 2017 from being appointed as a director under Section 164(2) of the Act.

g. The qualification, reservation and adverse remarks pertaining to maintenance of accounts and other matters connected therewith are given in our opinion as above.

h. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in "Annexure B”

i. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Company (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanation given to us.

a) The Company has disclosed the impact of pending litigations on its financial position in its financial statements subject to Note No. 5(a-e),14,16,20 to the financial statements;

b) There are no foreseeable losses on any long term contract including derivative contracts as required under the applicable law or accounting standards;

c) According to records of the company, there are no amounts that are due to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under.

d) The Company has provided requisite disclosures in its financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company. Refer note no 25 to the financial statements

Annexure (A) to the Independent Auditor''s Report

The annexure required under CARO, 2016 (“Order”) referred to in our report to the members of SVC Superchem Limited (“the company”) for the year ended 31st March 2017. We report that:

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

b) Some of the fixed assets have been physically verified by the management at reasonable intervals. We were informed that no material discrepancies except as mentioned in note no.15 of notes forming the part of financial statement have been noticed on such verification ;

c) The title deeds of immovable properties are held in the name of the company for 236.83 acres and in the name of some of the present and earlier directors for 24.14 acres.

ii) The company has maintained proper records of inventory & no material discrepancies were noticed on physical verification during the year.

iii) The company has not granted loans to the parties covered in the register maintained under section 189 of the Act . Consequently, requirement of clause (iii)(a), (iii)(b) and

(iii)(c) of paragraph 3 of the order are not applicable.

iv) The company has not advanced any loan or given any guarantee or provided any security or made any investment covered under section 185 and 186 of the Act. Consequently, requirements of clause (iv) of paragraph of the order are not applicable;

v) The Company has not accepted any deposits, from the public within the meaning of 73 to 76 of the Act and rules framed there under. Consequently, requirements of clause

(v) of paragraph of paragraph 3 of the order are not applicable;

vi) Maintenance of cost records under section 148(1) of the act as prescribed by the Central Government is not applicable to the company as the company is yet to start commercial production.

vii) a) According to the records of the company, it is regular in depositing undisputed statutory dues such as Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service Tax and any other statutory dues whichever is applicable to the company with the appropriate authorities.

b) The disputed statutory dues aggregating Rs.248.23 lacs that have not been deposited on account of disputed matters pending before appropriate authorities. Out of the above, a sum of Rs.2.63 lac has been deposited under protest. The details of disputed statutory dues are as under :

Sl.

No.

Name of the Statute

Nature of dues

Amount (Rs. In lacs)

Period to which amount relates

Forum where dispute is pending

1

UP VAT Act

VAT/

Penalty

0.82

2007-08

Appellate

Tribunal,

Agra

2

-do-

-do-

1.81

2008-09

-do-

3

Excise

Act

Penalty

127.95

1997-99

CESTAT,

Delhi

4

Customs

Act

Penalty

2.00

2010-11

CESTAT,

Delhi

5

Provident Fund Act

Demurrage

20.08

1995-2003

Allahabad High court

6

Customs

Act

Custom

duty

95.57

2003-04

Commissioner of central excise and customs, Luck now

Total

248.23

viii. Due to non commencement of commercial operations for more than a decade causing non-servicing of its debts, the Company has defaulted on the dues of State Bank of India (NCD), Canara Bank & PICUP for aggregate amount of Rs.56.11 Crore. Interest at original documented rate not - provided by the company on above loan for the year ended 31st March 2017 are Rs. 235.97 crore.

ix) a) The company during the year under report has not raised

moneys by way of further public offer;

b) According to the information and explanation given to us, The company has raised during the year unsecured loans of Rs. 18 lacs and have used for the purpose of maintaining the project and debited to capital work-in-progress and is for long Term purpose. Company has not utilized any long term loan for any short term purpose;

x) According to the information and explanation given to us, no material fraud by the company or on the company has been noticed or reported during the year.

xi) According to the information and explanation given to us, Company has not paid managerial remuneration during the year. Consequently, clause (xi) of paragraph 3 of the order is not applicable;

xii) The company is not a Nidhi Company. Consequently, requirements of clause (xii) of paragraph 3 of the order are not applicable.

xiii) According to the information and explanation given to us, All transactions with the related parties are in compliance with sections 177 and 188 of Act where applicable and the details have been disclosed in the Financial Statements etc., as required by the applicable accounting standards;

xiv) According to the information and explanation given to us, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Consequently, requirement of clause (xiv) of paragraph 3 of the order are not applicable;

xv) According to the information and explanation given to us, the company has not entered into any non-cash transactions with directors or persons connected with him ;

xvi) According to the information and explanation given to us, the company is not required to be registered under section 45 IA of Reserve Bank of India Act, 1934.

ANNEXURE - "B” TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF SVC SUPERCHEM LIMITED

Report on the Internal Financial Controls under clause (i) of Subsection 3 of section 143 of the Companies Act , 2013 (“the Act”)

We have audited the accompanying internal financial controls over financial reporting of SVC Superchip Limited, (“the company'''') as of March 31, 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for the Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls over financial reporting criteria as established by the company considering the essential components of internal controls commensurate with the size of organizations, its operating and financial status. These responsibility includes the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance note on audit of Internal Financial controls over Financial reporting (the “Guidance Note”) and the standard on auditing, issued by ICAI and deemed to be prescribed under section 143 (10) of the companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and , both issued by the Institute of chartered Accountants of India. Those standards and guidance note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance that whether internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exits, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial misstatement, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial controls over financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; 2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with authorizations of management and directors of the company; and 3) provide reasonable assurance regarding prevention of timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to fraud or error may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting commensurate with the size of organizations, its operations and financial status and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on “the internal controls over financial reporting criteria established by the company considering the essential components of internal control stated in the guidance Note on audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India”

For B.M. CHATURVEDI & Co.

Chartered Accountants ICAI FRN: 114317W

(B.M.Chaturvedi)

Partner

ICAI MN. 017607

Place : Mumbai Date : 3rd May, 2017


Mar 31, 2015

We have audited the accompanying Financial Statements of SVC Superchem Limited which comprise the Balance Sheet as at 31 March 2015 and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. No Profit and Loss Account has been prepared as no commercial production has started on the date of Balance sheet and no trading or servicing activities were carried on during the year ended on that date.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters 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 and financial performance 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 includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements in compliance with the provisions of ail applicable laws on a going concern basis 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 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 true and fair view 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audh 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 said accounts together with the notes thereon, subject to

(i) Note No. 15 regarding non- provision of interest of Rs. 1301.86 crore,

(ii) Note No.16 regarding losses, if any, due to impairment of assets or its status of being going concern,

(iii) Note No.25 regarding non-provision of lease rentals and late payment charges on such Lease Rentals, (iv) Note No.26 regarding amount due to micro, small and medium enterprises creditors and (v) Note No.2 12 of Notes forming the part of financial statement regarding AS-15 "Employees benefits" give the information required Dy the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted ri India.:

i) in the case of the Balance Sheet, of the State of Affairs of the Company as at 31 March 2015;

(ii) 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, 2015 ("the Order") (CARO 2015) 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.

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

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

b. In our opinion, proper books of account as required by law have been kept by the company so far as appear from our examination of those books.

c. The Balance Sheet and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d. In our opinion, the Financials statement dealt with by this report comply with the accounting standards referred to under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. Our observations and comments on financial transactions and matters which have any adverse effect on the functioning of the company are given in our opinion as above.

f. On the basis of written representations received from the directors of the company as on 31st March 2015, and taken on record by the Board, we report that none of the Directors is disqualified as at 31st March 2015 from being appointed as a Director under Section 164(2) of the Companies Act, 2013.

g. The qualification, reservation and adverse remarks pertaining to maintenance of accounts and other matters connected therewith are given in our opinion as above.

h. The company has adequate internal financial control systems in place and is operating effectively.

i. 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) Rufes, 2014, in our opinion and to the best of our information and according to the explanations given to us:

a) The Company has disclosed the impact of pending litigations on its financial position in its financial statements subject or Note No. 5(a-g). 14,15 ,21.24 & 30 to the financial statements.

b) There are no forseeable losses on any long term contract including derivative contracts.

Annexure to the Auditor's Report

The annexure referred to in ou r report to the members of SVC Superchem Limited.("the Company') for the year ended on 31st March 2015 of even date, we report that-

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

(b) The fixed assets have been physically verified by the management during the reported period at reasonable intervals; We were informed that no material discrepancies except as mentioned in note no.16 of notes forming the part of financial statement have been noticed on such verification -

II. The company has maintained proper records of inventory & no material discrepancies were noticed on physical verification during the year.

III. The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act 1956.

IV. In our opinion and according to the information and explanations given to us, there is adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods.

V. The Company has not accepted any deposits, from the public within the meaning of 73 to 76 of the Act and rules framed thereunder.

VI. Maintenance of cost records under section 148(1) of the act as prescribed by the Central Government is not applicable to the company as the company is yet to start commercial! production.

VII. According to the information and explanations given to us:

a. The Company is regular in depositing undisputed statutory dues such as Provident Fund, Employees' State Insurance, Income-Tax, Service Tax and any other statutory dues whichever is applicable to the Company with the appropriate authorities.

b. The disputed statutory dues aggregating Rs.152.58 lacs that have not been deposited on account of disputed matters pending before appropriate authorities. Out of the above, a sum of Rs.2.63 lac has been deposited under protest. The details of disputed statutory dues are as under;

c. According to the records of the Company, there are no amounts that are due to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies

Act, 1956 and rules made there under other than a sum of Rs.60 lacs. Which are head in abeyance due to pending legal cases.

SI. Name of Nature of Amount Period to Forum where No. the Statute dues (Rs. In lacs) which dispute is amount pending relates

1 UP Vat VAT/ 0.82 2007-08 Appellate Act Penalty Tribunal, Agra

2. -do- -do- 1.81 2008-09 -do-

3 Excise Act Penalty 127.95 1997-99 CESTAT Delhi

4 Customs Penalty 2.00 2010-11 CESTAT Act Delhi

5 Provident Demurrage 20.00 1995- Allahabad Fund Act 2003 High Court

Total 152.58

VIII. The company has yet to commence commercial operations and no profit and loss account has been prepared, hence subject to Note no. 16 of Notes forming the part of financial statement neither company has suffered any cash loss during the financial year nor it has accumulated any losses.

IX. The company has not paid any dues of Banks / Financial Institutions as per original documented re-payment schedule and has defaulted on the same and the matter is now pending before the Debt Recovery Tribunal as referred In Note 14 and 15 of Notes forming the part of financial statement. Several banks and Financial Institutions, who have provided long term loans and working capital finance along with outstanding interest thereon, has filed legal cases with Debt Recovery Tribunal for recovery of their entire dues as mentioned in Note no.5(a-g)and note no. 25 of Notes forming the part of financial statement.

X The Company has not given any guarantee for loans taken by others from banks or financial institutions.

XI. The company has raised during the year unsecured loans of Rs. 187.24 lacs and have used for the purpose of maintaining the project and debited to capital work-in-progress and is for long Term purpose. Company has not utilized any long term loan for any short term purpose.

XII. In our opinion and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For B.M.Chaturvedi &Co.

Chartered Accountants

ICAI FRN 114317W

(Animesh Kumar Dutta)

ICAI. M.N. 132389

Partner

Place s MUMSAI

Dated ; 23.05.2015


Mar 31, 2014

We have audited the accompanying financial statements of SVC Superchem Limited which comprise the Balance Sheet as at 31 March 2014 and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. No Profit and Loss Account has been prepared as no commercial production has started on the date of Balance sheet and no trading or servicing activities were carried on during the year ended on that date.

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") read with general circular 15/2013 dated 13th September 2013 of the ministry of corporate affairs in respect of section 133 of Companies Act,2013 in accordance with accounting principles generally accepted in India. 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 said accounts together with the notes thereon, subject to (i) Note No. 15 regarding non- provision of interest of Rs. 1092.59 crore read with Note No.21, (ii) Note No.16 regarding losses, if any, due to impairment of assets or its status of being going concern, (iii) Note No.25 regarding non-provision of lease rentals and late payment charges on such Lease Rentals, (iv) Note No.26 regarding amount due to micro, small and medium enterprises creditors and (v) Note No.2.12 of Notes forming the part of financial statement regarding AS-15 "Employees benefits" 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 31 March 2014;

(ii) 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 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d. In our opinion, the Balance Sheet and Cash Flow Statement dealt with by this report comply, subject to Note No 2.12 and other notes as per notes forming the part of financial statement with the mandatory accounting standards referred to in Sub-Section (3C) of Section 211 of Companies Act, 1956 read with general circular 15/2013 dated 13th September 2013 of the ministry of corporate affairs in respect of section 133 of Companies Act,2013.

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

Annexure to the Auditor''s Report The annexure referred to in our report to the members of SVC Superchem Limited.("the Company'') for the year ended on 31st March 2014 of even date , we report that:-

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

(b) The fixed assets have been physically verified by the management during the reported period at reasonable intervals; We were informed that no material discrepancies except as mentioned in note no.16 of notes forming the part of financial statement have been noticed on such verification.

(c) No substantial part of fixed assets has been disposed of by the company during the year.

II. (a) As explained to us, physical verification of inventory has been conducted at reasonable intervals by the management.

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

(c) The company has maintained proper records of inventory & no material discrepancies were noticed on physical verification during the year.

III. (a) The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act 1956. The company has taken i n terest free u n secu red l oan s from two companies listed in the register maintained under section 301 of the Act 1956 aggregating to Rs. 215.96 lacs during the year. Total outstanding at the year end is Rs. 3,337.07 lacs.

(b) The above referred loans are interest free and other terms and conditions of the above referred loans taken by the company are not prima facie prejudicial to the interest of the company.

(c) There is no overdue amount in respect of above referred loan taken by the company since these are repayable on demand and as informed to us it has not been called back by the lenders, therefore the question of overdue amount does not arise.

IV. In our opinion and according to the information and explanations given to us, there is adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods.

V. During the year, the company has not entered into any transaction that needs to be entered in the register maintained under section 301 of the Act.

VI. The Company has not accepted any deposits, from the public within the meaning of Section 58A and 58AA of the Act and rules framed thereunder.

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

VIII. Maintenance of cost records under section 209 (1)(d) of the companies act as prescribed by the Central Government is not applicable to the company as the company is yet to start commercial production.

IX. According to the information and explanations given to us :

a. The Company is regular in depositing undisputed statutory dues such as Provident Fund, Employees'' State Insurance, Income-Tax, Wealth Tax, Service Tax and any other statutory dues whichever is applicable to the Company with the appropriate authorities except penalty on MODVAT / CENVAT for Rs. 127.95 lacs has not been paid (less than six months) from the date it has become payable and company is in process of filing an appeal in due course of time before CESTAT, Delhi.

b. The disputed statutory dues aggregating Rs.24.63 lacs that have not been deposited on account of disputed matters pending before appropriate authorities are as under :

Sl. Name of Nature of Amount Period to Forum where No. the Statute Dues (Rs. in which dispute is lacs) amount pending relates

1 UP Vat Act VAT/Penalty 0.82 2007-08 Appellate Tribunal Agra

-do -do- 1.81 2008-09 -do-

2 Customs Penalties 2.00 2010-11 Central Excise Act and Service Tax Appellate Tribunal Delhi

3 Provident Demurrage 20.00 1995-2003 Allahabad Fund Act High Court

Total 24.63

X. The Company is yet to commence commercial operations and no profit and loss account has been prepared, hence subject to Note no. 16 of Notes forming the part of financial statement neither company has suffered any cash loss during the financial year nor it has accumulated any losses.

XI. The Company has not paid any dues of Banks / Financial Institutions as per original documented re- payment schedule and has defaulted on the same and the matter is now pending before the Debt Recovery Tribunal as referred in Note 14 and 15 of Notes forming the part of financial statement. Several banks and Financial Institutions, who have provided long term loans and working capital finance along with outstanding interest thereon, has filed legal cases with Debt Recovery Tribunal for recovery of their entire dues as mentioned in Note no.5(a-g)and note no. 25 of Notes forming the part of financial statement.

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

XIII. The Company is not engaged in any chit fund business / nidhi / mutual benefit fund / societies.

XIV. The Company is not dealing or trading in shares, securities, debentures and other investments.

XV. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

XVI. The Company has not received any Term loans during the year.

XVII. The Company has raised during the year unsecured loans of Rs. 215.96 lacs and have used for the purpose of maintaining the project and debited to capital work-in-progress and is for long Term purpose. Company has not utilized any long term loan for any short term purpose.

XVIII. The Company has not made any preferential allotment of shares during the year.

XIX. The Company has not issued any debenture during the year.

XX. The Company has not raised any money by way of Public Issue during the year.

In our opinion and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For B. M. CHATURVEDI & CO.

Chartered Accountants ICAI-FRN - 114317W

Animesh Kumar Dutta

ICAI. M.No. 132389 (Partner)

Place : Mumbai Dated : 29th May, 2014.


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of SVC Superchem Limited which comprise the Balance Sheet as at 31 March 2013 and the Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information. No Profit and Loss Account has been prepared as no commercial production has started on the date of Balance sheet and no trading or servicing activities were carried on during the year ended on that date.

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 said accounts together with the notes thereon, subject to (i)

Note No. 15 regarding non- provision of interest of Rs. 917.28 crore read with Note No.21, (ii) Note No.16 regarding losses, if any, due to impairment of assets or its status of being going concern, (iii) Note No.25 regarding non-provision of lease rentals and late payment charges on such Lease Rentals, (iv) Note No.26 regarding amount due to micro, small and medium enterprises creditors and (v) Note No.2.12 of Notes forming the part of financial statement regarding AS-15 "Employees benefits" 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 31 March 2013;

(ii) 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 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d. In our opinion, the Balance Sheet and Cash Flow Statement dealt with by this report comply, subject to Note No 2.12 and other notes as per notes forming the part of financial statement with the mandatory accounting standards referred to in Sub-Section (3C) of Section 211 of Companies Act, 1956.

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

Annexure to the Auditor''s Report

The annexure referred to in our report to the members of SVC Superchem Limited.("the Company'') for the year ended on 31st March 2013 of even date , we report that:- I. (a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets .

(b) The fixed assets have been physically verified by the management during the reported period at reasonable intervals; We were informed that no material discrepancies except as mentioned in note no.16 of notes forming the part of financial statement have been noticed on such verification.

(c) No substantial part of fixed assets has been disposed of by the company during the year.

II. (a) As explained to us, physical verification of inventory has been conducted at reasonable intervals by the management.

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

(c) The company has maintained proper records of inventory & no material discrepancies were noticed on physical verification during the year.

III. (a) The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act 1956. The company has taken interest free unsecured loans from two companies listed in the register maintained under section 301 of the Act 1956 aggregating to Rs.208.25 lacs during the year. Total outstanding at the year end is Rs. 3133.47 lacs.

(b) The above referred loans are interest free and other terms and conditions of the above referred loans taken by the company are not prima facie prejudicial to the interest of the company.

(c) There is no overdue amount in respect of above referred loan taken by the company since these are repayable on demand and as informed to us it has not been called back by the lenders, therefore the question of overdue amount does not arise.

IV. In our opinion and according to the information and explanations given to us, there is adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods.

V. During the year, the company has not entered into any transaction that needs to be entered in the register maintained under section 301 of the Act.

VI. The Company has not accepted any deposits, from the public within the meaning of Section 58A and 58AA of the Act and rules framed thereunder.

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

VIII.Maintenance of cost records under section 209 (1)(d) of the companies act as prescribed by the Central Government is not applicable to the company as the company is yet to start commercial production.

IX. According to the information and explanations given to us :

a. The Company is regular in depositing undisputed statutory dues such as Provident Fund, Investors Education and Protection Fund, Employees'' State Insurance, Income-Tax, Wealth Tax, Service Tax and any other statutory dues whichever is applicable to the Company with the appropriate authorities.

X. The company has yet to commence commercial operations and no profit and loss account has been prepared, hence subject to Note no. 16 of Notes forming the part of financial statement neither company has suffered any cash loss during the financial year nor it has accumulated any losses.

XI. The company has not paid any dues of Banks / Financial Institutions as per original documented re-payment schedule and has defaulted on the same and the matter is

now pending before the Debt Recovery Tribunal as referred in Note 14 and 15 of Notes forming the part of financial statement. Several banks and Financial Institutions, who have provided long term loans and working capital finance along with outstanding interest thereon, has filed legal cases with Debt Recovery Tribunal for recovery of their entire dues as mentioned in Note no.5(a-g)and note no. 25 of Notes forming the part of financial statement.

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

XIII.The company is not engaged in any chit fund business / nidhi / mutual benefit fund / societies.

XIV.The Company is not dealing or trading in shares, securities, debentures and other investments.

XV. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

XVI.The Company has not received any Term loans during the year.

XVII.The company has raised during the year unsecured loans of Rs.208.25 lacs and have used for the purpose of maintaining the project and debited to capital work-in- progress and is for long Term purpose. Company has not utilized any long term loan for any short term purpose.

XVIII.The company has not made any preferential allotment of shares during the year.

XIX. The company has not issued any debenture during the year.

XX. The company has not raised any money by way of Public Issue during the year.

XXI.In our opinion and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For B. M. CHATURVEDI & CO.

Chartered Accountants

ICAI-FRN - 114317W

B. M. CHATURVEDI

ICAI. M.No. 17607

(Partner)

Place : Mumbai

Dated : 24th May, 2013.


Mar 31, 2012

We have audited the attached Balance Sheet of SVC SUPERCHEM LIMITED, as at 31st March, 2012 and the Cash Flow Statement of the company for the year ended on that date, annexed thereto. No Profit & Loss Account has been prepared as no commercial production has started as on the date of Balance Sheet and no trading or service activities were carried on during the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

We report that,

1. 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.

2. 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.

3. The Balance Sheet and Cash Flow Statement dealt with by this report, are in agreement with the books of account.

4. In our opinion, the Balance Sheet and Cash Flow Statement dealt with by this report comply, subject to Note No.2(2.12) and other notes as per notes forming the part of financial statement with the mandatory accounting standards referred to in Sub-Section (3C) of Section 211 of Companies Act, 1956.

5. The company under report is covered U/S 274 (1)(g) of the companies act 1956. However, on the basis of written representation received from the Directors of the Company as on 31st March, 2012 and taken on the record by the Board, we report that none of the Directors are disqualified as on 31st March 2012 from being appointed as Director in the company in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon, subject to (i) Note No.15 regarding non-provision of interest of Rs.770.38crore read with Note No.21, (ii) Note No.16 regarding losses, if any, due to impairment of assets or its status of being going concern, (iii) Note No. 25 regarding non- provision of lease rentals and late payment charges on such Lease Rentals, (iv) Note No.26 regarding amount due to micro, small and medium enterprises creditors and (v) Note No.2(2.12) of Notes forming the part of financial statement regarding AS-15 “Employees benefits” 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 and

ii) In case of Cash Flow Statement, of the cash flow for the year ended on that date.

7. As required by the Companies (Auditors' Report) Order,

2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate. We further state that :-

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

(b) The fixed assets have been physically verified by the management during the reported period at reasonable intervals; We were informed that no material discrepancies except as mentioned in Note No. 16 of notes forming the part of financial statement have been noticed on such verification.

(c) No substantial part of fixed assets have been disposed of by the company during the year.

II. (a) As explained to us, physical verification of inventory has

been conducted at reasonable intervals by the management.

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

(c) The company has maintained proper records of inventory & no material discrepancies were noticed on physical verification during the year.

III. (a) The company has not granted any loans to companies,

firms or other parties listed in the register maintained under section 301 of the Companies Act 1956. The company has taken interest free unsecured loans from four companies listed in the register maintained under section 301 of the Act 1956 aggregating to Rs.574.06 Lacs and refunded Rs. 331.56 Lacs during the year. Total outstanding at the year end is Rs.2925.22 Lacs.

(b) The above referred loans are interest free and other terms and conditions of the above referred loans taken by the company are not prima facie prejudicial to the interest of the company.

(c) There is no overdue amount in respect of above referred loan taken by the company since these are repayable on demand and as informed to us it has not been called back by the lenders, therefore the question of overdue amount does not arise.

IV. In our opinion and according to the information and explanations given to us, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods ;

V. During the year, the company has not entered into any transaction that needs to be entered in the register maintained under section 301 of the Act.

VI. The Company has not accepted any deposits, from the public within the meaning of Section 58A and 58AA of the Act and rules framed thereunder.

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

VIII. Maintenance of cost records under section 209 (1)(d) of the companies act as prescribed by the Central Government is not applicable to the company as the company is yet to start commercial production

IX. According to the information & explanations given to us :

a) The company is regular in depositing indisputed statutory dues such as Provident Fund, Investors Education & Protection Fund, Employees' state Insurance, Income Tax, Wealth Tax, Saving Tax & any other statutory dues. Whichever is applicable to the company with the appropriate authorities.

b) The disputed statutory dues aggregating Rs. 24.63 lacs that have not been deposited on account of disputed matters pending before appropriate authorities are as under.

Sl No Name of Nature of Amount Period to which the Statute Dues (Rs. in Forum where amount lacs relates dispute is pending

1 UP Vat Act VAT/Penalty 0.82 2007-08 Appellate -do -do- 1.81 2008-09 Tribunal

2 Customs Penalties 2.00 2010-11 Central Excise Act, 1962 and Service Tax Appellate Tribunal

3 Provident Demurrage 20.00 1995-2003 Allahabad High Fund Act Court

Total 24.63

X. The company has yet to commence commercial operations and no profit and loss account has been prepared, hence subject to Note No. 16 of Notes forming the part of financial statement neither company has suffered any cash loss during the financial year nor it has accumulated any losses.

XI. The company has not paid any dues of Banks / Financial Institutions as per original documented re-payment schedule and has defaulted on the same and the matter is now pending before the Debt Recovery Tribunal as referred in Note 14 and 15 of Notes forming the part of financial statement. Several banks and Financial Institution, who have provided long term loans and working capital finance along with outstanding interest thereon, has filed legal cases with Debt Recovery Tribunal for recovery of their entire dues as mentioned in Note No.5(a-g) and Note No. 25 of Notes forming the part of financial statement.

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

XIII. The company is not engaged in any chit fund business / nidhi / mutual benefit fund / societies.

XIV. The Company is not dealing or trading in shares, securities, debentures and other investments.

XV. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

XVI. The Company has not received any Term loans during the year.

XVII.The company has raised during the year short term unsecured loans of Rs. 574.06 lacs and have used for the purpose of maintaining the project and debited to capital work-in-progress and is for long Term purpose. Company has not utilized any long term loan for any short term purpose.

XVIII.The company has not made any preferential allotment of shares during the year.

XIX. The company has not issued any debenture during the year.

XX. The company has not raised any money by way of Public Issue during the year.

XXI. In our opinion and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.



For and on behalf of the Board Jaffar Imam Director

For and on behalf of the Board Suresh V. Chaturvedi Promoter Director

Place : Mumbai. Date : 14th July, 2012.


Mar 31, 2010

We have audited the attached Balance Sheet of SVC SUPERCHEM LIMITED, as at 31st March, 2010 and the Cash Flow Statement of the company for the year ended on that date, annexed thereto. No Profit & Loss Account has been prepared as no commercial production has started as on the date of Balance Sheet and no trading or service activities were carried on during the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

We report that,

1. 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.

2. 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.

3. The Balance Sheet and Cash Flow Statement dealt with by this report, are in agreement with the books of account.

4. In our opinion, the Balance Sheet and Cash Flow Statement dealt with by this report comply, subject to Note No.A-12 and other notes in Schedule H with the mandatory accounting standards referred to in Sub-Section (3C) of Section 211 of Companies Act, 1956.

5. The company under report is covered U/S 274 (1)(g) of the companies act 1956. On the basis of written representation received from the Directors of the Company as on 31" March, 2010 and taken on the record by the Board, we report that none of the Directors is disqualified as on 31" March, 2010 from being appointed as Director in the company in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts together with the notes thereon, subject to (i) Note No.B-4 regarding losses, if any, due to impairment of assets or its status of being going concern, (ii) Note No.B-14 regarding non-provision for late payment charges on Lease Rentals, (iii) Note No. B-16 regarding non- provision of interest of Rs. 543.93 crore read with Note No.B-10(b), (iv) Note No.Bn15 regarding amount due to micro, small and medium enterprises creditors and (v) Note No.A-12 of Schedule H regarding AS-15 "Employees benefits" 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 31" March, 2010 and

ii) In case of Cash Flow Statement, of the cash flow for the year ended on that date.

7. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate. We further state that :-

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

(b) The fixed assets have been physically verified by the management during the reported period at reasonable intervals; We were informed that no material discrepancies except as mentioned in Note B-4 of Schedule H have been noticed on such verification.

(c) No substantial part of fixed assets have been disposed of by the company during the year.

II. (a) As explained to us, physical verification of inventory has been conducted at reasonable intervals by the management.

(b) In our opinion, according to explanation and information given to us, the procedures of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business. (c) The company has maintained proper records of inventory & no material discrepancies were noticed on physical verification during the year.

III. (a) The company has not granted any loans to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act 1956. The company has taken interest free unsecured loans from one of the company listed in the register maintained under section 301 of the Act 1956 aggregating to Rs.232.28 lacs and refunded Rs. 0.11 lacs during the year.

(b) The above referred loans are interest free and other terms and conditions of the above referred loans taken by the company are not prima facie prejudicial to the interest of the company.

(c) There is no overdue amount in respect of above referred loan taken by the company since these are repayable on demand and as informed to us it has not been called back by the lenders, therefore the question of overdue amount does not arise.

IV. In our opinion and according to the information and explanations given to us, there are adequate internal control procedure commensurate with the size of the Company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and for the sale of goods.

V. During the year, the company has not entered into any transaction that needs to be entered in the register maintained under section 301 of the Act.

VI. The Company has not accepted any deposits, from the public within the meaning of Section 58A and 58AA of the Act and rules framed thereunder.

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

VIII. Maintenance of cost records under section 209 (1)(d) of the companies act as prescribed by the Central Government is not applicable to the company as the company is yet to start commercial production.

IX. According to records of the company, current provident funds dues have been generally deposited with the appropriate authorities regularly.

X. The company has yet to commence commercial operations and no profit and loss account has been prepared, hence subject to Note B-4 of Schedule H neither company has suffered any cash loss during the financial year nor it has accumulated any losses.

XI. The company has not paid any dues of Banks / Financial Institutions as per original documented re-payment schedule and has defaulted on the same and the matter is now pending before the Debt Recovery Tribunal as referred in Note B-2 and B-3 of Schedule H. Several banks and Financial Institutions, who have provided long termloans and working capital finance along with outstanding interest thereon, has filed legal cases with Debt Recovery Tribunal for recovery of their entire dues as mentioned in Note B-1(a) to (g) and B-16 of Schedule H..

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

XIII. The company is not engaged in any chit fund business / nidhi / mutual benefit fund / societies.

XIV. The Company is not dealing or trading in shares, securities, debentures and otner investments.

XV. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

XVI. The Company has not received any loans during the year.

XVII. The company has raised during the year short term unsecured loans of Rs. 236.03 lacs and have used for the purpose of maintaining the project and debited to capital work-in-progress and is for long Term purpose. Company has not utilized any long term loan for any short term purpose.

XVIII. The company has not made any preferential allotment of shares during the year.

XIX. The company has not issued any debenture during the year.

XX. The company has not raised any money by way of Public Issue during the year.

XXI. In our opinion and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

For B. M. CHATURVEDI & CO.

Chartered Accountants ICAI-FRN-114317W

B. M. CHATURVEDI

ICAI.M.No. 17607

Place : Mumbai

Dated : 30th July, 2010.

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