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Auditor Report of Technocraft Industries (India) Ltd.

Mar 31, 2015

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

Management's Responsibility for the Standalone 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 Standalone 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 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 statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these Standalone 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 thereunder.

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 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 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 reasonableness of the accounting estimates made by the Company's Directors, 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 on the Standalone financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone 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

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 Companies Act, 2013, we give in the Annexure a statement on the matters 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 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 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.

(d) In our opinion, the aforesaid Standalone 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 the Written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, 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.

(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 no. 2 (A) of note no. 28 of the notes to the Financial Statements in respect of contingent liability.

ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred, to the investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS REPORT

The Annexure referred to in our Report of even date to the Members of TECHNOCRAFT INDUSTRIES (INDIA) LIMITED for the year ended March 31, 2015. We report that:

1 a The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

1 b As explained to us, the fixed assets of the company have been physically verified by the Management in a phased manner as per regular program of verification, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. Pursuant to this program, some of the fixed assets have been physically verified by the management during the year, and no material discrepancies have been noticed on such verification.

2 a The stock of Finished Goods, Goods-in-Process, Raw Materials and Stores & Spares parts have been physically verified during the year by the Management. In our opinion the frequency of verification is reasonable. In respect of inventories lying with the third parties, these have substantially been confirmed by them.

2 b In our opinion, the procedure of physical verification of the above Inventories followed by the Management are reasonable and adequate in relation to the size of the Company and nature of its business.

2 c On the basis of our examination of the Inventory records, in our opinion, the Company is maintaining proper records of the inventories. The discrepancies noticed between the physical stock and book stocks were not material and the same have been properly dealt with in the Books of Account.

3 a In our opinion and according to the information and explanations given to us, the company has granted unsecured loans to covered in the Register maintained under Section 189 of the Companies Act, 2013. The year ended balance of Loan granted to such parties was Rs. 757.01 Lakhs.

3 b Payment of Principal amount and interest are regular wherever stipulated.

3 c there is no overdue amount of loans granted to Companies, Firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013.

4. In our opinion, and according to the information and explanations given to us, there is an adequate Internal Control system commensurate with the size of the Company and the nature of its business, for the purchase of Inventory and Fixed Assets and for the sale of goods and services. Further on the basis of our examination of the Books and records of the Company and according to the information and explanation given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid Internal control System.

5. The Company has not accepted any deposits from the public to which the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 and any other relevant provision of the Companies Act, 2013 and the rules framed there under apply.

6. We have broadly reviewed the books of account and records 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 has been specified under section 148 (1) of the Companies Act, 2013 is applicable to the company and are of opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made detailed examination of the records with view to determining whether they are accurate or complete.

7 a According to the information and explanation given to us and the records of the Company examined by us, the Company is generally regular in depositing provident fund dues, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues with the appropriate authorities and there are no undisputed amounts payable for the same were outstanding as at 31st March, 2015 for a period exceeding six months from the date they became payable;

7 b According to the information and explanation given to us and the records of the Company examined by us, the Particulars of disputed statutory dues under various Act, as at 31st March, 2015 which have not been deposited with the appropriate authorities are as under:-

Name of the Statute Nature of dues Amount Forum where dispute is pending (in Lakhs)

The Central Excise Act 1944 Excise Duty & Penalty

For F.Y 2005-06 38.73 Case pending with CESTAT (Mumbai)

For period Aug 06 - Feb 07. 3.67 Case pending with CESTAT (Tribunal)

For F.Y 1999-02 to Sept 2008 1115.67 Case pending with CESTAT (Mumbai)

For Period before 29-9-2008 195.61 Cases pending with CESTAT (Mumbai)

For Period before 29-1-2009 266.77 Cases pending with CESTAT (Mumbai)

For FY 2007-08 15.65 Case pending With High Court,

Mumbai

For period Oct 11 - Jan 12. 9.94 Case pending with CESTAT (Tribunal)

For period Oct 09 - Dec 10 6.08 Case pending with Additional

Commissioner

For period Jan to Sept 12 1.04 Case pending with Asst.

Commissioner (Central Excise)

Service Tax & Penalty

For period Apr 05 - Jun 09. 59.48 Case pending with CESTAT (Mumbai)

For F.Y. 2006-07 & F.Y. 2008- 10.94 Case pending with Additional

09 Commissioner (ST)

For F.Y. 2006-07 & 2007-08 3.03 Case pending with Commissioner

Appeal (ST)

For period Apr 09 - Mar 13 43.31 Case pending with Additional

Commissioner (ST)

For F.Y. 2013-14 24.55 Case pending with Additional

Commissioner (ST)

For period Oct 08 - Oct 12 68.09 Case pending with Commissioner

(Central Excise)

For period Oct 09 - Mar 13 38.06 Case pending with Commissioner

(Central Excise)

For period Apr 13 - Dec 13 7.12 Case pending with Commissioner

(Central Excise)

For Period Jan 2014 to June 4.61 Case pending with Commissioner

2014 (Central Excise)

The Maharashtra Land For Payment of Royalty on 82.48 Tahasildar, Tal. Murbad, Dist. Thane

Revenue Act, 1966 extraction & transportation

of mud, stones & sand issued

by Tahasildar, Tal. Murbad,

Dist. Thane

The MRTU & PULP Act, For payment of Variable 35.65 The Industrial Court, Maharashtra at

1971 Dearness Allowances Thane.

7 c According to the information and explanation given to us and the records of the Company examined by us, The amount, which were required to be transferred, to the investor Education and Protection Fund by the Company has been transferred on time as per the provision of section 125 of the companies Act, 2013 and rules made thereunder.

8. The Company has not incurred any cash losses during the current Financial Year as well as in the immediately preceding Financial Year and its accumulated losses are Nil at the end of the Current Financial Year.

9. According to information & explanations given to us and the books and records examined by us, the Company has not defaulted in repayment of dues to Banks as at the Balance sheet date. The company does not have any outstanding debentures.

10. In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantee for cash credit & loan taken by its Subsidiaries (including step down Subsidiaries) from banks are not prima facial prejudicial to the interest of the company.

11. In our opinion and according to the information and explanations given to us, the term loans taken by the company have been applied for the purpose for which the term loans were obtained.

12. According to the information and explanations given to us by the management which has been relied upon by us, there were no frauds on or by the company were noticed or reported during the year.

For M. L. SHARMA & CO.

FIRM REG. NO. 109963W CHARTERED ACCOUNTANTS

Place: Mumbai (C. H. BANDI) PARTNER

Date : May 27, 2015 Membership No.5385


Mar 31, 2014

1. We have audited the accompanying financial statements of TECHNCRAFT INDUSTRIES (INDIA) LIMITED, which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. Management is responsible for the preparation of these financial statements that give 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 13th 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

3. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

4. 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.

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

Opinion

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

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

b) In the case of the Statement of Profit & Loss of the PROFIT for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor''s Report) Order, 2003; as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 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 explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

8. 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;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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

Annexure referred to in Paragraph 7 of the Auditors'' Report of even date to the Members of TECHNOCRAFT INDUSTRIES (INDIA) LIMITED on the Financial Statements as of and for the year ended 31st March, 2014.

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

1 b As explained to us, the fixed assets of the company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

1 c In our opinion, and according to the information and explanation given to us, no substantial parts of Fixed Assets have been disposed of during the year.

2 a The stock of Finished Goods, Goods-in-Process, Raw Materials and Stores & Spares parts have been physically verified during the year by the Management. In our opinion the frequency of verification is reasonable. In respect of inventories lying with the third parties, these have substantially been confirmed by them.

2 b In our opinion, the procedure of physical verification of the above Inventories followed by the Management are reasonable and adequate in relation to the size of the Company and nature of its business.

2 c On the basis of our examination of the Inventory records, in our opinion, the Company is maintaining proper records of the inventories. The discrepancies noticed between the physical stock and book stocks were not significant and the same have been properly dealt with in the Books of Account.

3 a In our opinion and according to the information and explanations given to us, the company has granted unsecured loans to 4 parties covered in the Register maintained under section 301 of the Companies Act, 1956. The maximum amount of Loan granted during the year was 3,736.46 Lakhs and the year ended balance of Loan granted to such parties was ` 3,125.41 Lakhs.

b In our opinion, the rate of interest and other terms and conditions on which Loans have been granted to parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

c Payment of Principal amount and interest are regular wherever stipulated.

d There is no overdue amount of loans granted to Companies, Firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

e The Company has not taken any loan, Secured or Unsecured from Companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956 and accordingly, provisions of clause 4 (iii) (f) & 4 (iii) (g) of the said order are not applicable to the Company.

4 In our opinion, and according to the information and explanations given to us, there is an adequate Internal Control system commensurate with the size of the Company and the nature of its business in respect of purchase of goods and fixed assets and sale of goods. Further, on the basis of our examination of the Books and records of the Company, and according to the information and explanation given to us, we have neither come across, nor have been informed of, any continuing failure to correct major weaknesses in the aforesaid Internal control System.

5 a In our opinion, and according to the information and explanations given to us, we are of the opinion that the particulars of contract or arrangements referred to in u/s 301 of the Companies Act, 1956, have been properly entered in the register required to be maintained under that section.

5 b In our opinion, and according to the information and explanations given to us, the transaction made in pursuance of such contract or arrangements have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services or the prices at which transactions for similar goods, materials or services have been made with other parties.

6 In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits from the public to which the provisions of section 58A of the Companies Act, 1956 and the rules framed there under apply.

7 In our opinion, the Company has an Internal Audit System commensurate with the size and nature of its Business.

8 We have broadly reviewed the books of account and records maintained by the company in respect of the products where, pursuant to the Rules made by the Central Government of India for the maintenance of cost records under section 209 (1) (d) of the Companies Act 1956 and are of opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made detailed Examination of the records with view to determining whether they are accurate or complete.

9 a According to the information and explanation given to us and the records of the Company examined by us, the Company have generally been regular in depositing provident fund dues, state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues with the appropriate authorities and there are no undisputed amounts payable for the same were outstanding as at 31st March, 2014, for a year exceeding six months from the date they became payable.

b According to the information and explanation given to us and the records of the Company examined by us, the Particulars of disputed statutory dues under various act as at 31st March, 2014 which have not been deposited with the appropriate authorities are as under:-

Name of the Nature of dues Amount Statute (in lacs)

Income Tax Act, Income Tax, 1961 Penalty & Interest For A.Y. 2003-2004 79.23 For A.Y. 2008-2009 2.91 (Penalty)

The Central Excise Excise Duty & 1,115.66 Act 1944 Penalty For F.Y 1999-2002 to Sep 2008.

For Period before 195.60 29-9-2008

For period before 266.77 29-1-2009

For Period before 3.04 29-01-2009

Service Tax & Penalty For F.Y 2006-07 & 2007-08 3.03

The Maharashtra For Payment of 82.48 Land Revenue Act, Royalty on extraction 1966 & transportation of mud, stones & sand issued by Tahasildar, Tal. Murbad, Dist. Thane

Name of the Statute Forum where dispute is pending

Income Tax Act, 1961

Appeal filed with CIT (A)

Appeal filed with CIT (A)

The Central Excise CESTAT, West Zonal Branch, Mumbai (Stay Granted Act 1944 by CESTAT from Pre – Deposit of the dues adjudged during the pendency of these appeals)

CESTAT, West Zonal Branch, Mumbai (Stay Granted by CESTAT from Pre – Deposit of the dues adjudged during the pendency of these appeals)

CESTAT, West Zonal Branch, Mumbai (Stay Granted by CESTAT from Pre – Deposit of the dues adjudged during the pendency of these appeals)

CESTAT, West Zonal Branch, Mumbai (Stay Granted by Commissioner (Appeals) from the Pre-Deposit of the dues adjudged during the pendency of these Appeals)

CESTAT, West Zonal Branch, Mumbai

The Maharashtra Land Tahasildar, Murbad, Dist. Thane Revenue Act, 1966

10. The company has no accumulated losses and has not incurred any cash losses during the financial Year covered by our audit or in the immediately preceding financial year.

11 According to information & explanations given to us and the books and records examined by us, the Company has not defaulted in repayment of dues to Banks as at the Balance sheet date.

12 The Company has not granted any Loans and Advances to any party on the basis of Security by way of pledge of shares, debentures and other securities and accordingly the provisions of clause 4 (xii) of the order are not applicable to the company.

13 The company is not a chit fund or a Nidhi/Mutual benefit fund/society and accordingly the provisions of clause 4 (xiii) of the order are not applicable to the Company.

14 a In respect of investment dealt or traded by the company, proper records are maintained in respect of transaction and contracts and timely entries have been made therein.

b According to the information and explanations given to us, the shares and units of mutual fund have been held by the company in its own name.

15 In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantee for cash credit & Loan taken by its Subsidiaries (including step down Subsidiaries) from banks are not prima facial prejudicial to the interest of the company.

16 In our opinion and according to the information and explanations given to us, the term loans taken by the company have been applied for the purpose for which the term loans were obtained.

17 According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that the funds raised on short term basis have prima facie not been used for Long-term.

18 The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of companies act, 1956 during the year and accordingly the provisions of clause 4 (xviii) of the order are not applicable to the Company.

19 The company has not issued any debentures during the year and does not have any debentures outstanding as at the beginning of the year and at the year end and accordingly the provisions of clause 4 (xix) of the order are not applicable to the Company.

20 The company has not raised any money by way of public issue during the year and accordingly the provisions of clause 4 (xx) of the order are not applicable to the Company.

21 The Company has filed an FIR & WRIT Petitions through the NSEL Investors Forum of which the Company is a member for recovery of outstanding of ` 1,937.04 Lakhs (Net of recoveries) alleging fraud on the company by the promoters of the National Spot Exchange Limited (NSEL). The Company has made a provision against the above outstanding and considered it as Bad-debts. Except for this, no other fraud on or by the company were noticed or reported during the course of our audit for the year that causes the financial statements to be materially.

For M. L. SHARMA & CO. FIRM REG. NO. 109963W CHARTERED ACCOUNTANTS

(C. H. BANDI) PARTNER Membership No.5385 Place of Signature: Mumbai Dated: 21st May, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of TECHNCRAFT INDUSTRIES (INDIA) LIMITED, which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

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

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

b) In the case of the Statement of Profit & Loss of the PROFIT for the year ended on that date; and

c) In the case of 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 sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

Annexure referred to in Paragraph of our Auditors'' Report on even date on the Financial Statements for the year ended 31st March, 2013 of TECHNOCRAFT INDUSTRIES (INDIA) LIMITED) on the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that:-

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

b As explained to us, the said fixed assets have been physically verified by the Management during the year which is reasonable and no material discrepancies have been noticed on such verification.

c In our opinion, and according to the information and explanation given to us, no substantial parts of Fixed Assets have been disposed of during the year.

2 a The stock of Finished Goods, Goods-in-Process, Raw Materials and Stores & Spares parts have been physically verified during the year by the Management and is reasonable in view of the nature of products of the Company.

b As explained to us, the procedure of physical verification of the above stocks followed by the Management is, in our opinion reasonable and adequate in relation to the size of the Company and nature of its business.

c The Company has maintained proper records of the inventories and the discrepancies noticed between the physical stock and book stock were not significant and the same have been properly dealt with in the Books of Account.

3 a In our opinion and according to the information and explanations given to us, the company has granted unsecured loans to 4 parties covered in the Register maintained under section 301 of the Companies Act, 1956. The maximum amount of Loan granted during the year was Rs 10676.23 Lakhs and the year ended balance of Loan granted to such parties was Rs 1226.92 lakhs.

b In our opinion, the rate of interest and other terms and conditions on which Loans have been granted to parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facies, prejudicial to the interest of the company.

c Payment of Principal amount and interest are regular wherever stipulated.

d There is no overdue amount of loans granted to Companies, Firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

e The Company has not taken any loan, Secured or Unsecured from Companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956 and accordingly, provisions of Paragraph 4 (iii) (e) to 4 (iii) (g) are not applicable to the Company.

4 On the basis of such checks carried out during the course of Audit and according to the information and explanations given to us, we are of the opinion that there is an adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of stores, raw materials including components, plant & machinery, equipments and other assets and for sale of goods and services.

5 a In our opinion, and according to the information and explanations given to us, the particulars of contract or arrangements referred to in u/s 301 of the Companies Act, 1956, have been properly entered in the register required to be maintained under that section.

b In our opinion, and according to the information and explanations given to us, the transaction made in pursuance of such contract or arrangements have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services or the prices at which transactions for similar goods, materials or services have been made with other parties.

6 In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits from the public to which the provisions of section 58A of the Companies Act, 1956 and the rules framed there under apply.

7 In our opinion, the Company has an Internal Audit System commensurate with the size and nature of its Business.

8 We have broadly reviewed the books of account and records maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act 1956 and are of opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made detailed Examination of the records with view to determining whether they are accurate or complete.

9 a According to the information and explanation given to us and the records of the Company examined by us, the Company have generally been regular in depositing provident fund dues, state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues with the appropriate authorities and there are no undisputed amounts payable for the same were outstanding as at 31st March, 2013, for a year exceeding six months from the date they became payable.

b According to the information and explanation given to us and the records of the Company examined by us, the Particulars of disputed statutory dues under various act which have not been deposited with the appropriate authorities are as under:-



Name of the Nature of dues Amount Forum where Statute (in lacs) dispute is pending

Income Tax Act, Income Tax, 1961 Penalty & Interest

For A.Y. 2002-2003 585.24 Appeal filed with CIT (A)

For A.Y. 2007-2008 40.82 Appeal filed with CIT (A) u/s 271(1) (Penalty) (c)

For A.Y 2007-2008 40.13 Appeal filed with ITAT

For A.Y. 2008-2009 15.50 Appeal filed with CIT (A)

For A.Y. 2005-2006 14.72 Appeal filed with CIT (A)

For A.Y. 2009-2010 65.06 Appeal filed with CIT (A)

The Central Excise Excise Duty & Act 1944 pENALTY

For F.Y 1999-2002 to 1115.66 CESTAT,West Zonal Branch, Mumbai Sep 2008. (Stay Granted by CESTAT from Pre - Deposit of the dues adjudged during the pendency of these appeals)

For Period before 195.60 CESTAT,West Zonal Branch, Mumbai 29-9-2008 (Stay Granted by CESTAT from Pre - Deposit of the dues adjudged during the pendency of these appeals)

For period before 266.77 CESTAT,West Zonal Branch, Mumbai 29-1-2009 (Stay Granted by CESTAT from Pre - Deposit of the dues adjudged during the pendency of these appeals)

For period before 3.04 CESTAT,West Zonal Branch, Mumbai 29-1-2009 (Stay Granted by Commissioner (Appeals) from the pre-Deposit of the dues adjudged during the pendency of these Appeals)

Service Tax & Penalty

For F.Y 2006-07 & 3.03 CESTAT,West Zonal Branch, Mumbai 2007-08



10. The company has no accumulated losses and has not incurred any cash losses during the financial Year covered by our audit or in the immediately preceding financial year.

11 According to information & explanations given to us and the books and records examined by us, the Company has not defaulted in repayment of dues to Banks.

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

13 The Provision of any special statute applicable to Chit fund/Nidhi/Mutual benefit fund/Societies is not applicable to the Company.

14 a In respect of investment dealt or traded by the company, proper records are maintained in respect of transaction and contracts and timely entries have been made therein.

b According to the information and explanations given to us, the shares and units of mutual fund have been held by the company in its own name.

15 In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantee for cash credit taken by others from banks are not prima facial prejudicial to the interest of the company.

16 In our opinion and according to the information and explanations given to us, the term loans taken by the company have been applied for the purpose for which the term loans were obtained.

17 According to information & explanations given to us, the company has used its funds properly according to the nature and purposes of the funds.

18 The company has not made any preferential allotment of shares to parties and Companies covered in the register maintained u/s. 301 of the Companies Act, 1956.

19 The Company has not issued any Debentures during the year and does not have any debenture outstanding as at the year end.

20 According to information and explanations given to us, the company has not raised any money by way of Public issue during the year.

21 According to information and explanation given to us, no fraud on or by the Company has been noticed or reported during the period.



For M.L.SHARMA & CO.

Chartered Accountants

Firm Reg. No. 109963W



(C.H. Bandi)

Partner

Place: Mumbai Membership No.5385

Dated: 22 May, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of TECHNCRAFT INDUSTRIES (INDIA) LIMITED as at 31st March, 2012 and also the Statement of Profit & Loss and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We 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. Further we report that:

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto, a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

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

2. In our opinion, proper books of account as required by the Companies Act, 1956(as amended) have been kept by the Company so far as appears from our examination of those Books.

3. The Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement dealt with by the report are in agreement with the Books of Account of the Company.

4. In our opinion, the Balance Sheet, the Statement of Profit & Loss and Cash Flow Statement complies with the Mandatory Accounting standards referred in section 211(3c) of the Companies Act, 1956 except as otherwise stated in this report.

5. On the basis of the written representation received from the Directors, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director, in terms of clause (g) of Sub-Section (1) of section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information, and according to the explanations given to us, the said accounts Subject to Note no.27(2)(B) Regarding finished goods, and Note no.27(2)(E) Regarding Leave encashment Benefits, read together with Significant Accounting Policies and other notes thereon, 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, 2012;

b) In the case of the Statement of Profit & Loss of the PROFIT for the year ended on that date; and

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

Annexure referred to in Paragraph of our Auditors' Report on even date on the Financial Statements for the year ended 31s' March, 2012 of TECHNOCRAFT INDUSTRIES (INDIA) LIMITED) on the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that:-

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

1 b As explained to us, the said fixed assets have been physically verified by the Management during the year which is reasonable and no material discrepancies have been noticed on such verification.

2 a The stock of Finished Goods, Goods-in-Process, Raw Materials and Stores & Spares parts have been physically verified during the year by the Management and is reasonable in view of the nature of products of the Company.

2 b As explained to us, the procedure of physical verification of the above stocks followed by the Management is, in our opinion reasonable and adequate in relation to the size of the Company and nature of its business.

2 c The Company has maintained proper records of the inventories and the discrepancies noticed between the physical stock and book stock were not significant and the same have been properly dealt with in the Books of Account.

3 a In our opinion and according to the information and explanations given to us, the company has granted unsecured loans to 4 parties covered in the Register maintained under section 301 of the Companies Act, 1956. The maximum amount of Loan granted during the year was Rs. 8601.41 Lakhs and the year ended balance of Loan granted to such parties was Rs. 8480.12 lakhs.

b In our opinion, the rate of interest and other terms and conditions on which Loans have been granted to parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facies, prejudicial to the interest of the company.

c Payment of Principal amount and interest are regular wherever stipulated.

d There is no overdue amount of loans granted to Companies, Firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

e The Company has not taken any loan, Secured or Unsecured from Companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956 and as such provision of sub clause 3(f) & 3 (g) are not applicable.

4 On the basis of such checks carried out during the course of Audit and according to the information and explanations given to us, we are of the opinion that there is an adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of stores, raw materials including components, plant & machinery, equipments and other assets and for sale of goods and services.

5 a According to the information and explanation given to us, particulars of contracts or arrangement referred to in Under section 301 of the Companies Act, 1956 have been properly entered in the register required to be maintained under that section;

b The transaction made in pursuance of such contract or arrangements have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services or the prices at which transaction for similar goods, materials or services have been made with other parties.

6 The company has not accepted any deposits from the public to which the provisions of section 58A, 58AA and any other relevant provisions of the Companies Act, 1956 and the rules framed there under apply.

7 In our opinion, the Company has an Internal Audit System commensurate with the size and nature of its Business.

8 We have broadly reviewed the books of account and records maintained by the company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act 1956 and are of opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made detailed Examination of the records with view to determining whether they are accurate or complete.

9 a As per the records of the company & as explained to us, the Company have generally been regular in depositing provident fund dues, state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues with the appropriate authorities and there are no undisputed amounts payable for the same were outstanding as at 31st March, 2012, for a year exceeding six months from the date they became payable.

b On the basis of our Examination of the documents and records. the amounts of disputed statutory dues which have not been deposited with the appropriate authorities are as under:-

Name of the Nature of dues Amount Forum where Statute (in lacs) dispute is pending Income Tax Act, Income Tax & 1961 Interest

For A.Y. 2002-2003 75.44 Effect of ITAT & High Court order to be given by the Assessing officer

For A.Y. 2007-2008 63.80 ITAT

For A.Y. 2008-2009 15.50 CIT (Appeals)

The Central Excise Duty & Excise Act 1944 Penalty

For F.Y 1999-2002 1115.66 CESTAT, West Zonal to Sep 2008. Branch, Mumbai. (Stay Granted by CESTAT from Pre-Deposit of the dues adjudged during the pendency of these appeals)

For Period before 195.60 CESTAT, West Zonal 29-9-2008 Branch, Mumbai (Stay Granted by CESTAT from Pre-Deposit of the dues adjudged during the pendency of these appeals)

For period before 266.77 CESTAT, West Zonal 29-1-2009 Branch, Mumbai (Stay Granted by CESTAT from Pre-Deposit of the dues adjudged during the pendency of these appeals)

For Period before 3.04 CESTAT, West Zonal 29-01-2009 Branch, Mumbai (Stay Granted by Commissioner (Appeals) from the pre-Deposit of the dues adjudged during the pendency of these Appeals)

Service Tax & Penalty

For F.Y 2006-07 3.03 CESTAT, West Zonal & 2007-08 Branch, Mumbai

10. The company has no accumulated losses and has not incurred any cash losses during the financial Year covered by our audit or in the immediately preceding financial year.

11 According to information & explanations given to us and the books and records examined by us, the Company has not defaulted in repayment of dues to Banks.

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

13 a In respect of investment dealt or traded by the company, proper records are maintained in respect of transaction and contracts and timely entries have been made therein.

b According to the information and explanations given to us, the shares and units of mutual fund have been held by the company in its own name.

14 In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantee for cash credit taken by others from banks are not prima facial prejudicial to the interest of the company.

15 In our opinion and according to the information and explanations given to us, the term loans taken by the company have been applied for the purpose for which the term loans were obtained.

16 According to information & explanations given to us, the company has used its funds properly according to the nature and purposes of the funds.

17 The company has not made any preferential allotment of shares to parties and Companies covered in the register maintained u/s. 301 of the Companies Act, 1956.

18 The Company has not issued any Debentures during the year.

19 According to information and explanations given to us, the company has not raised any money by public issue during the year.

20 According to information and explanation given to us, no fraud on or by the Company has been noticed or reported during the period.

21 Other provisions of the said order are either Nil or Not Applicable to the Company.

For M.L.SHARMA & CO.

Chartered Accountants

F.R.No.109963W

(C.H. Bandi)

Place: Mumbai Partner

Dated: 28th May, 2012 Membership No.5385


Mar 31, 2011

We have audited the attached Balance Sheet of TECHNCORAFT INDUSTRIES (INDIA) LIMITED as at 31st March, 2011 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

We 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. Further we report that:

As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto, a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

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

2. In our opinion, proper books of account as required by the Companies Act, 1956(as amended) have been kept by the Company so far as appears from our examination of those Books.

3. The Balance Sheet, the Profit & Loss Account and Cash Flow Statement dealt with by the report are in agreement with the Books of Account of the Company.

4. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement complies with the Mandatory Accounting standards referred in section 211(3c) of the Companies Act, 1956 except as otherwise stated in this report.

5. On the basis of the written representation received from the Directors, as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a Director, in terms of clause (g) of Sub-Section (1) of section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information, and according to the explanations given to us, the said accounts Subject to Note No. 2(B) Regarding Valuation of finished goods, Note no.2 (E) Regarding Leave encashment Benefits, read together with other Notes as per Schedule 20 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, 2011;

b) In the case of the Profit & Loss Account of the PROFIT for the year ended on that date; and

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

Annexure referred to in Paragraph of our Auditors' Report on even date on the Financial Statements for the year ended 31ST March, 2011 of TECHNOCRAFT INDUSTRIES (INDIA) LIMITED on the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that:-

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

1 b As explained to us, the said fixed assets have been physically verified by the Management during the year which is reasonable and no material discrepancies have been noticed on such verification.

1 c During the year The Company has sold fixed assets amounting to Rs.225.13 Lacs in Yarn division however it does not affect the going concern of company.

2 a The stock of Finished Goods, Goods-in-Process, Raw Materials and Stores & Spares parts have been physically verified during the year by the Management and is reasonable in view of the nature of products of the Company.

2 b As explained to us, the procedure of physical verification of the above stocks followed by the Management is, in our opinion reasonable and adequate in relation to the size of the Company and nature of its business.

2 c The Company has maintained proper records of the inventories and the discrepancies noticed between the physical stock and book stock were not significant and the same have been properly dealt with in the Books of Account.

3 a In our opinion and according to the information and explanations given to us, the company has granted unsecured loans to 5 parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount of Loan granted during the year was Rs.2771.37 Lakhs and the year ended balance of Loan given to such parties was Rs.849.03 lakhs.

b In our opinion, the rate of interest and other terms and conditions on which Loans have been granted to parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facies, prejudicial to the interest of the company.

c Payment of Principal amount and interest are regular wherever stipulated.

d There is no overdue amount of loans granted to Companies, Firms or other parties listed in the register maintained under section 301 o the Companies Act, 1956.

e The Company has not taken any loan, Secured or Unsecured from Companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956 and as such provision of sub clause 3(f) & 3 (g) are not applicable.

4 On the basis of such checks carried out during the course of Audit and according to the information and explanations given to us, we are of the opinion that there is an adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of stores, raw materials including components, plant & machinery, equipments and other assets and for sale of goods and services.

5 a According to the information and explanation given to us, particulars of contracts or arrangement referred to in Under section 301 of the Companies Act, 1956 have been properly entered in the register required to be maintained under that section;

b The transaction made in pursuance of such contract or arrangements have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services or the prices at which transaction for similar goods, materials or services have been made with other parties.

6 The company has not accepted any deposits from the public to which the provisions of section 58A, 58AA and any other relevant provisions of the Companies Act, 1956 and the rules framed there under apply.

7 We have been informed that the Company has its own Internal Audit department which conducts the internal audit of the company and in our opinion the same is commensurate with the size and nature of its business.

8 We have broadly reviewed the books of account and records maintained by the company relating to manufacturing of cotton yarn pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act 1956 and are of opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made detailed Examination of the records with view to determining whether they are accurate or complete. To the best of knowledge and according to the information given to us, the central government has not prescribed the maintenance of cost records for any other products of the company.

9 a As per the records of the company & as explained to us, the Company have generally been regular in depositing provident fund dues, state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues with the appropriate authorities and there are no undisputed amounts payable for the same were outstanding as at 31st March, 2011, for a year exceeding six months from the date they became payable.

b On the basis of our Examination of the documents and records. The amounts of disputed statutory dues which have not been deposited with the appropriate authorities are as under:-

Name of the Statute Nature of dues Amount Forum where (in lacs) dispute is pending

Income Tax Act, 1961 Income Tax & Out of total demand of Rs.155.19 Lacs Interest for A.Y.2002-03, Rs.79.75 Lacs Refund of A.Y.2006-2007 is adjusted against A.Y. 2002-2003 75.44 lakh demand of A.Y.2002-03 & Balance outstanding is Rs.75.44 Lacs. Appeal pending with I.T.A.T.for disposal

For A.Y. 2007-2008 63.80 Lakh CIT (Appeals)

10. The company has no accumulated losses and has not incurred any cash losses during the financial Year covered by our audit or in the immediately preceding financial year.

11 According to information & explanations given to us and the books and records examined by us, the Company has not defaulted in repayment of dues to Banks.

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

13 a In respect of investment dealt or traded by the company, proper records are maintained in respect of transaction and contracts and timely entries have been made therein.

b According to the information and explanations given to us, the shares and units of mutual fund have been held by the company in its own name.

14 In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantee for cash credit taken by others from banks are not prima facial prejudicial to the interest of the company.

15 In our opinion and according to the information and explanations given to us, the term loans taken by the company have been applied for the purpose for which the term loans were obtained.

16 According to information & explanations given to us, the company has used its funds properly according to the nature and purposes of the funds.

17 The company has not made any preferential allotment of shares to parties and Companies covered in the register maintained u/s. 301 of the Companies Act, 1956.

18 The Company has not issued any Debentures during the year.

19 According to information and explanations given to us, the company has not raised any money by public issue during the year.

20 According to information and explanation given to us, no fraud on or by the Company has been noticed or reported during the period.

21 Other provision of the said order are either Nil or Not Applicable to the Company.

For M.L. SHARMA & CO.

Chartered Accountants F.R.No.109963W

(C.H. Bandi)

Place: Mumbai Partner

Dated: 03.08.2011 Membership No.5385


Mar 31, 2010

We have audited the attached Balance Sheet of TECHNCRAFT INDUSTRIES (INDIA) LIMITED as at 31st March, 2010 and also the Profit & Loss Account and the Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

We 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 ouropinion. Further we report that:

As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of Section 227(4A) of the Companies Act, 1956, we annex hereto, a statement on the matters specified in Paragraphs 4 and 5 of the said Order.

Further to our comments in the Annexure referred to above, we report that:

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

2. In our opinion, proper books of account as required by the Companies Act, 1956(as amended) have been kept by the Company so far as appears from our examination of those Books.

3. The Balance Sheet, the Profit & Loss Account and Cash Flow Statement dealt with by the report are in agreement with the Books of Account of the Company.

4. In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement complies with the Mandatory Accounting standards referred in section 211(3c) of the Companies Act, 1956 except as otherwise stated in this report.

5. On the basis of the 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 31st 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.

6. In our opinion and to the best of our information, and according to the explanations given to us, the said accounts Subject to Note no. 2 (C) regarding finished goods, Note no.2 (F) Regarding Leave encashment Benefits, Note no.2 (Q) Regarding non-provision of interest income, and Note no. 2 (R) Regarding non provision of diminution in value of Investment, read together with other Notes as per Schedule 21 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, 2010;

b) In the case of the Profit & Loss Account of the PROFIT for the year ended on that date; and

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

Annexure referred to in Paragraph of our Auditors Report on even date on the Financial Statements for the year ended 31st March, 2010 of TECHNOCRAFT INDUSTRIES (INDIA) LIMITED) on the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that:-

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

b As explained to us, the said fixed assets have been physically verified by the Management during the year which is reasonable and no material discrepancies have been noticed on such verification.

c In our opinion, no substantial parts of Fixed Assets have been disposed of during the year.

2 a The stock of Finished Goods, Goods-in-Process, Raw Materials and Stores & Spares parts have been physically verified during the year by the Management and is reasonable in view of the nature of products of the Company.

b As explained to us, the procedure of physical verification of the above stocks followed by the Management is, in our opinion reasonable and adequate in relation to the size of the Company and nature of its business.

c The Company has maintained proper records of the inventories and the discrepancies noticed between the physical stock and book stock were not significant and the same havebeen properly dealt with in the Books of Account.

3 a In our opinion and according to the information and explanations given to us, the company has granted unsecured loans to 7 parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount of Loan granted during the year was Rs.4645.50 Lakhs and the year ended balance of Loan given to such parties was Rs.3088.56 lakhs.

b In our opinion, the rate of interest and other terms and conditions on which Loans have been granted to parties listed in the register maintained under section 301 of the Companies Act, 1956 are not primafacies, prejudicial to the interest of the company.

c Payment of Principal amount and interest are regular wherever stipulated.

d There is no overdue amount of loans granted to Companies, Firms or other parties listed in the register maintained under section 3010the Companies Act, 1956.

e The Company has not taken any loan, Secured or Unsecured from Companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956 and as such provision of sub clause 3(f) & 3 (g) are not applicable.

4 On the basis of such checks carried out during the course of Audit and according to the information and explanations given to us, we are of the opinion that there is an adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of stores, raw materials including components, plant & machinery, equipments and other assets and for sale of goods and services.

5 a According to the information and explanation given to us, particulars of contracts or arrangement referred to in Under section 301 of the Companies Act, 1956 have been properly entered in the register required to be maintained under that section;

b The transaction made in pursuance of such contract or arrangements have been made at prices which are reasonable having regard to prevailing market prices for such goods, materials or services or the prices at which transaction for similar goods, materials or services have been made with other parties.

6 The company has not accepted any deposits from the public to which the provisions of section 58A, 58AA and any other relevant provisions of the Companies Act, 1956 and the rules framed there under apply.

7 In our opinion Company has Internal Audit system commensurate with the size and nature of its business.

8 We have broadly reviewed the books of account and records maintained by the company relating to manufacturing of cotton yarn pursuant to the Rules made by the Central Government for the

maintenance of cost records under section 209 (1) (d) of the Companies Act 1956 and are of opinion that prima facie the prescribed accounts and records have been made and maintained. We have however not made detailed Examination of the records with view to determining whether they are accurate or complete. To the best of knowledge and according to the information given to us, the central government has not prescribed the maintenance of cost records for any other products of the company.

9 a As per the records of the company & as explained to us, the Company have generally been regular in depositing provident fund dues, state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues with the appropriate authorities and there are no undisputed amounts payable for the same were outstanding as at 31st March, 2010, for a year exceeding six months from the date they became payable.

b On the basis of our Examination of the documents and records. The amounts of disputed statutory dues which have not been deposited with the appropriate authorities are as under: -

Name of the Statute Nature of dues Amount Forum where

(in lacs) dispute is pending

Income Act, 1961 Income Tax & Interest For A.Y. 2002-2003 155.19 I.T.A.T

10. The company has no accumulated losses and has not incurred any cash losses during the financial Year covered by our audit or in the immediately preceding financial year.

11 According to information & explanations given to us and the books and records examined by us, the Company has not defaulted in repayment of dues to Banks.

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

13 In our opinion, the Company is not a Chit-fund or a Nidhi/Mutual benefits fund/Society, therefore the provision of the Clause 4(xiii) of Para 4 of the Order are not applicable to the Company.

14 a In respect of investment dealt or traded by the company, proper records are maintained in

respect of transaction and contracts and timely entries have been made therein.

b According to the information and explanations given to us, the shares and units of mutual fund have been held by the company in its own name.

15 In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantee for cash credit taken by others from banks are not prima facial prejudicial to the interest of the company.

16 In our opinion and according to the information and explanations given to us, the term loans taken by the company have been applied for the purpose for which the term loans were obtained.

17 According to information & explanations given to us, the company has used its funds properly according to the nature and purposes of the funds.

18 The company has not made any preferential allotment of shares to parties and Companies covered in the register maintained u/s. 301 of the Companies Act, 1956.

19 The Company has not issued any Debentures during the year.

20 According to information and explanations given to us, the company has not raised any money by public issue during the year.

21 According to information and explanation given to us, no fraud on or by the Company has been noticed or reported during the period.

For M. L. SHARMA & CO.

Firm Reg No. 109963W

Chartered Accountants

(C. H. Bandi)

Place :Mumbai Partner

Dated: 04th August,2010 Membership No. 5385





 
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