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Auditor Report of Swadeshi Polytex Ltd.

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of Swadeshi Polytex Limited (''the Company'') which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit & Loss and the Cash Flow Statement for the year then ended and Notes to Financial Statements comprising of a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at 31st March 2015 and its Profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 (''the Order'') issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

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

e) On the basis of written representation received from the directors as on 31st March, 2015 taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2015 from being appointed as a Director in terms of Section 164(2) of the Act ; and

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 2.22.1 to the financial statements;

ii. We are explained that the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii. We are explained that there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditors'' Report

Referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our Report to the members of Swadeshi Polytex Limited for the year ended 31st March 2015. We report that:

(i) (a) The Company has maintained proper records showing full particulars including quantitative details

and situation of fixed assets.

(b) We are explained that the management has carried out the year end physical verification of majority of fixed assets. In our opinion, the frequency of the physical verification is reasonable having regard to the size and nature of operations of the company. We are explained that no material discrepancies were noticed on such physical verification.

(ii) (a) The only inventory in hand is in the form of lease hold plot rights, for which management has conducted

physical verification in the form of measurement, frequency of which in our opinion is reasonable;

(b) In our opinion and in view of nature of inventory, the action taken and procedures followed by the management for physical verification of inventory were found reasonable and adequate.

(c) In our opinion, the company has identified and maintained proper records in respect of various plots of land and no material discrepancies were noticed on the physical verification of the same as compared to book records.

(iii) (a) The Company has granted loan to a party covered in the register maintained under Section 189 of the

Companies Act, 2013 ("the Act").

(b) In the case of loan granted to the party listed in the register maintained under Section 189 of the Act, the borrower has been regular in the payment of interest as stipulated. We are explained that as per the terms of arrangement, the repayment of principal is yet to commence. Hence Clause iii (b) of the Order is not applicable in respect of repayment of the principal amount.

(iv) In our opinion and according to the information and explanations give to us, there are adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchase of fixed assets and trading activities. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weakness in the aforesaid internal control procedures.

(v) During the year under report, the company has not accepted any deposit from the public to which provisions of sections 73 to 76 of the Act and relevant rules framed there under apply.

(vi) We are informed that the maintenance of the cost records has not been prescribed by the Central Government u/s 148(1) of the Act for the company since no manufacturing activities were carried out by it during the year under report.

(vii) (a) According to the information and explanation given to us and on the basis of our examination of the books of account, the company has been regular in depositing the undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, value added tax, cess and any other material statutory dues applicable to it with the appropriate authorities.

(b) According to information and explanation given to us and on the basis of our examination of the books of accounts of the company, following are the details of sales tax/income tax/custom duty/wealth tax/ service Tax/excise duty/cess, which have not been deposited on account of any dispute.

Name of Nature of Amount Period Forum at which Statute Dues (in lacs) dispute is pending

Various Sales Tax 149.37 Various Various Forum Sales Tax Acts

The Central Excise Duty 165.22 Various CESAT & the Excise Supreme Court Act, 1944

The Central Penalty on 25.00 2012 CESAT Excise Excise Duty Act, 1944

The Customs Custom Duty 8.50 Various D. C. Customs Act, 1962 Mumbai

(c) According to information and explanation given to us, there were no amounts required 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.

viii) At the end of the current financial year, company''s accumulated losses were more than 50% of its net worth. Further, the company has not incurred cash losses during the current financial year as well as in the immediately preceding financial year.

ix) According to the information and explanation given to us, we are informed that the company had not borrowed any money from any bank or financial institution and had not issued debentures during the year under report.

x) According to the information and explanation given to us by the Management, the Company had not given any guarantee for loans taken by others from banks or financial institutions.

xi) We are informed that the Company had not obtained any term loans during the current financial year.

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

For SANMARKS & ASSOCIATES Chartered Accountants Firm''s Regn. No. 003343N

Sd/- Place: Faridabad S. K. BANSAL Date: 27th May, 2015 Partner Membership No.: 082242


Mar 31, 2014

We have audited the accompanying financial statements of Swadeshi Polytex Limited (‘the Company'') which comprise the Balance Sheet as at 31st March 2014, the Statement of Profit & Loss and the Cash Flow Statement for the year then ended and Notes to Financial Statements comprising of 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 controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, 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 the 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 judgement including the assessment of the risk of the 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 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principals generally accepted in India :

a) in the case of balance sheet, of the state of affairs of the Company as at 31st March 2014,

b) in the case of the Statement of Profit and Loss, of the Profit 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 (‘the Order'') issued by the Central Government of India in terms of Section 227(4A) 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, Statement of Profit & Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the Balance Sheet, Statement of Profit & Loss 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 (which continues to be applicable in respect of section 133 of the Companies Act, 2013 in terms of general circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

e) On the basis of written 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 a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

Annexure to the Independent Auditors'' Report

Referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our

Report to the members of Swadeshi Polytex Limited for the year ended 31st March, 2014. We report that:

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

(b) We are explained that the Company has carried out the year end physical verification of majority of fixed assets. In our opinion, the frequency of the physical verification is reasonable having regard to the size and nature of operations of the company. We are explained that no material discrepancies were noticed on such physical verification.

(c) The Company has not sold any part of fixed assets during the year, therefore the provision of the clause (i)(c) is not applicable.

(ii) (a) The only inventory in hand at the year end is in the form of lease hold plot rights, for which management has conducted physical verification in the form of measurement, frequency of which in our opinion is reasonable;

(b) In our opinion and in view of nature of inventory, the action taken and procedures followed by the management for physical verification of inventory were found reasonable and adequate.

(c) In respect of the trading activities, the company has identified and maintained records in respect of various plots of land and no material discrepancies were noticed on the physical verification of the same as compared to book records.

(iii) (a) We are explained that the Company has not granted any loans secured or unsecured to any Company, firm or other party required to be listed in the register maintained under Section 301 of the Companies Act 1956.

In view of clause (iii) (a) above, the clauses (iii)(b), (iii)(c) and (iii)(d) of the Order are not applicable.

(e) The company had taken secured loan from a body corporate and unsecured loan from another body corporate listed in the register maintained under Section 301 of the Companies Act 1956. The maximum amount involved for the said loans was Rs. 2495.30 lac for Secured Loan and Rs. 230.21 Lac for unsecured loans.

(f) In our opinion, the rate of interest and other terms and conditions of the aforesaid loans taken by the company, considering various factors, are prima facie not prejudicial to the interest of the company;

(g) In respect of the aforesaid secured loan, in our opinion the interest of Rs. 127.18 lac is overdue for payment. In respect of unsecured loan, it is informed that the same is repayable on demand. We are also informed that no such demand was raised for repayment of aforesaid unsecured loan during the year and therefore there was no overdue amount at the year end.

(iv) In our opinion and according to the information and explanations give to us, there are adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchase of fixed assets and Trading activities. Further, on the basis of our examination and according to the information and explanations given to us, we have neither came across nor have been informed of any instance of major weakness in the aforesaid internal control procedures.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the company has not entered into any transactions exceeding the aggregate amount of Rs. five lacs in respect of aforesaid parties during the year except the transactions under loan and interest thereon and reimbursement accounts.

(vi) The company has not, during the year, accepted any fixed deposit from the public to which provisions of section 58A & 58AA of the Companies Act, 1956 and relevant rules framed there under apply.

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

(viii) We are informed that the maintenance of the cost records has not been prescribed u/s 209 (1) (d) of the Companies Act 1956 for the company since no manufacturing activities were carried out by the company during the year under report.

(ix) (a) According to the information and explanation given to us and on the basis of our examination of the books of account, the company has been generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other material statutory dues applicable to it with the appropriate authorities.

(b) According to information and explanation given to us and on the basis of our examination of the books of accounts of the company, following are the details of sales tax/income tax/custom duty/wealth tax/ service Tax/excise duty/cess, which have not been deposited on account of any dispute.

Name of Statute Nature of Dues Amount Period Forum at (in lacs) which dispute is pending

Various Sales Sales Tax 149.37 Various Various Tax Acts Demand Years Forum

The Central Excise Duty on 165.22 Various Commissioner Excise Act, unauthorised Years Central 1944 removal of Excise and goods CESAT

The Central Penalty on 25.00 2012 CESAT Excise Act, Excise Duty 1944

The Central Custom Duty 0.19 Old D.C.Customs Excise Act, 1944 Mumbai

(x) At the end of the current financial year, company''s accumulated losses were more than 50% of its net worth. Further, the company had not incurred cash loss during the current financial year. However, such loss was incurred in the immediately preceding financial year.

(xi) According to the information and explanation given to us, we are informed that the company had not borrowed any money from any bank or financial institution and had not issued debentures during the year under report.

(xii) We are informed that the company had not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to it.

(xiv) On the basis of examination of books of accounts and according to information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other Investments.

(xv) According to the information and explanation given to us by the Management, the Company had not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) We are informed that the Company had not obtained any term loans during the current financial year.

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that the company had not used the short term funds for long term investment during the year under report.

(xviii) According to the information and explanation given to us, the company had not made any preferential allotment of shares to parties or companies covered in register maintained under Section 301 of the Act.

(xix) The company had not issued any debentures, consequently the provisions of clause 4(xix) of the Order are not applicable to it.

(xx) The company had not raised any money by means of public issue.

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

For SANMARKS & ASSOCIATES Chartered Accountants Firm''s Regn. No. 003343N

Sd/- Place: Faridabad S. K. BANSAL Date : 29th April, 2014 Partner Camp: Ghaziabad Membership No.: 082242


Mar 31, 2010

1. We have audited the attached Balance She et of Swadeshi Polytex Limited as at 31st March 2010, 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 of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give our comments in the annexure on the matters specified in paragraphs 4 and 5 of the said Order.

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

(i) 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;

(ii) 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;

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

(iv) 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.

(v) On the basis of written representation received from the directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31 st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) We have relied upon the management representation in respect of the following matters in view of the pending availability verification of relevant documents and records.

a) Balance confirmation in respect of certain inoperative Bank Accounts, debtors, creditors, loan and other parties (Refer note no. B- 7 of Schedule 11)

b) Status of assessment/cases relating to Income tax, Sales Tax, Excise Duty, custom duty and other matters (Refer note no B-1 of Schedule 11)

c) Sundry debtors outstanding for long being considered good and not provided for (Amount Rs. 450.49 lacs previous year Rs.450.49 Lacs, being net of provision already made of Rs. 36.93 Lacs)

d) Recognition of value of assets and liabilities in view of the discontinued operations (Refer note No B- 3 of Schedule 11)

e) Provisions of interest on secured loans taken from bodies corporate. (Refer note No B-8 of Schedule 11)

In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to our comments in para 4(vi) above, impact on Balance Sheet and Profit & Loss Account for the year ended 31s March 2010, amount unascertained, read together with the Notes to Accounts given in Schedule 11 give the information required by Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(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.

Annexure referred to in paragraph 3 of our report of even date to the members of Swadeshi Polytex Limited on the accounts for the year ended 31st March, 2010.)

(i) (a) The Company has maintained records showing full particulars including quantitative details and situation of fixed assets bur the same are pending for updation.

(b) We have been explained that the management had taken the stock of the status of various fixed assets after taking over the possession of the Plant in the preceding years and based on the assessment and technical evaluation by an independent agency has scrapped off the Plant & Machinery under the head Plant & machinery held for disposal. The reconciliation between the physical and book records in respect of the other assets is pending. Hence discrepancies, if any, between the physical and book records will be ascertained and adjusted in the books of accounts on the finalization of the aforesaid reconciliation.

(c) During the year the Company has disposed off part of the scrapped Plant & Machinery kept under the head Plant & Machinery held for disposal as stated above. Further, as informed, the company is continuously trying to explore other avenues of business activity and has also carried out some trading activity during the year. In view of the informed intention of the company to continue the business in the future, we are of the opinion that the going concern assumption will not be affected due to the disposal of the aforesaid Plant & Machinery.

(ii) (a) After taking the possession, the management has engaged an external agency to carry out the physical verification and technical evaluation of the entire inventory held for disposal. In our opinion considering the nature of Inventory such verification frequency is reasonable;

(b) In our opinion, the action taken and procedures followed by the management for physical verification of inventory were generally reasonable and adequate.

(c) The company is only carrying the scrapped inventory for disposal and the records were not maintained in respect of the said inventory. In the absence of such records, the question of adjustment of difference of book balance with physical balance does not arise.

(iii) (a) We are explained that the Company has not granted any loans secured or unsecured to any Company, firm or other party required to be listed in the register maintained under Section 301 of the Companies Act 1956.

In view of clause (iii) (a) above, the clauses (iii)(b), (iii)(c) and (iii)(d) are not applicable. (e) The company had taken secured loan from a body corporate and unsecured loans from two body corporate listed in the register maintained under Section 301 of the Companies Act 1956. The maximum amount involved and the year end balance of the said loans was Rs. 1350 lacs for Secured Loan and Rs. 522.98 Lacs for unsecured loans.

(f) In our opinion, the terms and conditions of the aforesaid loans taken by the company are prima facie not prejudicial to the interest of the company;

(g) We are explained that the above loans are repayable on demand. We are informed that no such demand was raised for repayment of aforesaid loan during the year and therefore we are unable to comment upon the regularity of payment or otherwise of the balance amount.

(iv) In our opinion, given the nature, size and scale of the activity carried out by the company during the year, there is adequate internal control system with respect to Trading activities and disposal of Scrapped Plant & Inventory. Further, on the basis of our examination and according to the information and explanations given to us, we have neither came across nor have been informed of any instance of major weakness in the aforesaid internal control procedures.

(v) (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered. (b) In our opinion and according to the information and explanations given to us company has not entered into any transactions exceeding the aggregate amount of Rs. five lacs in respect of aforesaid parties during the year except the transactions under loan and reimbursement accounts. Accordingly this clause has not been commented upon.

(vi) In view of the fact that during the year no new deposits are received by the Company from the public and the unpaid matured public deposits with interest aggregating to Rs 4.63 lacs have been deposited with the Investor Education and Protection Fund,, we are of the opinion that there are no pending deposits for which company has to comply with the provisions of section 58A and 58AA of the Companies Act, 1956 and relevant rules framed there under. Further, we have been explained that no order has been passed by the Company Law Board or the National Company Law Tribunal or any Court or any other Tribunal.

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

(viii) We are informed that the Company had not maintained the cost accounting records as required u/s 209 (1) (d) of the Companies Act 1956 since no manufacturing activities were carried out by the company during the year under report.

(ix) (a) According to the information and explanation given to us and on the basis of our examination of the books of account, the company has been generally regular in depositing the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and any other material statutory dues applicable to it with the appropriate authorities excepf TDS on Interest ofRs. 4,56,417 remaining outstanding for more than six months as at 31s1 March 2010. (b) The details of sales tax/income tax/custom duty/wealth tax/service Tax/excise duty/cess, which have not been deposited on account of dispute are given hereunder, to the extent available with the company:

Name of Nature of Amount Period Forum at Statute Dues (in lacs) which dispute is pending

Various Sales Sales Tax 133.74 Various Years Various Forum Tax Acts Demand

The Central Excise Duty on 165.22 Various Years Commissioner Excise Act, unauthorised Central Excise 1944 removal of goods

(x> At the end of the current financial year, companys accumulated losses were more than 50% of its net worth. The company had incurred cash losses during the current financial year as well as in the immediately preceding financial year.

(xi) According to the information and explanation given to us, we are explained that the company had not borrowed any money from any Bank or any Financial Institution and had not issued debentures during the year under report

(xii) We are informed that the company had not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors report) Order, 2003 (as amended) are not applicable to it.

(xiv) On the basis of examination of books of accounts and according to information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other Investments.

(xv) According to the information and explanation given to us by the Management, the Company had not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) We are informed that the Company had not obtained any term loans during the current financial year.

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that the company had not raised any funds on short-term basis.

(xviii) According to the information and explanation given to us, the company had not made any preferential allotment of shares to parties or companies covered in register maintained under Section 301 of the Act.

(xix) The company had not issued any debentures, consequently the provisions of clause 4(xix) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to it.

(xx) The company had not raised any money by means of public issue.

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

For Suresh Bansal & Co.

Chartered Accountants Firms Regn. No. 003343N

Sd/- Place : Faridabad S. K. BANSAL

Date : 9th August, 2010 Partner

Camp: Ghaziabad Membership No. 82242

 
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