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Auditor Report of Uflex Ltd.

Mar 31, 2017

To the Members of UFLEX Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Uflex Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS 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 Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

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

In conducting our audit, we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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 including the Ind AS, of the state of affairs of the Company as at March 31, 2017, and its profit, total other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central

Government in terms of Section 143(11) of the Act, we give in “Annexure A” 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 including other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B” and

g) 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, as amended, 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 standalone Ind AS financial statements- Refer Note No. 35 A & 35 C to the Standalone Ind AS Financial Statement;

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

iii. According to the information and explanations given to us, there was no delay in transferring amounts, required to be transferred, to the Investor Education and protection Fund by the Company and

iv. The Company had provided requisite disclosures in its Standalone Ind AS Financial Statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the management we report that the disclosures are in accordance with the books of accounts maintained by the Company- Refer Note No. 44 to the Standalone Ind AS Financial Statement.

Referred to in Paragraph 1 under “Report on Other Legal and Regulatory Requirements” Section of our report of even date of UFLEX Ltd. (“the Company”), for the year ended on March 31, 2017, we report that:

1. In respect of Fixed Assets (property, plant and Equipment, Capital Work in progress, Investment property and Other Intangible Assets including development) of the Company:

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

b) The Fixed Assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such physical verification;

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company, except in respect of two residential flats aggregating to Rs. 25.15 lacs (original acquisition cost), where titles are pending for execution.

2. The inventory has been physically verified during the year by the management, at reasonable intervals and the discrepancies noticed on such physical verification of inventory, as compared to book records were not significant and were properly dealt with in the books of account.

3. The Company has not granted loans to any companies, firms, limited liability partnerships, or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 (‘the Act’) during the year. Further in respect of unsecured loan granted to one of the Indian subsidiary, which was outstanding as at the beginning of the year:

(a) The borrower has been regular in the payment of its dues, as per stipulated terms; and

(b) There are no overdue amounts in respect of this loan.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Act, with respect to the loans and investments made.

5. The Company has not accepted any deposits, under the provisions of Sections 73 to 76 or any other relevant provisions of the Act, and the rules framed there under during the year under report.

6. We have broadly reviewed the cost records maintained by the Company under Section 148(1) of the Act, and are of the opinion that prima- facie the prescribed records have been made and maintained.

7. In respect of Statutory dues:

a) According to the records of the Company, undisputed statutory dues including provident Fund, Employee’s State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other applicable statutory dues have been generally deposited regularly with the appropriate authorities.

b) According to the information and explanation given to us, there are no dues of custom duty, which have not been deposited on account of any dispute. However, following amount are involved (Gross of amount deposited under protest, if any) with under-mentioned forums, in respect of the disputed statutory dues:

i. Aggregate Sale Tax/ Value Added Tax of Rs. 1535.19 lacs, pending before (a) Various High Courts (Rs. 775.20 lacs), (b) Tribunal (Rs. 199.59 lacs) & (c) Assessing Authorities (Rs. 560.40 lacs).

ii. Aggregate Income Tax of Rs. 4065.13 lacs, pending before (a) High Court (Rs. 145.50 lacs), (b) ITAT (Rs. 331.85 lacs), & (c) CIT (Appeals) (Rs. 3587.78 lacs).

iii. Aggregate Excise duty of Rs. 6330.08 lacs, pending before (a) Supreme Court (Rs. 134.82 lacs) (b) Various High Courts (Rs. 72.56 lacs), (c) Tribunal (Rs. 4557.39 lacs), (d) Commissioner (Appeals) (Rs. 1240.76 lacs), & (e) Assessing Authorities (Rs. 324.55 lacs).

iv. Aggregate Service Tax of Rs. 151.91 lacs, pending before (a) Tribunal (Rs. 90.71 lacs), (b) Commissioner (Appeals) (Rs. 54.86 lacs) & (c) Assessing Authorities (Rs. 6.34 lacs).

8. Based on the audit procedure and according to the information and explanation given to us, we are of the opinion that the Company has not defaulted in repayment of loans or borrowings to banks. Further Company, does not have any loans and borrowings from financial institutions or government and has not issued any debentures.

9. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). The term loans raised during the year have been applied for the same purpose for which the loans were obtained.

10. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

11. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197, read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable.

13. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the Standalone Ind AS Financial Statements as required by the applicable Ind AS.

14. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

16. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act,1934.

ANNEXURE-B TO THE INDEPENDENT AUDITORS’ REPORT

Report on the Internal Financial Controls over Financial Reporting under Clause (i) of sub-Section 3 of Section 143 of the Companies Act, 2013 (‘the Act’) of Uflex Limited

We have audited the internal financial controls over financial reporting of Uflex Limited (‘the Company’) as of March 31, 2017, in conjunction with our audit of the Standalone Ind AS Financial Statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI’). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit.

We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the ‘Guidance Note’) and the Standards on Auditing, issued by ICAI and prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting were established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the Standalone Ind AS financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Standalone Ind AS financial statements for external purposes in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Standalone Ind AS financial statements in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, and that receipts and expenditures of the Company are being made only in accordance with authorizations of the Management and Directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the Standalone Ind AS Financial Statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the ICAI.

For VIJAY SEHGAL & CO.,

Chartered Accountants

Firm’s Regn. No.: 000374N

CA. S.V. SEHGAL

place : NOIDA partner

Dated : 30-05-2017 Membership No. 080329


Mar 31, 2016

We have audited the accompanying standalone financial statements of
UFLEX LIMITED ("the Company"), which comprise the Balance Sheet as at
31 March 2016, the Statement of Profit and Loss and the Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.

Management''s Responsibility for the 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 and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and the 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 the
assets of the Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

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

We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion on the 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 31st March, 2016 and its profit and its cash flows for the year
ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (''the
Order'') issued by the Central Government of India in terms of sub-
section (11) of Section 143 of the Act, we give in the ''Annexure-A'', a
statement on the matters specified in the paragraph 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
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 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 the 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, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2016
from being appointed as a Director in terms of Section 164(2) of the
Act.

(f) With respect to the adequacy of the internal financial controls
over financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate report in ''Annexure-B''; and

(g) With respect to the other matters to be included in the Auditor''s
report in accordance with the 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 Statement- - Refer Note 30 (B) to
the Financial Statement.

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

iii. According to the information and explanations given to us, there
was no delay in transferring amounts, required to be transferred, to
the Investor Education and provident Fund by the Company.

Referred to in paragraph 1 under "Report on Other Legal and Regulatory
Requirements" section of our report of even date of Uflex Ltd. ("the
Company"), for the year ended on 31st March, 2016, we report that:

1. In respect of Fixed Asset of the Company:

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

b) The Fixed Assets have been physically verified by the management at
reasonable intervals and no material discrepancies were noticed on such
physical verification;

c) According to the information and explanations given to us and on the
basis of our examination of the records of the Company, the title deeds
of immovable properties are held in the name of the company, except in
respect of two residential flats aggregating to Rs. 25.15 Lacs
(original acquisition cost), where titles are pending for execution.

2. The inventory has been physically verified during the year by the
management, at reasonable intervals and the discrepancies noticed on
such physical verification of inventory, as compared to book records
were not significant and were properly dealt with in the books of
account.

3. The Company had granted, during the year, interest bearing
unsecured loans, from time to time, to one of the Indian subsidiary
required to be covered in the register maintained under Section 189 of
the Companies Act, 2013 (''the Act''), which were repaid along with the
Interest, before the date of the Balance Sheet. In our opinion, the
terms and conditions for grant of these loans, were not prima-facie,
prejudicial to the interest of the Company.

Further in respect of the loans granted to above subsidiary and also
loan granted to another Indian Subsidiary, which was outstanding as at
the beginning of the year:

(a) The borrowers have been regular in the payment of the principal and
interest (where applicable), as per stipulated terms; and

(b) There are no overdue amounts in respect of these loans.

4. In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of Section
185 and 186 of the Act, with respect to the loans and investments made.

5. The Company has not accepted any deposits, under the provisions of
Sections 73 to 76 or any other relevant provisions of the Act, and the
rules framed there under during the year under report.

6. We have broadly reviewed the cost records maintained by the Company
under Section 148(1) of the Act, and are of the opinion that prima-
facie the prescribed records have been made and maintained.

7. In respect of Statutory dues:

a) According to the records of the Company, undisputed statutory dues
including provident Fund, Employee''s State Insurance, and Income Tax,
Sales Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess
and other applicable statutory dues have been generally deposited
regularly with the appropriate authorities.

b) According to the information and explanation given to us, there are
no dues of custom duty, which have not been deposited on account of any
dispute. However, following amount are involved (Gross of amount
deposited under protest, if any) with under-mentioned forums, in
respect of the disputed statutory dues:

i. Aggregate Sale Tax/Value Added Tax of Rs. 2433.56 lacs, pending
before (a) Various High Courts (Rs. 1209.90 lacs), (b) Tribunal (Rs.
188.02 lacs), (c) Commissioner (Appeals) (Rs. 99.11 lacs) & (d)
Assessing Authorities (Rs. 936.53 lacs).

ii. Aggregate Income Tax of Rs. 2727.53 lacs, pending before (a) High
Court (Rs. 145.50 lacs), (b) ITAT (Rs. 38.33 lacs), &

(c) CIT (Appeals) (Rs. 2543.70 lacs).

iii. Aggregate Excise duty of Rs. 6910.19 lacs, pending before (a)
Supreme Court (Rs. 142.54 lacs) (b) Various High Courts (Rs. 137.70
lacs), (c) Tribunal (Rs. 3890.33 lacs), (d) Commissioner (Appeals)
(Rs.2441.23 lacs), & (e) Assessing Authorities (Rs. 298.39 lacs).

iv. Aggregate Service Tax of Rs. 335.59 lacs, pending before (a)
Various High Courts (Rs. 130.37 lacs) (b) Tribunal (Rs. 144.02 lacs),
(c) Commissioner (Appeals) (Rs. 54.86 lacs) & (d) Assessing
Authorities (Rs. 6.34 lacs).

8. Based on the audit procedure and according to the information and
explanation given to us, we are of the opinion that the Company has not
defaulted in repayment of loans or borrowings to banks. Further
Company, does not have any loans or borrowings from any financial
institution, government or debentures holders during the year.

9. The Company did not raise any money by way of initial public offer
or further public offer (including debt instruments). The term loans
raised during the year have been applied for the same purpose for which
the loans were obtained.

10. According to the information and explanations given to us, no
material fraud by the Company or on the Company by its officers or
employees has been noticed or reported during the course of our audit.

11. According to the information and explanations give to us and based
on our examination of the records of the Company, the Company has paid
/ provided for managerial remuneration in accordance with the requisite
approvals mandated by the provisions of Section 197, read with Schedule
V to the Act.

12. In our opinion and according to the information and explanations
given to us, the Company is not a nidhi company. Accordingly, paragraph
3(xii) of the Order is not applicable.

13. According to the information and explanations given to us and
based on our examination of the records of the Company, transactions
with the related parties are in compliance with Sections 177 and 188 of
the Act where applicable and details of such transactions have been
disclosed in the financial statements as required by the applicable
accounting standards.

14. According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not made any preferential allotment or private placement of shares or
fully or partly convertible debentures during the year.

15. According to the information and explanations given to us and
based on our examination of the records of the Company, the Company has
not entered into non-cash transactions with directors or persons
connected with them. Accordingly, paragraph 3(xv) of the Order is not
applicable.

16. The Company is not required to be registered under Section 45-IA
of the Reserve Bank of India Act, 1934.Chartered Accountants


For VIJAY SEHGAL & CO.,

Chartered Accountants

Firm''s Regn. No.:000374N


CA. S.V.SEHGAL

place : NOIDA partner

Date : 27th May, 2016 Membership No. 080329


Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of UFlEX lIMITED. ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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 notified under 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

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, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: -

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 of the Company for the year ended on that date; and

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

emphasis of matter:

We draw attention to the statement attached to the financial statements, u/s 215(2) of the Companies Act, 1956, regarding inability of the Managing Director to sign these financial statements, owing to his non-presence, within the territory of India. 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"), as amended, 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 purposes of our audit;

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

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

d) In our opinion, the Balance Sheet, the Statement of Profit & Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards notified under the Act, read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e) On the basis of written representations received from the directors, as on 31st March, 2014, and taken on record by the Board of Directors, none of directors is disqualified as at 31st March, 2014, from being appointed as a director in terms of clause (g) of sub- section (1) of Section 274 of the Act.

[Referred to in paragraph 1 under the heading of "Report on Other legal and Regulatory Requirements" of our Report of even date]

1. In respect of fixed assets of the Company: -

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

(b) As explained to us, fixed assets have been physically verified by the management at reasonable intervals, having regard to the size of the company and nature of its assets and no material discrepancies were noticed on such physical verification;

(c) Substantial part of fixed assets have not been disposed off during the year.

2. In respect of inventories of the Company: -

(a) The inventories have been physically verified during the year by the management, at reasonable intervals;

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate, in relation to the size of the Company and the nature of its business;

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not significant and were properly dealt with in the books of account.

3. In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:-

a) The Company has not given any loan during the year to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956;

b) During the year, the Company has taken interest bearing unsecured loans aggregating to Rs. 2260.00 lacs, from five companies, covered in the register maintained under Section 301 of the Companies Act, 1956, which were repaid before the date of the Balance Sheet. Further the Company has paid the principle and interest on time. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of these loans, were not prima-facie prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there is 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. During the course of our audit, no major weakness has been noticed in the internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:-

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered;

b) In our opinion and according to the information and explanations given to us, 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 Royalty paid to one of the party, we are unable to comment whether the transactions were made at prevailing market prices at relevant times, as comparable prices could not be ascertained.

6. The Company has not accepted any deposit, during the year, under the provisions of Section 58A & 58AA of the Companies Act, 1956 and the rules framed there under.

7. The internal audit of the Company has been conducted by an independent firm of Chartered Accountants and 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 cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed records have been made and maintained.

9. In respect of Statutory dues:

a) According to the records of the Company, undisputed statutory dues including provident Fund, Investor Education and protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other applicable statutory dues have been generally deposited regularly with the appropriate authorities.

b) According to the information and explanations given to us, there are no dues of custom duty, wealth tax and cess, which have not been deposited on account of any dispute. However, following amounts are involved (Gross of amount deposited under protest, if any) with under-mentioned forums, in respect of the disputed statutory dues:

(i) Aggregate Sales Tax of Rs. 791.91 lacs, pending before (a) Various High Courts (Rs. 322.38 lacs),

(b) Tribunal (Rs. 40.39 lacs) & (c) Assessing Authorities (Rs. 429.14 lacs);

(ii) Aggregate Income Tax of Rs. 519.04 lacs, pending before (a) Delhi High Court (Rs. 145.50 lacs), (b) ITAT (Rs. 38.34 lacs) & (c) CIT (Appeals) (Rs. 335.20 lacs);

(iii) Aggregate Excise duty of Rs. 6736.96 lacs, pending before (a) Supreme Court (Rs. 134.82 lacs), (b) Various High Courts (Rs. 72.56 lacs),

(c) Tribunal (Rs. 4209.02 lacs) (d) Commissioner (Appeals) (Rs. 2041.03 lacs) & (e) Assessing Authorities (Rs. 279.53 lacs);

(iv) Aggregate Service Tax of Rs. 1301.13 lacs, pending before (a) Tribunal (Rs. 1239.93 lacs),

(b) Commissioner (Appeals) (Rs. 54.86 lacs) &

(c) Assessing Authorities (Rs. 6.34 lacs).

10. The Company has neither accumulated losses as at the year end nor it has incurred cash losses in the financial year under report and in the immediately preceding financial year.

11. Based on the audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or banks or debenture holders.

12. The Company has not granted loans and advances during the year, on the basis of security by way of pledge of shares, debentures and other securities.

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

14. The Company has not dealt or traded in shares, securities, debentures and other investments during the year. However, it has maintained proper records in respect of shares and other investments and are held in the name of the Company.

15. According to the information and explanations given to us, and the records examined by us, the Company has given corporate guarantees to banks for loans taken by its foreign subsidiaries and foreign step down subsidiaries; however in our opinion the terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

16. To the best of our knowledge & belief and according to the information and explanations given to us and the records of the Company examined by us, the term loans availed by the Company during the year, have been applied for the purposes for which 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 not been used for long-term investment.

18. During the year, company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. As the Company has neither issued debentures during the year nor have any outstanding balance in respect of debentures, as at year-end, hence provision of clause 4(xix) of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

20. The Company has not raised any money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the Company was noticed or reported during the year.



For VIJAY SEHGAL & CO.,

Chartered Accountants

Firm''s Regn. no.: 000374n



CA. S.V.SEHGAL

place : NOIDA partner

Dated : 30th May, 2014 Membership no. 080329


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fi nancial statements of UFLEX LIMITED. ("The Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profi t and Loss and the Cash Flow Statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash Flows of the Company in accordance with the accounting principles generally accepted in India including 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 fi nancial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fi nancial 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 fi nancial 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 fi nancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid fi nancial 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 Profi t & Loss, of the Profi t of the Company for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash fl ows of the Company for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

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

1. In respect of fi xed assets of the Company: -

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

(b) As explained to us, fi xed assets have been

physically verifi ed by the management at reasonable intervals, having regard to the size of the company and nature of its assets and no material discrepancies were noticed on such physical verifi cation.

(c) Substantial part of fi xed assets has not been disposed off during the year.

2. In respect of inventories of the Company: -

(a) The inventories have been physically verifi ed during the year by the management, at reasonable intervals.

(b) In our opinion, the procedures of physical verifi cation of inventory followed by the management are reasonable and adequate, in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on physical verifi cation of inventory as compared to book records were not signifi cant and were properly dealt with in the books of account.

3. In respect of Loans, secured or unsecured, granted or taken by the company to/from companies, fi rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

a) The Company has not given any loan during the year to Companies, fi rms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) During the year, the Company has taken interest bearing unsecured loans aggregating to Rs. 8060.00 Lacs, from ten companies, covered in the register maintained under Section 301 of the Companies Act, 1956, which were repaid before the date of the Balance Sheet. Further the company has paid the principle and interest on time. In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of these loans, were not prima-facie prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system, commensurate with the size of the company and the nature of its business, for the purchase of inventory and fi xed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

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

b) In our opinion and according to the information and explanations given to us, 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 Royalty paid to one of the party, as comparable prices could not be ascertained, we are unable to comment whether the transactions were made at prevailing market prices at relevant times.

6. The Company has not accepted any deposit, during the year, under the provisions of Section 58A & 58AA of the Companies Act, 1956 and the rules framed thereunder.

7. The internal audit of the Company has been conducted by an independent fi rm of Chartered Accountants and 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 cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed records have been made and maintained.

9. In respect of Statutory dues:

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess and other applicable statutory dues have been generally deposited regularly with the appropriate authorities.

b) According to the information and explanations given to us, there are no dues of custom duty, wealth tax and cess, which have not been deposited on account of any dispute. However following amounts are involved (Gross of amount deposited under protest, if any) with under- mentioned forums, in respect of the disputed statutory dues: -

(i) Aggregate Sales Tax of Rs. 204.63 lacs, pending before (a) Gwalior High Court (Rs. 152.89 lacs), (b) Tribunal (Rs. 41.61 lacs) & (c) Assessing Authorities (Rs. 10.13 lacs).

(ii) Income Tax of Rs. 480.71 Lacs, pending before (a) Delhi High Court (Rs. 145.51 lacs) & (b) CIT (Appeals) (Rs. 335.20 lacs)

(iii) Aggregate Excise duty of Rs. 4592.54 lacs, pending before (a) Supreme Court

(Rs. 135.56 lacs), (b) Various High Courts (Rs. 72.56 lacs), (c) Tribunal (Rs. 1494.72 Lacs) (d) Commissioner (Appeals) (Rs. 2838.26 lacs) & (e) Assessing Authorities (Rs. 51.44 lacs).

(iv) Aggregate Service Tax of Rs. 1791.66 lacs, pending before (a) Tribunal (Rs. 1573.76 lacs), (b) Commissioner (Appeals) (Rs. 54.86 lacs) & (c) Assessing Authorities (Rs. 163.04 lacs).

10. The Company has neither accumulated losses as at the year end nor it has incurred cash losses in the fi nancial year under report and in the immediately preceding fi nancial year.

11. Based on the audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to fi nancial institutions or banks or debenture holders.

12. The Company has not granted loans and advances during the year, on the basis of security by way of pledge of shares, debentures and other securities. However the Company has maintained adequate records in respect of advance, by way of security deposit, granted to one party, in earlier years and outstanding as at the year-end, against the pledge of shares.

13. The Company is not a chit fund, nidhi or mutual benefi t fund/society. Therefore the provisions of clause 4(xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

14. The Company has not dealt or traded in shares, securities, debentures and other investments during the year. However, it has maintained proper records in respect of shares, investments in mutual funds and other investments and are held in the name of the Company.

15. According to the information and explanations given to us, and the records examined by us, the Company has given corporate guarantees to banks for loans taken by its foreign subsidiaries and foreign step down subsidiaries; however in our opinion the terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

16. To the best of our knowledge & belief and according to the information and explanations given to us and the records of the company examined by us, the term loans availed by the Company during the year, have been applied for the purposes for which 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 not been used for long-term investment.

18. During the year, company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. As the Company has neither issued debentures during the year nor have any outstanding balance in respect of debentures, as at year-end, hence provision of clause 4(xix) of the Companies (Auditors'' Report) Order, 2003 is not applicable to the Company.

20. The Company has not raised any money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For VIJAY SEHGAL & CO.,

Chartered Accountants

Firm Regn. No.: 000374N CA. S.V.SEHGAL

Place : NOIDA Partner

Dated : 30th May, 2013 Membership No. 080329


Mar 31, 2012

1. We have audited the attached Balance Sheet of UFLEX LIMITED as at 31st March, 2012, the Statement of Profit & Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. 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. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our opinion, we draw attention to the statement attached to the Balance Sheet and Statement of Profit & Loss, u/s 215(2) of the Companies Act, 1956, regarding inability of the Managing Director to sign these Financial Statements, owing to his non-presence, within the territory of India.

5. Further to our comments in the Annexure referred to in paragraph (03) above, we report that:

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

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

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

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

(v) On the basis of written representations received from the directors, as on 31st March, 2012, and taken on record by the Board of Directors, we report that none of directors are disqualified as at 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; and

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts read with Significant Accounting Policies and 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 of the Company for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS' REPORT OF UFLEX LIMITED FOR THE YEAR ENDED 31st MARCH 2012 [Referred to in Paragraph (03) of our Report of even date]

1. In respect of fixed assets of the Company: -

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

(b) The Fixed assets have been physically verified by the management at reasonable intervals and no material discrepancy has been noticed on such verification.

(c) Substantial part of fixed assets have not been disposed off during the year.

2. In respect of inventories of the Company: -

(a) Inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate, in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not significant and were properly dealt with in the books of account.

3. (a) The company has not given any loan during the year, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) During the year, the Company has taken unsecured loan of Rs. 250.00 Lacs, from a company, covered in the register maintained under Section 301 of the Companies Act, 1956, which was repaid before the date of the Balance Sheet. The Rate of interest and other terms and conditions of this loan was not prima-facie prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there is 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. During the course of our audit, no major weakness has been noticed in the internal control system.

5. (a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, have been 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 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 each party during the year, have been made at prices, which are reasonable having regard to prevailing market prices at the relevant time and in respect of Patent acquired, as comparable prices can not be ascertained, we are unable to comment whether the transaction was made at prevailing market prices at the relevant time.

6. The Company has not accepted any deposit, during the year, under the provisions of Section 58A & 58AA of the Companies Act, 1956 and the rules framed there- under.

7. The internal audit of the Company has been conducted by an independent firm of Chartered Accountants and 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 cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed records have been maintained.

9. (a) According to the records of the Company, undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other applicable statutory dues have been generally deposited regularly with the appropriate authorities.

(b) According to the information and explanation given to us, there are no dues of, custom duty, wealth tax and cess, which have not been deposited on account of any dispute. However following amounts are involved (Gross of amount deposited under protest, if any) with under-mentioned forums, in respect of the disputed statutory dues: -

(i) Aggregate Sales Tax of Rs. 377.72 lacs, pending before (a) Various High Courts (Rs. 322.38 lacs), (b) Tribunal (Rs. 41.61 lacs), (c) Commissioner (Appeals) (Rs.0.69 lacs) & (d) Assessing Authorities (Rs. 13.04 lacs).

(ii) Income Tax of Rs. 371.35 Lacs, pending before (a) Delhi High Court (Rs. 145.51 lacs) & (b) CIT (Appeals) (Rs. 225.84 lacs)

(iii) Aggregate Excise duty of Rs. 3407.22 lacs, pending before (a) Supreme Court (Rs. 143.29 lacs), (b) Various High Courts (Rs.88.62 lacs), (c) Tribunal (Rs. 1494.72 Lacs) (d) Commissioners (Appeals) (Rs. 971.57 lacs) & (e) Assessing Authorities ( Rs. 709.02 lacs).

(iv) Aggregate Service Tax of Rs. 1963.36 lacs, pending before (a) Allahabad High Court (Rs. 92.50 Lacs), (b) Tribunal (Rs. 1665.25 lacs), (c) Commissioner (Appeals) (Rs. 73.15 lacs) & (e) Assessing Authorities (Rs. 132.46 lacs).

10. The Company has neither accumulated losses as at the year end nor it has incurred cash losses in the financial year under report and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks or debenture holders or financial institutions.

12. The Company has not granted loans and advances during the year, on the basis of security by way of pledge of shares, debentures and other securities. However the Company has maintained adequate records in respect of advance, by way of security deposit, granted to one party, in earlier years and outstanding as at the year-end, against the pledge of shares.

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

14. The Company has not dealt or traded in shares, securities, debentures and other investments during the year. However, it has maintained proper records in respect of shares, investments in mutual funds and other investments and are held in the name of the Company.

15. According to the information and explanations given to us, and the records examined by us, the Company has given guarantees for loans taken by its Subsidiary and step down subsidiaries from banks, however in our opinion the terms and condition thereof are not prima- facie prejudicial to the interest of the Company.

16. To the best of our knowledge & belief and according to the information and explanations given to us and the

records of the company examined by us, the term loan availed by the Company during the year, has been applied for the purposes for which loan was 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 not been used for long-term investment.

18. During the year, company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. As the Company has neither issued debentures during the year nor have any outstanding balance in respect of debentures as at year end, hence provision of clause 4(xix) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

20. The Company has not raised any money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For VIJAY SEHGAL & CO.,

Chartered Accountants Firm Regn. No.: 000374N

CA. S.V.SEHGAL

Place: NOIDA Partner

Dated : 11th July, 2012 Membership No. 080329


Mar 31, 2011

1. We have audited the attached Balance Sheet of UFLEX LIMITED as at 31st March, 2011, the Profit & Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These fi nancial 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 fi nancial 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 the 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 (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in paragraph (03) above, we report that:

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

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

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

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

(v) On the basis of written representations received from the directors, as on 31st March, 2011, and taken on record by the Board of Directors, we report that none of directors are disqualified as at 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; and

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts read with Significant Accounting Policies and 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, 2011;

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

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

ANNEXURE TO THE AUDITORS' REPORT OF UFLEX LIMITED FOR THE YEAR ENDED 31st MARCH 2011

[Referred to in Paragraph (03) of our Report of even date]

1. In respect of fixed assets of the Company: -

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

(b) The Fixed assets have been physically verified by the management at reasonable intervals and no material discrepancy has been noticed on such verification.

(c) Substantial part of fixed assets have not been disposed off during the year.

2. In respect of inventories of the Company: -

(a) Inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate, in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not significant and were properly dealt with in the books of account.

3. (a) The company has not given any loan during the

year, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) During the year, the Company has taken aggregate unsecured loans of Rs. 800.00 Lacs, from two companies, covered in the register maintained under Section 301 of the Companies Act, 1956, which were repaid before the date of the Balance Sheet. The Rate of interest (as applicable in one of the case) and other terms and conditions of these loans were prima facie not prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there is 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. During the course of our audit, no major weakness has been noticed in the internal control system.

5. (a) According to the information and explanations given

to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956,

have been 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 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 a party, during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposit, during the year, under the provisions of Section 58A & 58AA of the Companies Act, 1956 and the rules framed there-under.

7. The internal audit of the Company has been conducted by an independent firm of Chartered Accountants and in our opinion, the company has an internal audit system, commensurate with the size and nature of its business.

8. The Company has made and maintained Cost Records & Accounts, concerning polyester chips activity carried on by the Company, in respect of which, the Central Government has prescribed the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956.

9. (a) According to the records of the Company, it is regular

in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other applicable statutory dues.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other applicable statutory dues, as at the year end; for a period more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of Service tax, Custom duty, Wealth tax and Cess, which have not been deposited on account of any dispute. However following amounts are involved (Gross of amount deposited under protest, if any) with under-mentioned forums, in respect of the disputed statutory dues: -

(i) Aggregate Sales Tax of Rs. 324.93 lacs, pending before (a) Various High Courts (Rs. 152.88 lacs) (b) Tribunal (Rs. 41.61 lacs) (c) Joint Commissioner (Appeals) (Rs. 0.90 lacs) (d) Commissioner (Appeals) (Rs.2.50 lacs) & (e) Assessing Authorities (Rs. 127.04 lacs)

(ii) Income Tax of Rs. 295.04 Lacs, pending before CIT (Appeals).

(iii) Aggregate Excise duty of Rs. 5183.56 lacs, pending before (a) Supreme Court (Rs. 150.53 lacs) (b) Tribunal (Rs. 3013.66 Lacs) (c) Various High Courts (Rs.1147.92 lacs), (d) Commissioner (Appeals) (Rs. 7.56 lacs) & (e) Assessing/ Adjudicating Authorities (Rs. 863.89 lacs).

10. The Company has neither accumulated losses as at the year end nor it has incurred cash losses in the financial

year under report and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks or debenture holders or financial institutions.

12. The Company has not granted loans and advances, on the basis of security by way of pledge of shares, debentures and other securities. However the Company has maintained adequate records in respect of advance, by way of security deposit, granted to one party, in earlier years and outstanding as at the year-end, against the pledge of shares.

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

14. The Company has not dealt or traded in shares, securities, debentures and other investments during the year. However, it has maintained proper records in respect of shares, investments in mutual funds and other investments and are held in the name of the Company.

15. According to the information and explanations given to us, and the records examined by us, the Company has given guarantees for loans taken by its Subsidiary and step down subsidiaries from banks. However, in our opinion the terms and condition thereof are not prima facie prejudicial to the interest of the Company.

16. To the best of our knowledge & belief and according to the information and explanations given to us and the records of the company examined by us, the term loans availed by the Company during the year have been applied for the purposes for which loan 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 not been used for long-term investment.

18. The Company has allotted 1,35,00,000 Warrants convertible into equal number of Equity Shares of face value of Rs.10/- each, at a premium of Rs.290/- per equity share to the companies covered in the register maintained under section 301 of the Companies Act, 1956, out of which 35,00,000 warrants were converted into equal number of equity shares by one company, before the date of the Balance Sheet. In our opinion, the price at which these shares/ warrants have been issued is not prima facie prejudicial to the interest of the Company.

19. As the Company has neither issued debentures during the year nor have any outstanding balance in respect of debentures as at year end, hence provision of clause 4(xix) of the Companies (Auditor's Report) Order, 2003 is not applicable to the Company. The Company has not raised any money by public issue during the year.

20. The Company has not raised any money by Public Issue during the year

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For VIJAY SEHGAL & CO., Chartered Accountants Firm Regn. No.: 000374N

CA. S.V.SEHGAL Place : NOIDA Partner Dated : 4th August, 2011 Membership No. 080329


Mar 31, 2010

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

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

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

4. Further to our comments in the Annexure referred to in paragraph (03) above, we report that

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

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

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

(iv). In our opinion, the Balance Sheet, Profit 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;

(v). On the basis of written representations 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 at 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; and

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts read with Significant Accounting Policies and 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, 2010;

b. in the case of the Profit and Loss Account, of the Profit of the Company for the year ended on that date; and

c. in the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date

ANNEXURE TO THE AUDITORS REPORT OF UFLEX LIMITED FOR THE YEAR ENDED 31st MARCH 2010 [Referred to in Paragraph (03) of our Report of even date]

1. In respect of fixed assets of the Company: -

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

(b) The Fixed assets have been physically verified by the management at reasonable intervals and no material discrepancy has been noticed on such verification.

(c) Substantial part of the fixed assets have not been disposed off during the year.

2. In respect of inventories of the Company: -

(a) Inventories were physically verified during the year by the management at reasonable intervals.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate, in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not significant and were properly dealt with in the books of account.

3. (a) In respect of interest bearing secured loan of Rs. 5300.82 Lacs, given to a company covered in the register maintained under Section 301 of the Companies Act, 1956, the full repayment, along- with interest was received, as per the revised terms entered between the parties during the year, which was not prima-facie, prejudicial to the interest of the Company. (b) During the year, the Company has taken aggregate interest-free unsecured loans of Rs. 8800 lacs from three companies, covered in the register maintained under Section 301 of the Companies Act, 1956, each having tenure of one year (with pre-payment option resting with the Company). The terms and conditions of these loans were prima- facie not prejudicial to the interest of the Company. Principal amount and interest (in respect of a loan taken in the past) were repaid regularly, as per the terms/ pre-payment option, to the concerned parties.

4. In our opinion and according to the information and explanations given to us, there is 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. During the course of our audit, no major weakness has been noticed in the internal control system.

5. (a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956, have been 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 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 Rs. Five Lacs in respect of a party, during the year, have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposit, during the year, under the provisions of Section 58A & 58AA of the Companies Act, 1956 and the rules framed there- under.

7. The internal audit of the Company has been conducted by an independent firm of Chartered Accountants and in our opinion, the company has an internal audit system, commensurate with the size and nature of its business.

8. The Company has made and maintained Cost Records & Accounts, concerning polyester chips activity carried on by the Company, in respect of which, the Central Government has prescribed the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956.

9. (a) According to the records of the Company, it is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other applicable statutory dues.

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

(c) According to the information and explanation given to us, there are no dues of custom duty, wealth tax and cess, which have not been deposited on account of any dispute. However following amounts are involved (Gross of amount deposited under protest, if any) with under-mentioned forums, in respect of the disputed statutory dues: -

(i) Aggregate Sales Tax of RS.538.59 lacs, pending before (a) Various High Courts (Rs. 232.88 lacs) (b) Tribunal (Rs. 41.60 lacs) (c) Joint Commissioner (Appeals) (Rs. 0.90 lacs) & (d) Assessing Authorities (Rs.263.21 lacs)

(ii) Income Tax of Rs. 38.82 Lacs, pending before CIT(Appeals).

(iii) Aggregate Excise duty / Service Tax of Rs. 5426.02 lacs, pending before (a) Supreme Court (Rs. 15.71 lacs) (b) Various High Courts (Rs.1330.41 lacs) (c) Tribunal (Rs. 3054.10 lacs) (d) Commissioner (Appeals) (Rs.244.48 lacs) & (e) Assessing / original adjudicating Authorities (Rs. 781.32 Lacs).

10. The Company has neither accumulated losses as at the year end nor it has incurred cash losses in the financial year under report and in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks or debenture holders or financial institutions.

12. The Company has not granted loans and advances, on the basis of security by way of pledge of shares, debentures and other securities. However the Company has maintained adequate records in respect of advance, by way of security deposit, granted to one party, in earlier years and outstanding as at the year-end, against the pledge of shares.

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

14. The Company has not dealt or traded in shares, securities, debentures and other investments during the year. However, it has maintained proper records in respect of shares, investment in mutual funds and other investments and are held in the name of the Company.

15. According to the information and explanations given to us and the records examined by us, the Company has given guarantees for loans taken by its subsidiary and step down subsidiaries from banks, however, in our opinion the terms and conditions thereof are not prima-facie prejudicial to the interest of the Company.

16. To the best of our knowledge & belief and according to the information and explanations given to us and the records of the Company examined by us, the term loans availed by the Company during the year have been applied for the purposes for which the 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 not been used for long-term investment.

18. During the year, the Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

19. Security and Charges were created in respect of debentures outstanding as at the year end.

20. The Company has not raised any money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the Company was noticed or reported during the year.

For VIJAY SEHGAL & CO., Chartered Accountants

Firm Regn. No.: 000374N

Place : NOIDA CA. S.V. SEHGAL

Dated : 15th July, 2010 Partner

Membership No. 080329

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