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Auditor Report of Tarai Foods Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of TARAI FOODS LIMITED ("the Company) which comprise the balance sheet as at 31 March 2014, the statement of profit and loss and the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information which we have signed under reference to this report.

Management's Responsibility for the Financial Statements

The company's 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 the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. 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 and other applicable authoritative pronouncements 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, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control, An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion:

1. Clause 12 on Note 22 regarding damage to the cold store building.

2. Clause 9 on Note 22 regarding interest on Term Loan and working capital default not provided for.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(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 statement of profit and loss, of the losses for the year ended on that date; and

(iii) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to -

1. Clause 10 on Note 22 of the Financial Statement with regard to continued losses and negative net worth. Considering continued losses, and negative net worth of the company, the concept of going concern may be in doubt, its ability to continue as going concern depends upon the settlement of outstanding dues of secured/ unsecured creditors and restructuring of operations by considering appropriate business strategies and financial viabilities. In spite of these uncertainties, accounts have been prepared on going concern basis and we are unable to ascertain its impact on the financial statements of the company.

Our opinion is not qualified in respect of the above matter.

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, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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 purpose of our audit;

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

c. The Balance Sheet, Statement of Profit and Loss and Cash Flow statement dealt with by this Report are in agreement with the books of account; a. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.; and

b, On the basis of written re presentations received from the directors 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. Sd/-

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in Paragraph (1) of our Report of given date of Tarai Foods Limited for the period ended 31st March, 2014)

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

b) The fixed assets have been physically verified by the Management during the year in a phased periodical manner, which in our opinion reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physics verification.

c) In our opinion, the company has not disposed of substantial part of fixed assets during the year.

2. a) As explained to us, inventories have been physically verified by the Management at regular intervals during the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed Management are 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 inventories. There were no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained u/s 30th of the Act. Consequently, paragraphs 4 iii (b), iii(c) and iii (d) of the said order are not applicable.

b) The company, has taken interest free unsecured loans from the Managing Director in earlier years and a company covered in the register maintained u/s 301 of the Act in the current year as well as in earlier years.

Sr. Name of the Party Loan taken Maximum No. during the Balance year during the year

1 Mr. G.S. Sandhu Nil Rs.112.50 Lacs

2 Tarai Farmlands Rs. 10 lacs Rs. 40 Pvt. Ltd. Lacs



Sr. Name of the Party Outstanding Terms of the No. as on 31 st Loan March 2014

1 Mr. G.S. Sandhu Rs. 112.50 Unsecured Lacs interest free and repayable on demand

2 Tarai Farmlands Rs. 40 Lacs Unsecured Pvt. Ltd. interest free and repayable on demand

c) in our opinion and according to the information and explanations given to us, the loans as detailed above are interest free and the other terms and conditions are not prima fade prejudicial to the interest of the Company.

d) In respect of loans taken by the company the loan is interest free and the principal amount Is repayable on demand.

e) In respect of loans taken by the company, these are repayable on demand which is not demanded as on the date of signing of this report and thus is not overdue.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and Services, During the course of our audit, we have not observed any Continuing failure to correct major weaknesses in internal control System.

5. a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in 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, there are no such transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5,00,000/ or more in respect of any party.

6. The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed thereunder.

7. in our opinion, the internal audit system of the company is commensurate with its size and nature of its business,

8. We have broadly reviewed the Books of Accounts maintained by the Company in respect of the products where pursuant to the rules made by the Central Government of India, the maintenance of cost records have been prescribed under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of such records with a view to determine whether they are accurate and complete.

9. In respect of statutory dues:

a) According to the records of the Company, in the year under review undisputed statutory dues including Income tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities.

Undisputed statutory dues of provident fund of current year under review and of earlier years and sales tax of earlier years have not been deposited and there have been serious delays in many cases.. Provident Fund amounting to Rs. 18.53 lacs (including of earlier years) and sales tax of earlier years amounting to Rs. 8.18 lacs has not been deposited with the Authorities after they have become due. However, provision for provident Fund and sales Tax Liability have been made in Books of Accounts in the earlier years.

According to the Information and explanations given to us, except for provident fund and Sales Tax, no undisputed amounts payable in respect of the aforesaid dues in the year under review were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable.

b) As at 31st March, 2014 according to the records of the Company, the following are the particulars of disputed dues on account of sales tax, Income Tax and excise duty matters that have not been deposited:

Name of the Nature of Amount (Rs. Period to Statute Dues In Lacs) which dues relate

Central Sales Sales Tax Rs. 0.32 2000-2001 Tax Act and Sales Tax Rs. 2.38 2006-2007 the Local Sales Tax Act

Central Excise Duty Rs. 0.59 1999- 2000 Excise Act

The Income Income Tax Rs. 129.84 Ass. Yr. Tax Act, 1961 1996-97

Name of the Forum where Statute the dispute is pending

Central Sales Appellate Tax Act and Authority the Local Upto Sales Tax Act Commissioner's Level

Central Appellate Excise Act Authority Upto Commissioner's Level

The Income Appellate Tax Act, 1961 Authority- ITAT and High COurt



10, The company has accumulated losses which has eroded the net worth fully and has incurred cash loss during the current financial year covered by our audit and has not incurred cash loss in the immediately preceding financial year.

11. In our opinion and based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has defaulted in repayment of dues to financial institution and the bank. The Company has been defaulting to the institutions for fifteen years to the tune of Rs. 465 lacs towards principal amount As per the books of accounts maintained by the Company, the default of unpaid interested the secured lenders is approx. Rs. 40 crores as on 31.03.2014.

12 In our opinion and according the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13 The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause (xiii) of paragraph 4 of the Companies (Auditor's Report) Order 2003 is not applicable to the company.

14. The company is not dealing in or trading in securities, debentures and other investments.

15. The company has not given guarantees for loans taken by others from banks or financial institutions.

16. The company has not raised any new term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the financial statements of the company, we are of the opinion that no funds raised on short term basis have been used for long term investment.

18. During the year,the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies act, 1956.

19. The company has not issued any debentures and hence question of creation of securities or charge in respect of debentures issued does not arise.

20 The company has not raised any money by way of public issue during the year.

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

For RATTAN ANIL & CO. Chartered Accountants Place : Rudrapur Firm Regn. No.: 009414N Date :30th May 2014 Sd/- Rattan Bansal Partner Membership No.: 083929


Mar 31, 2013

1. We report that we have audited the Balance Sheet of TARAI FOODS-LIMITED as at 31st March, 2013 and the relative Profit and loss Account for the period ended on that date and the Cash Flow statement for the period 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.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material mis-statement. 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.

3. In our opinion, and to the best of our information and according to the explanations given to us, the Balance Sheet and the Profit and loss Account and the Cash Flow statement together with the significant accounting policies and notes thereon and attached thereto give in the prescribed manner, the information required by the Companies Act, 1956 and also give, subject to note 3.1 to 3.2 below, respectively, a true and fair view of the state of the Company''s affairs as at 31st March,2013 in case of Balance Sheet and of the profit for the period ended on that date in case of the Profit & loss Account and of the cash flows for the period ended on that date in case of the Cash Flow Statement.

1. Clause 14 on Note 22 regarding damage to the cold store building.

2. Clause lion Note 22 regarding interest on Term Loan and working capital default not provided for.

4. Considering continued losses, and negative net worth of the company, the concept of going concern may be in doubt, Its ability to continue as going concern depends upon the settlement of outstanding dues of secured/ unsecured creditors and restructuring of operations by considering appropriate business strategies and financial viabilities. In spite of these uncertainties, accounts have been prepared on going concern basis and we are unable to ascertain its impact on the financial statements of the company. (Clause 12 on Note 22).

5. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditors Report Amendment) order, 2004 (The Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (The Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said order.

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

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

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

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

d) In our opinion the Balance Sheet and Profit and loss account and Cash Flow statement dealt with by this report comply with the Mandatory Accounting Standards referred to in sub-section 3C of section 211 of the Companies Act, 1956;

e) In our opinion, and based on the information and explanations given to us, none of the directors of the Company, is disqualified as on March 31,2013 from being appointed as a directors in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in Paragraph (1) of our Report of given date of Tarai Foods Limited for the period ended 31st March, 2013)

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets. b) The fixed assets have been physically verified by the Management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification. c) In our opinion, the company has not disposed of substantial part of fixed assets during the year.

2. a) As explained to us, inventories have been physically verified by the Management at regular intervals during the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by Management are 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 inventories. There were no material discrepancies noticed on physical verification of inventory as compared to the book records.

In our opinion and according to the information and explanations given to us, the loans as detailed above are interest free and the other terms and conditions are not prima facie prejudicial to the interest of the Company.

d) In respect of loans taken by the company the loan is interest free and the principal amount is repayable on demand.

e) In respect of loans taken by the company, these are repayable on demand which is not demanded as on the date of signing of this report and thus is not overdue.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and Services, During the course of our audit, we have not observed any Continuing failure to correct major weaknesses in internal control System.

5. a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in 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, there are no such transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5,00,000/-or more in respect of any party.

6. The company has not accepted any deposits from the public.

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

8. The Central Government has prescribed maintenance of Cost Records under Section 209 (1) (d) of the Companies Act, 1956.

9. In respect of statutory dues:

According to the records of the Company, in the year under review undisputed statutory dues including Income tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities except for provident fund of Rs. 21.75 lacs (including of earlier years) and Sales Tax of Rs. 10.56 Lacs (including of earlier years) which are due for more than six months after they have become payable. Provision of Sales Tax Liability of Rs. 10.56 lacs had not made in Books of Accounts. According to the Information and explanations given to us, except for provident fund and Sales Tax, no undisputed amounts payable in respect of the aforesaid dues in the year under review were outstanding as at 31st March, 2013 for a period of more than six months from the date of becoming payable.

10. The company has accumulated losses and has not incurred cash Loss during the current financial year covered by our audit and has incurred cash loss in the immediately preceding financial year.

11. In our opinion and based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has defaulted in repayment of dues to financial institutions and the bank. The Company has been defaulting to the institutions for fifteen years to the tune of Rs. 465 lacs towards principal amount As per the books of accounts maintained by the Company, the default of unpaid interest to the secured lenders is approx. Rs. 40 crores as on 31.03.2013.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13 The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

14. The company is not dealing in or trading in securities, debentures and other investments.

15. The company has not given guarantees for loans taken by others from banks or financial institutions.

16. The company has not raised any newterm loansduringtheyear.

17. According to the information and explanations given to us and on an overall examination of the financial statements of the company, we are of the opinion that no funds raised on short term basis have been used for long term investment.

18. During the year, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies act, 1956.

19. The company has not issued any debentures and hence question of creation of securities or charge in respect of debentures issued does not arise.

20 The company has not raised any money by way of public issue during the year.

21. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year, that causes the financial statements to be materially misstated.

For RATTAN ANIL & CO.

Chartered Accountants

Place: Rudrapur

Date : 30th May 2013 Sd/-

Rattan Ban sal

Partner

Membership No.: 083929

Firm Regn. No.: 009414IN


Mar 31, 2010

1. We report that we have audited the Balance Sheet of TARAI FOODS-LIMITED as at 31st March, 2010 and the relative Profit and Loss Account for the period ended on that date and the Cash Flow statement for the period 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.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material mis-statement. 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.

3. In our opinion, and to the best of our information and according to the explanations given to us, the Balance Sheet and the Profit and Loss Account and the Cash Flow statement together with the significant accounting policies and notes thereon and attached thereto give in the prescribed manner, the information required by the Companies Act, 1956 and also give, subject to note 3.1 to 3.3 below, respectively, a true and fair view of the state of the Companys affairs as at 31st March,2010 in case of Balance Sheet and of the Loss for the period ended on that date in case of the Profit & Loss Account and of the cash flows lor the period ended on that date in case of the Cash Plow Statement.

1. Note 5 on Schedule 20 regarding details of amount refundable towards share application money.

2. Note 13 on Schedule 20 regarding damage to the cold store building.

3. Note 10 on Schedule 20 regarding interest not provided for.

4. Considering continued losses, and negative net worth of the company, the concept of going concern may be in doubt, Its ability to continue as going concern depends upon the settlement of outstanding dues of secured/ unsecured creditors and restructuring of operations by considering appropriate business strategies and financial viabilities. Inspita of these uncertainties, accounts have been prepared on going concern basis and we are unable to ascrertain its impact on the financial statments of the company. (Note 11 on sechedule 20).

5. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report Amendment) order, 2004 (The Order) issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (The Act) and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we enclose in the Annexure a statement on the matters specified in Paragraphs 4 and 5 of the said order.

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

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

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

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

d) In our opinion the Balance Sheet and Profit and Loss account and Cash Flow statement dealt with by this report comply with the Mandatory Accounting Standards referred to in sub-session 3C of session 211 of the Copanies Act, 1956;

e) In our opinion, and based on the information and explanations given to us, none of the directors of the Company is disqualified as on March 31, 2010 from being appointed as a directors in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1S56.

ANNEXURE TO THE AUDITORS REPORT

(Referred to in Paragraph (1) of our Report of given date of Tarai Foods Limited for the period ended 31st March, 2010)

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

b) The fixed assets have been physically verified by the Management during the year in a phased periodical manner. which in our opinion is reasonable, having regard to the size of the company and nature of its assets. No material discrepancies were noticed on such physical verification.

c) In our opinion, the company has not disposed of substantial part of fixed assets during the year.

2. a) As explained to us, inventories have been physically verified by the Management at regular intervals during the year.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by Management are 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 inventories. There were no material discrepancies noticed on phy;cal verification of inventory as compared to the book records.

3. a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained u/s 301 of the Act. Consequently, paragraphs iii (b), iii(c) and iii (d) of Ihe said order are not applicable.

b) The company, has taken interest free unsecured loans from the Mananging Director and a company covered in the register maintained u/s 301 of the Act.

Sr. No. Name of the Party Loan taken Maximum Balance Outstanding as on Terms of the Loan during the year during the year 31st March. 2010

1. Mr. G. S. Sandhu Rs. 5 Lacs Rs. 25.50 Lacs Rs. 25.50 Lacs Unsecured, interest free and repayable on demand

2. Tarai Farmlands Rs. 30 Lacs Rs. 30 Lacs Rs. 30 Lacs - do - Pvt. Ltd.

c) In our opinion and according to the information and explanations given to us, the loans as detailed above are interest free and the other terms and conditions are not prima facie prejudicial to the interest of the Company.

d) In respect of loans taken by the company the loan is interest free and the principal amount is repayable on demand.

e) In respect of loans taken by the company, these are reapaybte on demand which is not demanded as on the date of signing of this report and thus is not overdue.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of Its business for the purchase of inventory, fixed assets and also for the sale of goods and Services. During the course of our audit, we have not observed any Continuing failure to correct major weaknesses in internal control System.

5. a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered into in 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, there are no such transactions In pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5.00,0007- or more in respect of any party.

6. The company has not accepted any deposits from the public.

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

8. The Central Government has not prescribed mainlenance of Cost Records under Section 209 (1) (d) of the Companies Act. 1956.

9. In respect of statutory dues :

a) According to the records of the Company, in the year under review undisputed statutory dues including Income tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty. Cess and other statutory dues have been generally regularly deposited with the appropriate authorities except for provident fund of Rs. 12.88 lacs, and Sales Tax of Rs. 3.25 Lacs, which are due for more than six months after they have become payable. According to the Information and explanations given to us, except for provident fund and Sales Tax , no undisputed amounts payable in respect of the aforesaid dues in the year under review were outstanding as at 31 st March, 2010 for a period of more than six months from the date of becoming payable. /

b) As at 31st March. 2010 according to the records of the Company, the following are the particulars of disputed dues on account of sales tax, income Tax and excise duty matters that have not been deposited :

Name of the statute Amount Rs. in lacs Forum where dispute Is pending

Sales tax 0.32 Appellate Authority-Upto

Commissioners level

Excise Duty 0.59 AppellateAuthority Upto

Commissioners level

Income Tax 129-84 AppellateAuthority- Appellate

Tribunal

10. The company has accumulated losses and has not incurred cash Loss during the current fianancial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and based on our audit procedures and according to the information and explanation given to us, we are of the opinion that the Company has defaulted in repayment of dues to financial institutions and the bank. The Company has been defaulting to the Institutions for a period of more than fen years to the tune of Rs. 465 lacs towards principal amount and in respect of working capital loans from bank, to the tune of Rs. 190 lacs as principal amount for last Nine years. As per the books of accounts maintained by the Company, The default of unpaid interest to the secured lenders is approx, Rs. 4498 as on 31.03.2010. Subject to reconciliation of accounts.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the Company on the basis of security by way of pledge of snares, debentures and other securities.

13. The company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, clause (xiii) of paragraph 4 of the Companies (Auditors Report) Order 2003 is not applicable to the company.

14. The company is not dealing in or trading in securities, debentures and other investments.

15. The company has not given guarantees for loans taken by others from banks or financial institutions.

16. The company has not raised any new term loans during the year.

17. According to the information and explanations given to us and on an overall examination of the financial statements of the company, we are of the opinion that no funds raised on short term basis have been used for long term investment.

18. During the year, the company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under section 301 of the Companies act, 1956,

19- The company has not issued any debentures and hence question of creation of securities or charge in respect of debentures issued does not arise.

20. The company has not raised any money by way of public issue during the year.

21. In our opinion and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year, that causes he financial statements to be materially misstated



For JOLLY & OBEROI

Chartered Accountant

Place : Rudrapur Sd/

Date :28th May, 2010 K.S. Oberoi

Partner

Membership No.: 85893

Firm No.: 001723N



 
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