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Auditor Report of Texmo Pipes & Products Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Texmo Pipes and Products Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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 forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ) ("the Act") with respect to the preparation of these standalone financial statements that gives 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 referred to in section 133 of the Companies Act, 2013 read with rule 7 of the Companies (accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

We have taken into account the provisions of the Act, the accounting & auditing standards and matters which are required to be included in the audit report under the provision of the Act and the Rules made there under.

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation 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 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.

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

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 March 31, 2015, and its profit and its cash flows forthe year ended on that date.

Emphasis of Matter

We draw attention to Note 27 to the standalone financial statements which, describes the uncertainty related to the outcome of the lawsuit filed against the Insurance Company.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d. In our opinion, the aforesaid 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 written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, 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 Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditor's) 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 29 to the standalone financial statement.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under "Report on Legal and Regulatory Requirements' section of our report on even date)

(i) Having regard to the operations/activities/business of the Company during the year clause (vi) of the order is not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(iii) In respect of its inventories:

(a) As explained to us, the inventory has been physically verified at reasonable intervals during the year by the Management;

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013. In respect of such loans:

(a) The receipts of principal amounts have been as per stipulations.

(b) In respect of overdue amounts of over Rs. 1 lakh remaining outstanding as at the year-end, as explained to us, Management has taken reasonable steps for recovery of the principal amounts and interest.

(v) In our opinion and according to the information and explanation given to us there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods & services. We have not observed any major weakness in the internal control system during the course of our audit.

(vi) According to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of section 73 to 76 or any other relevant provisions of the Companies Act, 2013 & the rules framed there under; (vii) (a)According to information explanation given to us and on the basis of our examination of records of the Company, amount deducted/accrued in the books of accounts in respect of undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, value added tax, cess, Professional tax and other material statutory dues have been regularly deposited during the year by the company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, value added tax, cess, Professional tax and other material statutory dues were in arrears as at 31sl March 2015, for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there are no material dues of wealth tax, duty of customs, excise duty and cess which has not been deposited with the appropriate authorities on account of any dispute. However, according to the information and explanations given to us, the following dues of income tax, sales tax and value added tax have not been deposited by the Company on account of disputes:

Name of the Nature of dues Amount Period to which Statute (in lacs) the amount relates

Central Sales Central Sales Tax 44.95 2007-08

Tax Act,1956 0.72 2008-09

1.22 2011-12

Entry Tax Act, 1976 Entry Tax 36.32 2007-08

12.93 2008-09

Madhya Pradesh Value Added Tax 113.79 2007-08

Value Added 37.83 2009-10 and Tax,2002 2010-11

67.46 2011-12 and 2012-13

1.37 2012-13

Income Tax Act, 1961 Income Tax 16.05 2010-11

21.07 2011-12

Name of the Statute Forum where the dispute is pending

central sales Tax Act,1956 M.P. High Court, Jabalpur

M.P. Commercial Tax Appellate Tribunal

Deputy Commissioner of Commercial Tax, Indore

Entry Tax Act, 1976 M.P. High Court, Jabalpur

M.P. Commercial Tax Appellate Board

Madhya Pradesh Value Added Tax,2002 M.P. High Court, Jabalpur

M.P. Commercial Tax Appellate Board

Additional Commissioner of Commercial Tax, Indore

Appellate Deputy Commissioner of Commercial Tax, Khandwa

Income Tax Act,1961 Income Tax Appellate Tribunal, Indore

Commissioner of Income Tax (Appeals) II, Indore

(c) There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

(viii) The company does not have any accumulated losses as at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to bank and financial institutions. The Company has not issued any debentures.

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions;

(xi) In our opinion and according to the information and explanations given to us, the term loans applied, on an overall basis, forthe purpose for which they were obtained.

(xii) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the year.

For Pankaj Somaiya & Associates LLP

Firm Registration No. 010081C/C4000001 Chartered Accountants

Place: Burhanpur (MP) CAPankaj Somaiya

Date : 26th May, 2015 Partner

Membership No.079918


Mar 31, 2014

We have audited the accompanying financial statements of Texmo Pipes and Products 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Forming an Opinion and Reporting on Financial Statements 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 March 31,2014;

(b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Emphasis of Matter

We draw attention to Note 27 to the financial statements regarding fire insurance claim settlement less to the extent of Rs. 769.50 Lacs for which the Company has filed lawsuit against the Insurance Company, in view of the uncertainty related to the outcome of the lawsuit filed by the Company; no adjustments have been made in this regard to the financial Statements for the year ended 31st March 2014. Our opinion is not qualified in respect of this matter.

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. Asrequiredby section227(3) oftheAct, 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 and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

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 and with the returns received from branches not visited by us;

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 CompaniesAct, 1956.

ANNEXURE TO THE AUDITORS'' REPORT (Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

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

(b) As explained to us all the fixed assets have been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification as compared with the book records.

(c) During the year, the Company has not disposed off substantial part of fixed assets and the going concern status of the Company is not affected;

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the Management;

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) As informed to us, the company has granted unsecured loans during the year to one such firm covered in the register maintained under section 301 of the Act. The Maximum involved during the period and the balances of said loans were aggregating to Rs.11.45 Lacs and Rs 43.85 Lacs respectively. As informed the company has not given any loans, secured or unsecured to companies or other parties listed in the register maintained under section 301 of the Act.

(b) As per the information & records made available, the rate of interest and other terms and condition of Loans granted by the Company are prima facie not prejudicial to the interest of the company except to the extent that there are no covenants with regards to repayment of loan or interest thereon and security.

(c) In respect of aforesaid loans granted, whether the amount (principal and interest) has been repaid/paid regularly or not cannot be commented upon, as there is no stipulation as payment/repayment of the principal amount including interest.

(d) As per information given to us and on the basis of records made available to us and subject to (a) & (b) above, the Company has taken reasonable steps for recovery of overdue amount.

(e) As Informed, the Company has not taken any loans, secured and unsecured from the companies, firms or other parties covered in register maintained under section 301of Companies Act 1956. Accordingly the provisions Stated in Paragraph 4(iii) (e) to 4(iii) (g) of the order are not applicable.

(iv) In our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system;

(v) (a) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 oftheCompaniesAct, 1956 have been so entered.;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under;

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

(viii) We have broadly reviewed the books of accounts maintained by the Company in respect of products where pursuant to the rules made by Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub section (1) of section 209 of the CompaniesAct, 1956, and we are of opinion that prima facie the prescribed accounts & records have been made & maintained.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including

provident fund, employee''s state insurance, income tax, sales tax, custom duty, excise duty, cess and other statutory dues to the extent applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employee''s state insurance, income tax, wealth tax, service tax, sales tax, custom duty, excise duty and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to records of the Company, the dues outstanding of income tax, sales tax, wealth tax, service tax, custom duty, excise duty, on account of any dispute, are as follows:

Name of the Statue Nature of Forum where dues dispute pending

M P VAT Act VAT Additional Deputy Commission of Commercial tax, Indore

M P VAT Act VAT Appellate Deputy Commissioner of Commercial Tax, Indore

M P VAT Act VAT Appellate Deputy Commissioner of Commercial Tax, Khandwa

Entry TaxAct Entry Tax MPCommercialTaxAppellate Tribunal, Bhopal

Central Sales CST M P Commercial Tax TaxAct Appellate Board

Entry TaxAct Entry Tax MP High Court, Jabalpur

MPVATAct VAT MPHighCourt,Jabalpur

Central Sales CST MP High Court, Jabalpur TaxAct

Income TaxAct Income Tax Commissioner of Income Tax (Appeals) II

Income TaxAct Income Tax Commissioner of Income Tax (Appeals) II

Name of the Director Per iod to which Amount relates (inRslakhs)

M P VAT Act 2010-11 1.77

M P VAT Act 2010- 11 37.74

M P VAT Act 2009- 10 4.08

Entry TaxAct 2008-09 12.93

Central Sales 2008-09 1.42 Tax ACT

Entry TaxAct 2007-08 36.32

M P VAT Act 2007-08 113.79

Central Sales 2007-08 44.95 Tax ACT Income TaxAct 2011- 12 42.75

Income TaxAct 2010- 11 16.04

(x) The company has no accumulated losses at the end of the financial year and it has not incurred cash loss in the current and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to bank. The Company had no transactions with financial institutions and had no debentures outstanding during the year;

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities;

(xiii) The nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund/ societies;

(xiv) The Company does not deal or trade in shares, securities, debentures and other investments;

(xv) On the basis of the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions;

(xvi) On the basis of the records examined by us, and relying on the information compiled by the Company for co- relating the funds raised to the end use of term loans, we have to state that, the Company has, prima-facie, applied the term loans for the purposes for which they were obtained;

(xvii) According to information and explanations 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 usage of funds, we are of the opinion that, prima-facie, as at the close of the year, short term funds have not been utilized for long term investment;

(xviii) The Company has not made any preferential allotment of shares to the parties covered in the register maintained under section 301 of theAct;

(xix) During the year, the Company has not issued any debentures;

(xx) The company has not raised any money by public issue during the year.

(xxi) Based upon the audit procedures performed in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we report that we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor we have been informed of such cases by the Management.

For Pankaj Somaiya & Associates LLP. Firm Registration No. 010081C Chartered Accountants CA Pankaj Somaiya

Place :Burhapur (M.P) Partner Date: 29th May,2014 Membership No.079918


Mar 31, 2013

Report on the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required, 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 March 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the profit 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

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 and proper returns adequate for the purposes of our audit have been received from branches not visited by us;

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 and with the returns received from branches not visited by us;

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 TO THE AUDITORS'' REPORT

(As referred to in paragraph 03 of our Report to the members of Texmo Pipes and Products Limited on the accounts as at and for the year ended 31st March 2013)

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

(b) As explained to us all the fixed assets have been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification as compared with the book records.

(c) During the year, the Company has not disposed off substantial part of fixed assets and the going concern status of the Company is not affected;

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the Management;

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) As per the information and records made available, the Company has granted unsecured loan to two companies covered in the register maintained under Section 301 of the Companies Act,1956.

The maximum amount involved during the period and the balances of said loans were aggregating to Rs. 32.40 lacs and Rs. 32.40 lacs respectively. As informed, the company has not given any loans, secured and unsecured to firms or other parties listed in the register maintained under section 301 of the Act;

(b) As per the information and records made available, the rate of interest and other terms and conditions of loans granted by the company are prima facie not prejudicial to the interest of the company except to the extent that there are no covenants with regard to the repayment/ payment of loan and interest thereon and security.

(c) In respect of aforesaid loans granted, whether the amount( principal as well as interest) has been repaid/paid regularly or not cannot be commented upon, as there is no stipulation as regard to the repayment/payment of the amount;

(d) As per the information given to us and on the basis of records made available to us, and subject to (a) and (b) above, the unsecured loan granted to companies of Rs.32.40 Lacs is considered doubtful and no interest is provided on such loans, the company has taken reasonable steps for the recovery of the outstanding amount.

(e) As informed, the company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions stated in paragraph 4 (iii) (f) and (g) of the order are not applicable.

(iv) In our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system;

(v) (a) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five Lacs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under;

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

(viii) We have broadly reviewed the books of account maintained by the company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub section (1) of Section 209 of the Act and we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income tax, wealth tax, service tax, sales tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the company, the dues outstanding of income tax, sales tax, wealth tax, Customs duty, excise duty and cess on account of any dispute, are as follows:

S. No. Name of the Statue Nature of Forum where dues dispute pending

1. M P VAT Act VAT Additional Deputy Commission of Commercial tax, Indore

2. Central Sales Tax Act CST Additional Deputy Commission of Commercial tax, Indore

3. M P VAT Act VAT Appellate Deputy Commissioner of Commercial Tax, Khandwa

4. Entry Tax Act Entry Tax M P Commercial Tax Appellate Tribunal, Bhopal

5. Central Sales Tax Act CST M P Commercial Tax Appellate Board

6. M P VAT Act VAT Appellate Deputy Commissioner of Commercial Tax, Khandwa

7. Entry Tax Act Entry Tax MP High Court, Jabalpur

8. M P VAT Act VAT MP High Court, Jabalpur

9. Central Sales Tax Act CST MP High Court, Jabalpur

10. Entry Tax Act Entry Tax Appellate Deputy Commissioner of Commercial Tax, Khandwa

11. Income Tax Act Income Tax Commissioner of Income Tax (Appeals) II

12. Income Tax Act Income Tax Commissioner of Income Tax (Appeals) II

Name of the Statute Period to which Amount relates (in Rs. lakhs)

MP VAT Act 2010-11 47.17

Central Sales Tax Act 2010-11 1.01

MP VAT Act 2009-10 5.10

Entry Tax Act 2008-09 12.93

Central Sales Tax Act 2008-09 1.42

MP VAT Act 2008-09 0.48

Entry Tax Act 2007-08 36.32

MP VAT Act 2007-08 113.79

Central Sales Tax Act 2007-08 44.95

Entry Tax Act 2006-07 38.21

Income Tax Act 2006-07 3.92

Income Tax Act 2010-11 32.09

(x) Clause (x) of paragraph 4 of the order is not applicable to the Company;

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to bank. The Company had no transactions with financial institutions and had no debentures outstanding during the year;

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities;

(xiii) The nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund societies;

(xiv) The Company does not deal or trade in shares, securities, debentures and other investments;

(xv) On the basis of the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions;

(xvi) On the basis of the records examined by us, and relying on the information compiled by the Company for co- relating the funds raised to the end use of term loans, we have to state that, the Company has, prima-facie, applied the term loans for the purposes for which they were obtained;

(xvii) According to information and explanations 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 usage of funds, we are of the opinion that, prima-facie, as at the close of the year, short term funds have not been utilized for long term investment;

(xviii) The Company has not made any preferential allotment of shares;

(xix) During the year, the Company has not issued any debentures;

(xx) During the year, the Company has not raised any money by public issue;

(xxi) Based upon the audit procedures performed in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we report that we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor we have been informed of such cases by the Management.



For Pankaj Somaiya & Associates

Firm Registration No. 010081C

Chartered Accountants





Place : Burhanpur (MP)

Date : 28th May 2013 CA Pankaj Somaiya

Partner

Membership No.079918


Mar 31, 2012

1. We have audited the attached Balance Sheet of Texmo Pipes and Products Limited ("the Company") for the year ending on 31st March, 2012 and the related Profit & Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditors' Report) (Amendment) Order 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 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 during the course of the audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Without qualifying our opinion we invite your attention to Note 29forming part ofthe statement regarding fire insurance claim settlement less to the extent of Rs. 906.83 lakhs for which the company has initiated legal action. Pending final outcome in the matter, no adjustments have been made in this regard to the financial results for the year ended 31st March 2012.

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

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for 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, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

(e) On the basis of the written confirmations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31.03.2012 from being appointed as a Director of the Company in terms of Clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statement read together with the notes thereon, give the information required by the Companies Act, 1956, in the manner so required, except for the matter stated in paragraph 4 above, give a true and fair view in conformity with the accounting principles generally accepted in India

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31 " March, 2012;

(ii) in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS* REPORT (As referred to in paragraph 03 of our Report to the members of Texmo Pipes and Products Limited on the accounts as at and for the year ended 31st March 2012)

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

details and situation of its fixed assets;

(b) As explained to us all the fixed assets have been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification as compared with the book records.

(c) During the year, the Company has not disposed off substantial part of fixed assets and the going concern status of the Company is not affected;

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the

Management;

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) As informed to us the Company has not granted any loan secured or unsecured to companies,

firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved was Rs. 200 Lacs. The year end balance is ofRs. 32.40 Lacs;

(b) According to information and explanations given to us the Company has taken unsecured loan from a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved was of Rs. 72.68 Lakhs. The year end balance is of Rs. 36.00 lakhs.

(c) In our opinion, the rate of interest and other terms and conditions on which loans have been given to and taken from such 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;

(d) There is no stipulation as to the repayment of loan and interest thereon, hence reply to Clauses

(iii) (c) & (iii)(d) is nil;

(iv) In our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system;

(v) (a) Based on the audit procedures applied by us and according to the information and explanations

given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 3 01 of the Companies Act, 1956 have been so entered.;

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 5 8 A, 5 8 AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under;

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

(viii) The requirement of maintenance of cost records as prescribed by the Central Government u/s 209(1)

(d) of the Companies Act, 1956 is not applicable to the Company.

(ix) (a) According to information and explanations given to us and records of the Company examined by

us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, custom duty, excise duty, cess and other statutory dues to the extent applicable to it. There are no undisputed statutory dues as referred to above as at 31st March 2012 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess which have not been deposited on account of any dispute except for the following:

Sl. No. Name of the Statue Nature of dues Forum where Period to which Amount dispute pending relates in Rs lakhs

1. MPVAT Act VAT Appellate Deputy Commissioner 2009-10 5.10 of Commercial Tax, Khandwa

2. Entry Tax Act Entry Tax MP Commercial Tax 2008-09 12.93 Appellate Tribunal, Bhopal

3. Central Sales Tax Act CST MP Commercial Tax 2008-09 0.72 Appellate Tribunal, Bhopal

4. Entry Tax Act Entry Tax MP High Court, Jabalpur 2007-08 39.23

5. MP VAT Act VAT MP High Court, Jabalpur 2007-08 125.88

6. Central Sales Tax Act CST MP High Court, Jabalpur 2007-08 91.22

7. Entry Tax Act Entry Tax Appellate Deputy 2006-07 48.41 Commissioner of Commercial Tax, Khandwa

(x) Clause (x) of paragraph 4 of the order is not applicable to the Company;

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to bank. The Company had no transactions with financial institutions and had no debentures outstanding during the year;

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities;

(xiii) The nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund / societies;

(xiv) The Company does not deal or trade in shares, securities, debentures and other investments;

(xv) On the basis of the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions;

(xvi) On the basis of the records examined by us, and relying on the information compiled by the Company for co- relating the funds raised to the end use of term loans, we have to state that, the Company has, prima-facie, applied the term loans for the purposes for which they were obtained;

(xvii) According to information and explanations 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 usage of funds, we are of the opinion that, prima-facie, as at the close of the year, short term funds have not been utilized for long term investment;

(xviii) The Company has not made any preferential allotment of shares;

(xix) During the year, the Company has not issued any debentures;

(xx) The Management has disclosed the endues of money raised by Public Issue and the same has been verified byus.

(xxi) Based upon the audit procedures performed in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we report that we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor we have been informed of such cases by the Management.

For Pankaj Somaiya & Associates Firm Registration No. 010081C Chartered Accountants

Place: Burhanpur (MP)

Date : 16th August 2012 CA Pankaj Somaiya

Partner

Membership No.079918


Mar 31, 2011

1. We have audited the attached Balance Sheet of Texmo Pipes and Products Limited ("the Company") for the year ending on 31s, March, 2011 and the related Profit & Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement(s). 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 ouraudit provides a reasonable basis forouropinion.

3. As required by the Companies (Auditors' Report) Order, 2003, as amended by the Companies (Auditors' Report) (Amendment) Order 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 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 during the course of the audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

(a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessaryforthepurposeofourAudit;

(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, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreementwiththebooksof account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

(e) On the basis of the written confirmations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31.03.2011 from being appointed as a Director of the Company in terms of Clause (g) of Subsection (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statement read together with the 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 :-

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,2011;

(ii) in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS" REPORT

(As referred to in paragraph 03 of our Report to the members of Texmo Pipes and Products Limited on the accounts as at and for the year ended 31st March 2011)

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

(b) As explained to us all the fixed assets have been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification as compared with the book records.

(c) During the year, the Company has not disposed off substantial part of fixed assets and the going concern status of the Company is notaffected;

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the Management;

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to bookrecordswerenotmaterial.

(iii) (a) The Company had granted unsecured loans to two Companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved was Rs.9,00,00,000/- to two such Companies.The year end balance is of Rs.2,32,39,999/-;

(b) The Company had outstanding unsecured loan from a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The outstanding maximum amount was Rs. 1,71,94,530/-from one such Company. The year end balance is of Rs. 1,68,745/-.

(c) In our opinion, the rate of interest and other terms and conditions on which loans have been given to and taken from such parties listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the internal the company;

(d) There is no stipulation as to the repayment of loan and interest thereon, hence reply to Clauses (iii)(c) & (iii)(d)isnil;

(iv) In our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system;

(v) (a) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 ofthe Companies Act, 1956 have been so entered.; (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions ofthe Companies Act, 1956 and the rules framed there under;

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

(viii) The requirement of maintenance of cost records as prescribed by the Central Government u/s 209(1) (d) of the Companies Act, 1956 is not applicable to the Company.

(ix) (a) According to information and explanations given to us and records of the Company examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees' state insurance, income tax, sales tax, custom duty, excise duty, cess and other statutory dues to the extent applicable to it. There are no undisputed statutory dues as referred to above as at 31 * March 2011 outstanding for a period of more than six months from the date they become payable. (b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess which have not been deposited on account of any dispute except for the following:

S Name of the Statue Nature of Forum where Period to Amount No dues dispute pending which in relates Rs.lakhs

1. Entry Tax Act Entry Tax MP High Court, 2007-08 39.23 Jabalpur

2. MP VAT Act VAT MP High Court, 2007-08 125.88 Jabalpur

3. Central Sales Tax Act CST MP High Court, 2007-08 91.22 Jabalpur

(x) Clause (x) of paragraph 4 of the order is not applicable to the Company;

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted inrepayment of dues to bank. The Company had no transactions with financial institutions and had no debentures outstanding during the year;

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and othersecurities;

(xiii) The nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefitfund/societies;

(xiv) The Company does not deal or trade in shares, securities, debentures and other investments;

(xv) On the basis of the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks orfinancial institutions;

(xvi) On the basis of the records examined by us, and relying on the information compiled by the Company for co- relating the funds raised to the end use of term loans, we have to state that, the Company has, prima facie, applied the term loans for the purposes for which they were obtained;

(xvii) According to information and explanations 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 usage of funds, we are of the opinion that, prima-facie, as at the close of the year, short term funds have not been utilized for long term investment;

(xviii) The Company has not made any preferential allotment of shares;

(xix) During the year, the Company has not issued any debentures;

(xx) We have verified the end use of money raised by Public Issue as disclosed in Note. 05 of Schedule 22. Pending Utilization of the funds raised through Public Issue a sum of Rs. 288.52 Lakhs has been temporarily invested in Bank Deposits.

(xxi) Based upon the audit procedures performed in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we report that we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor we have been informed of such cases by the Management.

Place :Burhanpur (MP)

Date: 11th August2011

For Pankaj Somaiya& Associates

Firm Registration No. 010081C

Chartered Accountants

CA Pankaj Somaiya

Partner

Membership No.079918




Mar 31, 2010

1. We have audited the attached Balance Sheet of Texmo Pipes and Products Limited ("the Company") for the year ending on 31st March, 2010 and the related Profit & Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto, which we have signed under reference to this report. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 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 during the course of the audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

(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, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

(e) On the basis of the written confirmations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31.03.2010 from being appointed as a Director of the Company in terms of Clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statement read together with the 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 :-

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

(ii) in the case of the Profit & Loss Account, of the Profit of the Company for the year ended on that date; and

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

Annexure To The Auditors Report (As referred to in paragraph 03 of our Report to the members of Texmo Pipes and Products Limited on the accounts as at and for the year ended 31st March 2010)

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

(b) As explained to us all the fixed assets have been physically verified by the management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification as compared with the book records.

(c) During the year, the Company has not disposed off substantial part of fixed assets and the going concern status of the Company is not affected;

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the Management;

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

(iii) (a) The Company has not granted any loans, secured or unsecured, during the year to companies firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly Clauses (iii)(b) to (iii)(d) of paragraph 4 of the order are not applicable to the Company;

The Company had taken unsecured loan from a Company covered in the register maintained under Section 301 of the Companies Act, 1956. The Company has taken a total Rs.6,44,10,000/- from one such Company. The year end balance is of Rs. 1,71,94,530/34.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from such 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) There is no stipulation as to the repayment of loan and interest thereon, hence reply to Clauses (iii)(c) & (iii)

(d) is nil; (iv) In our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system;

(v) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under;

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

(viii) The requirement of maintenance of cost records as prescribed by the Central Government u/s 209(1) (d) of the Companies Act, 1956 is not applicable to the Company.

(ix) (a) According to information and explanations given to us and records of the Company examined by us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, custom duty, excise duty, cess and other statutecy dues to the extent applicable to it. There are no undisputed statutory dues as referred to above as at 31st March 2010 outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess which have not been deposited on account of any dispute.

(x) Clause (x) of paragraph 4 of the order is not applicable to the Company;

(xi) The Company has not defaulted in repayment of dues to bank. The Company had no transactions with financial institutions and had no debentures outstanding during the year;

(xii) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities;

(xiii) The nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi / mutual benefit fund / societies;

(xiv) The Company does not deal or trade in shares, securities, debentures and other investments;

(xv) On the basis of the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions;

(xvi) On the basis of the records examined by us, and relying on the information compiled by the Company for co-relating the funds raised to the end use of term loans, we have to state that, the Company has, prima-facie, applied the term loans for the purposes for which they were obtained;

(xvii) According to information and explanations 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 usage of funds, we are of the opinion that, primafacie, as at the close of the year, short term funds have not been utilized for long term investment;

(xviii) The Company has not made any preferential allotment of shares;

(xix) During the year, the Company has not issued any debentures;

(xx) We have verified the end use of money raised by Public Issue as disclosed in Note. 04 of Schedule 21. Pending Utilization of the funds raised through Public Issue a sum of Rs. 2854.10 Lakhs has been temporarily invested in Mutual Funds and Bank Deposits.

(xxi) Based upon the audit procedures performed in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we report that we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor we have been informed of such cases by the Management.

For Pankaj Somaiya & Associates

Firm Registration No. 010081 C

Chartered Accountants

C A Pankaj Somaiya

Partner

Membership No.079918

Place: Burhanpur (MP)

Date :29th July 2010




Mar 31, 2009

1. We have audited the attached Balance Sheet of Texmo Pipes and Products Limited ("the Company") for the period ending on 31st March, 2009 and also the Profit & Loss Account of the Company for the period ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement(s). 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 audi t provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order 2004, issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 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 during the course of the audit, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

(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 and Profit & Loss Account dealt with by this report are in agreement with the books of account;

(d) In our opinion, the Profit and Loss Account and Balance Sheet dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable;

(e) On the basis of the written confirmations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 31.03.2009 from being appointed as a Director of the Company in terms of Clause (g) of Sub-section (1) of Section 274 of the Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statement read together with the 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 principle generally accepted in India :-

(i) in case of the Balance Sheet, of the state of affairs of the Company for the period ending 31st March, 2009; and (ii) in case of the Profit & Loss Account, of the Profit of the Company for the period ended on that date.

(Referred to in paragraph 03 of our Report of even date of Texmo Pipes and Products Limited (For the period ending 31st March 2009)

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

(b) Physical verification of the fixed assets of the Company was conducted by the Management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification as compared with the book records.

(c) During the period, the Company has not disposed off substantial part of fixed assets and the going concern status of the Company is not affected;

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the Management;

(b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory followed by the Management is reasonable and adequate in relation to the size of the Company and the nature of its business;

(c) The Company has maintained proper records of inventory and no discrepancies were noticed on physical verification as compared with book records;

(iii) (a) The Company has not granted any loans, secured or unsecured, during the year to companies firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

Accordingly Clauses (iii)(b) to (iii)(d) of paragraph 4 of the order are not applicable to the Company; The Company had taken unsecured loan from a Company covered in the register maintained under

Section 301 of the Companies Act, 1956. The Company has taken a total Rs.4,90,30,581/- from one such Company. The year end balance is of Rs.4,87,33,528/-.

(b) In our opinion, the rate of interest and other terms and conditions on which loans have been taken from such 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) There is no stipulation as to the repayment of loan and interest thereon, hence reply to Clauses (iii)(c) &(iii)(d)is nil;

(iv) In our opinion, there is adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system;

(v) Based on the audit procedures applied by us and according to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(vi) The Company has not accepted any deposits from the public within the meaning of Section 58A, 58 A A or any other relevant provisions of the Companies Act, 1956 and the rules framed there under;

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. 209(l)(d) of the Companies Act, 1956 is not applicable to the Company.

(a) According to information and explanations given to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, custom duty, excise duty, cess and other statutory dues to the extent applicable to it, except for Service Tax realised and payable of Rs. 1,06,358/- outstanding as on 31st March 2009 for a period of more than six months from the date they became payable;

(b) According to the information and explanation given to us, there are no dues in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess which have not been deposited on account of any dispute;

(ix) Clause (x) of paragraph 4 of the order is not applicable to the Company;

(x) The Company has not defaulted in repayment of dues to bank. The Company had no transactions with financial institutions and had no debentures outstanding during the year;

(xi) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities;

(xii) The nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi /mutual benefit fund/societies;

(xiii) The Company does not deal or trade in shares, securities, debentures and other investments;

(xiv) On the basis of the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions;

(xv) On the basis of the records examined by us, and relying on the information compiled by the Company for co-relating the funds raised to the end use of term loans, we have to state that, the Company has, prima-facie, applied the term loans for the purposes for which they were obtained;

(xvi) According to information and explanations 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 usage of funds, we are of the opinion that, prima-facie, as at the close of the year, short term funds have not been utilized for long term investment;

(xvii) The Company has not made any preferential allotment of shares;

(xviii) During the year, the Company has not issued any debentures;

(xix) The Company has not raised any money by public issues during the year;

(xx) Based upon the audit procedures performed in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we report that we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor we have been informed of such cases by the Management.

For Pankaj Somaiya & Associates Chartered Accountants

Place : Burhanpur (M.P.) CA Pankai Somaiya

Date : 14th August 2009

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