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Auditor Report of Tarmat Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of TARMAT LIMITED (Formerly known as Roman Tarmat Limited) (" the Company), which comprise the Balance sheet as at 31st March 2015 and the Statement of Profit & Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. 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 the Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities, the selection and application of appropriate accounting policies : making judgments and estimates that are reasonable and prudent; and the 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 misstatements, whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. 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.

5. 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 consolidated financial statements are free from material misstatement.

6. 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 whether the company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. 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.

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

Opinion

8. 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:

In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2015; and

In the case of the statement of Profit and Loss of the Loss for the year ended on that date; and

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

9. 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, hereinafter referred to as the "Order" and on the basis of such checks of the books and records of the company as we considered appropriate and according to the information and explanation given to us, we give in the Annexure a statement on the maters specified in Paragraphs 3 and 4 of the Order, to the extent applicable.

10. As required by Section 143(3) of the Act, we report, to the extent applicable, 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 purpose of the financial statement

b) In our opinion, proper books of accounts 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 statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the relevant books of account

d) In our opinion, the Financial statement 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 the written representations received from the Directors of the Company as on March 31,2015, taken on record by the Board of Directors of the Company, none of the directors is disqualified as on March 31,2015, from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the other matters to be included in the Auditors 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 the financial position of the Company in its financial statements as of March 31,2015.

ii) The Company has made provisions in its financial statements, as required under the applicable law of the accounting standards, for material foreseeable losses on long term contracts.

iii) There has been a delay in transferring an amount of Rs 177,000/- towards Share Application money which is required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditors' Report:

Referred to in paragraph 3 of the Independent Auditors' Report of even date on the accounts of TARMAT LIMITED on the financial statements as of and for the year ended 31st March 2015.

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

(b) The fixed assets were physically verified during the year by the Management of the respective entities in accordance with a regular programme of verification which, in our opinion, provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us and based on the auditors reports issued in accordance with the Order on the aforesaid subsidiaries, no material discrepancies were noticed on such verification.

ii) (a) As explained to us, Inventories have been physically verified during the year by the management.

(b) The procedure explained to us, which are followed by the management for physical verification of inventories, are in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that, the company is maintaining proper records of its inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, have been properly dealt within the books of accounts.

iii) The Company has not granted any loans, secured and unsecured, to companies, firms or other parties covered in the Registers maintained under Section 189 of the Companies Act, 2013, and therefore paragraph 3(iii) of the Order is not applicable.

iv) In our opinion and according to the information and other explanation given to us, there are generally adequate internal control procedures commensurate with the size of the Company and the nature of its business with regards to purchases of stores, raw materials including components, plant and machinery, equipment and other assets and for sale of goods. During the course of previous year assessment, no major weakness in internal control has come to our notice.

v) Based on our scrutiny of the company's records and according to the information and explanations provided by the management, in our opinion the company has not accepted any loans or deposits which are ' deposits' within the meaning of Rule 2(b) of the Companies (Acceptance of Deposit's )Rules, 2014

vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules made by the Central Government under section 148(1) of the Companies Act 2013 for maintenance of cost records and are of the opinion that primafacie, the prescribed accounts and records have been made and maintained. We have not however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii) (a) In our opinion and according to the information and expianation given to us, barring non payment of undisputed liability of TDS 182.82 Lacs, Vat Rs 105.83 Lacs and Profession Tax no. 4.27 Lacs and delays in payment of Tax Deducted at Source, Provident Fund and Profession Tax, the company is regular in depositing undisputed statutory dues including Investor Education and Protection fund, Employees State Insurance Income Tax, Sales Tax, Wealth Tax, Cess and other material statutory dues, if any applicable to it with appropriate authorities. According to the information and explanation given to us, except payment of TDS Rs. 182.82 Lacs, Vat Rs. 105.83 Lacs and Profession tax 4.27 Lacs, there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 15.

(b) According to the information and explanation given to us, there are no dues of Income Tax, Sales Tax, Service Tax, Custom duty, Excise duty and Cess which have not been deposited on account of dispute except in the following

Name of the statute. Nature of dues. Amount involved.

Maharashtra VAT Assessment 1,43,08,082

Maharashtra VAT Assessment 1,26,16,462

Maharashtra VAT Assessment 2,65,11,442

Maharashtra VAT Assessment 3,48,55,394

Maharashtra VAT Assessment 7,92,41,439

Maharashtra VAT Assessment 3,66,99,459

Maharashtra VAT Assessment 4,45,70,870

Name of the statute. Period pending Before

Maharashtra VAT 01.04.05 DC Appeal V To 31.03.06

Maharashtra VAT 01.04.05 DC Appeal V To 31.03.06

Maharashtra VAT 01.04.08 DC Appeal V To 31.03.09

Maharashtra VAT 01.04.06 DC Appeal III To 31.03.07

Maharashtra VAT 01.04.07 DC Appeal III To 31.03.08

Maharashtra VAT 01.04.09 DC Appeal III To 31.03.10

Maharashtra VAT 01.04.10 DC Appeal III To 31.03.11

viii) The Company does not have accumulated losses at the end of the financial year. However it has incurred cash losses during the current financial year and in the immediately preceding financial year.

ix) According to the records of the Company examined by us and in the information and explanation given to us, the company has defaulted in repayment of following dues with Banks.

Sr. Name of the Bank Principal Interest Period Of No (Rs. in Lacs) Delay (in Lacs)

1. Vijaya Bank 4000.00 2110.95 UNPAID

2. Vijaya Bank (Performance Gurantee) 1941.57 1237.71 UNPAID

Vijaya Bank has classified the account as Non Performing Assets during the Current financial year and has served a SARFESAI notice on the company against which the company has preferred an appeal.

In respect of the dues to the financial institution, there were defaults during the financial year under review.

Period of Default Principal Interest Total during the year (Rs in Lacs) (Rs. in Lacs) (Rs. in Lacs)

91-180 Days 84.49 26.24 110.73

x) According to the information and explanation given to us, the company has not given guarantee for loans taken by others from bank or Financial Institution.

xi) Based on the information and explanation given to us by the management, term loans were applied for the purpose for which the loans were applied.

xii) Based upon the audit procedures and information and explanation given by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

FOR HEGDE & ASSOCIATES (Chartered Accountants) Firm Reg. No - 103610 W

sd/-

Manoj Shetty (Partner) M. No-138593

Date: 30.05.2015 Place: Mumbai




Mar 31, 2014

We have audited the accompanying financial statements of TARMAT LIMITED (Formerly known as Roman Tarmat Limited) (" the Company), which comprise the Balance sheet as at 31st March 2014 and the Statement of Profit & Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for 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'' of India (The "Act" read with the General Circular 15/2013 dated 13th September,2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act,2013)and in accordance with the 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 of 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 auditor''s judgment, including the assessment including the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor consider internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design the 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 the management, as well as evaluating the overall presentation of the financial statements.We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the 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, 2014; and

(b) In the case of the statement of Profit and Loss of the Loss for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 (‘the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order:

2. As required under provisions of 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 accounts 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 statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet and statement of Profit and 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; notified under the Act read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013

(e) On the basis of written representations 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.

Referred to in paragraph 1 of our report on Other Legal and Regulatory Requirement

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

(b) As explained to us, fixed assets, according to the practice of the company, are physically verified by the management at reasonable intervals. In a phased verification programme, which in our opinion is reasonable, looking to the size of the company and the nature of its business. According to the information and explanation given to us, discrepancies noticed on physical verification have been adjusted in the books of account.

(c) The fixed assets disposed off during the year were not substantial. According to the information and explanation given to us, we are of the opinion that the disposal of the fixed assets has not affected the going concern of the Company.

2) (a) As explained to us, Inventories have been physically verified during the year by the management.

(b) The procedure explained to us, which are followed by the management for physical verification of inventories, are in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that, the company is maintaining proper records of its inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, have been properly dealt within the books of accounts.

3) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register to be maintained under Section 301 of the Act.

(b,c,d)In view of (a) above, paragraphs 4 (iii) (b), (c) and (d) of the Order are not applicable.

(e) According to the information and explanation given to us, the Company has taken unsecured loan from a party listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was 100 Lacs and the balance at the end of the year is NIL.

(f) In our opinion, the rate of interest and other terms and conditions of unsecured taken by the Company are not, prima facie prejudicial to the interest of the Company.

(g) During the year, principal amount for loans taken and interest thereon are not due for payment.

4) In our opinion and according to the information and other explanation given to us, there are generally adequate internal control procedures commensurate with the size of the Company and the nature of its business with regards to purchases of stores, raw materials including components, plant and machinery, equipment and other assets and for sale of goods. During the course of previous year assessment, no major weakness in internal control has come to our notice.

5) (a) On the Basis of the audit procedures performed by us, and according to the information, explanations and representations given to us, we are of the opinion that, the transaction in which directors were interested as contemplated under Section 297 and sub-section (6) of Section 299 of the Companies Act 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, have been so entered.

(b) In our opinion and according to the information and explanation given to us, there are transactions of services made in pursuance of contract of arrangement entered in the register maintained u/s 301 of the Companies Act, 1956 and the same are at the market price of the best alternative available in the market for the same.

6) The Company has not accepted any deposits from the public during the year under review. Since the company has not accepted any deposits from the public, Section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public is not applicable to the company.

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

8) We have broadly reviewed the records maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records 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 however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) (a) In our opinion and according to the information and explanation given to us, barring non payment of undisputed liability of TDS 130.12 Lacs, Vat Rs 100.6 Lacs and Profession Tax Rs 2.82 Lacs and delays in payment of Tax Deducted at Source, Provident Fund and Profession tax, the company is regular in depositing undisputed statutory dues including Investor Education and Protection fund, Employees State Insurance, Income Tax, Sales tax, Wealth Tax, Cess and other material statutory dues, if any applicable to it with appropriate authorities. According to the information and explanation given to us, except payment of TDS Rs 130.12 Lacs, VAT Rs 100.6 Lacs and Profession Tax 2.82 Lacs, there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 14.

(b) According to the information and explanations given to us ,there are no dues of Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty and Cess which have not been deposited on account of dispute except in the following. Name of the statute. Nature of dues. Amount involved. Period Pending Before

Maharashtra VAT Assessment 1,43,08,082 01.04.05 DC Appeal vi To 31.03.06

Maharashtra VAT Assessment 1,26,16,462 01.04.05 DC Appeal vi To 31.03.06

Maharashtra VAT Assessment 2,65,11,442 01.04.08 DC Appeal vi To 31.03.09

10) The Company does not have accumulated losses at the end of the financial year. However it has incurred cash losses during the current financial year and in the immediately preceding financial year.

11) According to the records of the Company examined by us and in the information and explanation given to us, the company has defaulted in repayment of following dues with Banks.

Sr. No Name of the Bank Principal Interest Period of (Rs. in Lacs) (Rs. in Lacs) Delay

1. Vijaya Bank 4000.00 1248.32 UNPAID

2 Vijaya Bank 1941.57 675.91 UNPAID (Performance Gurantee)

Vijaya Bank has classified the account as Non Performing Assets during the Current financial year and has served a SARFESAI notice on the company against which the company has preferred an appeal.

In respect of the dues to the financial institution, there were defaults during the financial year under review which were made good by company by 31st March 2014.

period of Default Principal Interest Total during the year (Rs. in Lacs) (Rs. in Lacs) (Rs. in Lacs)

91-180 Days 42.20 18.98 61.18

Upto 90 Days 42.30 7.26 49.56

12) As explained to us the company has not granted loans and advances on the basis of security by way of pledge of share, debentures and other securities.

13) The Company is not a chit fund, nidhi or mutual benefit society. Hence the requirement of Item (xiii) of paragraph 4 of the order is not applicable to the company.

14) During the year the company has not undertaken any dealing in shares, securities or other investment and hence reporting under this clause does not arise.

15) According to the information and explanation given to us, the company has not given guarantee for loans taken by others from bank or Financial Institution.

16) Based on the information and explanation given to us by the management, term loans were applied for the purpose for which the loans were applied.

17) According to the information and explanation given to us and on an overall examination of the financial Statements of the Company and after placing reliance on the reasonable assumptions made by the company for classification of long term and short term usages if funds we are of the opinion that, prima facie, short term funds have not been utilized for long term purposes, no funds raised on short term basis have been used for long term investments. Similarly no funds raised on long-term basis have been used for short-term Investment.

18) According to the information and explanation given to us, the company has not made any preferential allotment of shares to parties and company covered in the register maintained under Section 301 of the Companies Act, 1956.

19) The Company has not issued any debentures. Hence the requirement of clause (xix) of paragraph 4 of the Order is not applicable to the company.

20) The Company has not issued or raised money by public issues, during the year.

21) According to the information and explanation given to us, and to the best of our Knowledge and belief, no fraud on or by the company has been noticed or reported during the year.





FOR HEGDE & ASSOCIATES (Chartered Accountants) Firm Reg. No - 103610 W

sd/- Manoj V Shetty Place: Mumbai (partner) Date: 31.05.2014 M. No- 138593


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of TARMAT LIMITED (Formerly known as Roman Tarmat Limited) (" the Company),which comprise the Balance sheet as at 31st March 2013 and the Statement of Profit & Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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''of India (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 of 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 auditor''s judgment, including the assessment including the risk of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor consider internal control relevant to the company''s preparation and fair presentation of the financial statements in order to design the 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 the 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.

Emphasis of Matter

We draw attention to

a) Note No 26 of the Notes to Accounts, wherein the company has paid a sum ofRs. 1044.15 lacs towards performance bank guarantee invoked by a client at Chennai. The management has filed a legal case against the client for fraudulently invoking the bank guarantee. However the amount paid has been written off as extraordinary item, as recovery of the same is subject to outcome of the litigation.

b) Note No 33 of the Notes on accounts, the company has written off investments made in Joint Venture amounting to Rs. 362.96 lacs as the amount is not longer recoverable.

Our Opinion is not qualified in respect of these matters

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the 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:

In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013; and

(a) In the case of the statement of Profit and Loss of the Loss for the year ended on that date; and

(b) 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 (Auditors Report) Order, 2003 (''the Order") issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order:

2. As required under provisions of 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 accounts 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 statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet and statement of Profit and 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;

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

Annexure to the Independent Auditors'' Report:

Referred to in paragraph 1 of our report on Other Legal and Regulatory Requirement

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

b) As explained to us, fixed assets, according to the practice of the company, are physically verified by the management at reasonable intervals. In a phased verification programme, which in our opinion is reasonable, looking to the size of the company and the nature of its business. According to the information and explanation given to us, discrepancies noticed on physical verification have been adjusted in the books of account.

c) The fixed assets disposed off during the year were not substantial. According to the information and explanation given to us, we are of the opinion that the disposal of the fixed assets has not affected the going concern of the Company.

2) (a) As explained to us, Inventories have been physically verified during the year by the management.

(b) The procedure explained to us, which are followed by the management for physical verification of inventories, are in our opinion, reasonable and adequate in relation to the size of the Company and the nature of its business

(c) On the basis of our examination of the inventory records of the Company, we are of the opinion that, the company is maintaining proper records of its inventory. Discrepancies, which were noticed on physical verification of inventory as compared to book records, have been properly dealt within the books of accounts.

3) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register to be maintained under Section 301 of the Act.

(b,c,d) In view of (a) above, paragraphs 4 (iii) (b), (c) and (d) of the Order are not applicable.

(e) According to the information and explanation given to us, the Company has taken unsecured loan from a party listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 100 Lacs and the balance at the end of the year is Rs. 100 Lacs.

(f) In our opinion, the rate of interest and other terms and conditions of unsecured taken by the Company are not, prima facie prejudicial to the interest of the Company.

(g) During the year, principal amount for loans taken and interest thereon are not due for payment.

4) In our opinion and according to the information and other explanation given to us, there are generally adequate internal control procedures commensurate with the size of the Company and the nature of its business with regards to purchases of stores, raw materials including components, plant and machinery, equipment and other assets and for sale of goods. During the course of previous year assessment, no major weakness in internal control has come to our notice.

5) (a) On the Basis of the audit procedures performed by us, and according to the information, explanations and representations given to us, we are of the opinion that, the transaction in which directors were interested as contemplated under Section 297 and sub-section (6) of Section 299 of the Companies Act 1956 and which were required to be entered in the register maintained under Section 301 of the said Act, have been so entered.

(b) In our opinion and according to the information and explanation given to us, there are transactions of services made in pursuance of contract of arrangement entered in the register maintained u/s 301 of the Companies Act, 1956 and the same are at the market price of the best alternative available in the market for the same.

6) The Company has not invited any deposits from the public, however it has accepted unsecured loan from a director. The company has not complied with the provisions of section 58A, 58AA of the Companies Act, 1956 or any other relevant provisions of the Act and the rules framed thereunder.

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

8) We have broadly reviewed the records maintained by the Company pursuant to the order made by the Central Government for the maintenance of cost records 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 however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) (a) In our opinion and according to the information and explanation given to us, barring non payment of undisputed liability of Service tax of Rs. 54,05,303/- and delays in payment of Tax Deducted at Source, Provident Fund and Profession tax, the company is regular in depositing undisputed statutory dues including Investor Education and Protection fund, Employees State Insurance, Income Tax , Sales tax , Wealth Tax , Cess and other material statutory dues, if any applicable to it with appropriate authorities. According to the information and explanation given to us, except payment of Service tax of Rs. 54.05 Lacs, Profession Tax Rs. 0.86 Lacs and TDS Rs. 36.56 Lacs, there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March 13.

(b) According to the information and explanation given to us, there is no disputed statutory due in respect of sales tax, income tax, custom duty, wealth tax, excise duty and cess.

10) The Company does not have accumulated losses at the end of the financial year. However it has incurred cash losses during the current financial year and in the immediately preceding financial year.

11) As explained to us the company has not granted loans and advances on the basis of security by way of pledge of share, debentures and other securities.

12) The Company is not a chit fund, nidhi or mutual benefit society. Hence the requirement of Item (xiii) of paragraph 4 of the order is not applicable to the company.

13) During the year the company has not undertaken any dealing in shares, securities or other investment and hence reporting under this clause does not arise.

14) According to the information and explanation given to us, the company has not given guarantee for loans taken by others from bank or Financial Institution.

15) Based on the information and explanation given to us by the management, term loans were applied for the purpose for which the loans were applied.

16) According to the information and explanation given to us and on an overall examination of the financial Statements of the Company and after placing reliance on the reasonable assumptions made by the company for classification of long term and short term usages if funds we are of the opinion that, prima facie, short term funds have not been utilized for long term purposes, no funds raised on short term basis have been used for long term investments. Similarly no funds raised on long-term basis have been used for short-term Investment.

17) According to the information and explanation given to us, the company has not made any preferential allotment of shares to parties and company covered in the register maintained under Section 301 of the Companies Act, 1956.

18) The Company has not issued any debentures. Hence the requirement of clause (xix) of paragraph 4 of the Order is not applicable to the company.

19) The Company has not issued or raised money by public issues, during the year.

20) According to the information and explanation given to us, and to the best of our Knowledge and belief, no fraud on or by the company has been noticed or reported during the year.

FOR HEGDE & ASSOCIATES

(Chartered Accountants)

Firm Reg. No-103610 W

sd/-

Manoj Shetty

(Partner)

M. No-138593

Place: Mumbai

Date: 27.06.2013

 
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