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Auditor Report of Vardhman Acrylics Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Vardhman Acrylics Limited ("the Company") which comprises the Balance Sheet as at 31 st March, 2015, the Statement of Profit and Loss, 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

The Company's Board of Directors is responsible for the matters stated in S.134 (5) of the Companies Act, 201 3 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 1 33 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 fraud and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are responsible and prudent; and design and implementation, and maintenance of adequate internal controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditor's Responsibility

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

We have taken into account the provisions of the Act, the accounting arid auditing standards and the 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 disclosures in the financial statements.The procedures selected depend on the auditor's judgment, including the assessment of the risks of the 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 financial statement that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. 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 financial statements.

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, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss, and the cash flow statement dealt with by this report are in agreement with the books of account;

(d) In our opinion, the aforesaid financial statements comply with accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representations received from the directors as on 31st March 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2015, from being appointed as director in terms of Section 164 (2) of the Act; (

(f) With respect to the other matters to be included, in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to best-of our information and accordingly explanations given to us;

i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 1 6A to the financial statements;

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

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

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

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records, which were not material, have been properly adjusted in the books of account.

(ii) (a) As explained to us,physical verification has been conducted by management at reasonable intervals in respect of finished goods, stores and spares and spares parts and raw material, Further, stock in the possession and custody of third parties and stock in transit as at 31st March, 2015 has been verified by the management with reference to confirmation and statement of accounts or correspondence with the third party or subsequent receipt of goods. In our opinion, the frequency of such verification is reasonable.

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

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) The company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. Accordingly clauses 3(iii) (a) & (b) of the order are not applicable.

(iv) In our opinion and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets, are for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have been informed of any instance of a continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) In our Opinion and according to the information and explanation given to us, the Company has not accepted any deposits from the public as per directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant section of the Companies Act and the rules framed thereunder.

(vi) We have broadly reviewed the cost accounting records maintained by the Company pursuant to 'The Companies (Cost Records and Audit) Rule, 2014', as notified by notification no. 425 (E) dated 30th June, 2014 of Ministry of Corporate Affairs, Government of India under section 148 of the Companies Act, 2013. We are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained by Company. We are, however, not required to make a detailed examination of such books and records.

(vii) (a) In our opinion and according to the information and explanations given to us and according to the records of the Company, undisputed statutory dues including Provident Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Custom duty, Excise duty, Cess and other material statutory dues, wherever applicable, have been regularly deposited with the appropriate authorities and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2015.

(b) According to the records of the company examined by us and the information and explanations given to us, there are no dues of income tax, value added tax, sales tax,Custom Duty,wealth tax,Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute,except the following in respect of disputed Excise duty, Sates tax, income tax :

Nature of Nature Forum where Statue of Due Dispute is Pending

The Central Cenvat CESTAT, Ahmedabad Excise and Credit Salt Act, 1944

Income Tax Income Tax CIT (Appeals) Act, 1961

Income Tax Income Tax CIT(Appeals) Act, 1961

Income Tax Income Tax CIT(Appeals) Act, 1961

The Cujarat VAT & CST Joint Commissioner VAT Tax of Commercial Tax Act, 2003 Appeal-2 Vadodara

The Gujarat VAT & CST Gujarat Value VAT Tax Added Tax Tribunal Act, 2003 Ahmedabad

The Gujarat VAT & CST Joint Commissioner VAT Tax of Commercial Tax Act, 2003 Appeal-2 Vadodara

Nature of Statue Amount Period to (In lacs) which the amount relates

The Central Excise and Salt Act, 1944 1.17 2006-10

Income Tax Act, 1961 186.13 Assessment Year 2007-08

Income Tax Act, 1961 274.68 Assessment Year 2010-11

Income Tax Act, 1961 132.00 Assessment Year 2011-12

The Gujarat VAT Tax Act, 2003 178.16 2009-10

The Gujarat VAT Tax Act, 2003 112.54 2008-09

The Gujarat VAT Tax Act, 2003 27.74 2007-08

c) Company does not have any amount which is required to be transferred to Investor Education and Protection Fund in accordance with relevant provisions of Companies Act, 1956 and rules made thereunder.

(viii) The Company does not have any accumulated losses as at the end of the financial year. There are no cash losses during the financial year under report and in the immediately preceding financial year.

(ix) According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institutions or banks and debenture holder. '

(x) According to the information and explanations given to us, the Company has given a counter guarantee of Rs. 232.90 Lacs in favor of Gujarat Industrial Development Corporation (GIDC) in relation to the corporate guarantee provided by GIDC for availment of term loans by Bharuch ECO- Aqua Infrastructure Limited, the terms and Condition whereof are not, prima facie, prejudicial to the interest of the company.

(xi) As per the information and explanations given to us and on the basis of our examination of the records, in our opinion, the term loans taken by the Company have been applied for the purpose for which the said loans were obtained, whenever such end use has been stipulated by lender(s).

(xii) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed and reported during the year, nor have we been informed of such case by the management

For S.S. Kothari Mehta & Co.

Chartered Accounts Firm's Registration No.- 000756N

(Kamal Kishore)

Place: New Delhi Partner

Date : May 04, 2015 Membership No. 078017




Mar 31, 2014

We have audited the accompanying Financial Statements of Vardhman Acrylics Limited ("the Company") which comprises the Balance Sheet as at 31st March, 2014,and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and Notes to the Financial Statements comprising of a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the act") read with the General Circular 15/ 2013 dated 13 September 2013 of the Ministry of corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation, and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditor''s Responsibility

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 the material misstatement of the financial statements, whether due to error or fraud. 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 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 said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

ii) In the case of Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order;

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

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

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

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e. On the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year.Discrepancies noticed on such verification as compared to book records, which were not material, have been properly adjusted in the books of account.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) As explained to us, physical verification has been conducted

by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stocks in the possession and custody of third parties and stock in transit as at 31st March, 2014 has been verified by the management with reference to confirmation and statement of account or correspondence with the third parties or subsequent receipt of goods. In our opinion, the frequency of such verification is reasonable.

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

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loan, secured or unsecured,

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

(b) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

(c) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(d) Since there are no such loans, comments regarding terms and conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

4. In our opinion and according to the information and explanations given to us during the course of audit, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of major weaknesses in the aforesaid internal control systems.

5. (a) Based on the audit procedures applied by us and according

to the information and explanations provided by the management, there are no transactions which are required to be entered into the register maintained under section 301 of the Companies Act, 1956.

(b) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that there are no transactions made in pursuance of contracts or arrangements required to be entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of five lacs rupees in respect of each party during the year.

6. In our opinion and according to information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Section 58A and Section 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed thereunder.

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

8. We have broadly reviewed the cost accounting records maintained by the Company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of such books and records.

9. (a) In our opinion and according to the information and

explanations given to us and 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 material statutory dues, wherever applicable, have been regularly deposited with the appropriate authorities during the year and there are no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2014.

(b) According to the records of the Company examined by us and the information and explanations given to us, there are no dues of Sales tax, Income tax, Custom duty, Wealth tax, Service tax, Excise dutyand Cess which have not been deposited on account of any dispute, except the following in respect of disputed Excise duty, Sales tax:

Nature of Statute Nature of Due Amount (Rs. In Lacs)

The Central Excise Cenvat Credit 1.16 and Salt Act, 1944

The Gujarat Vat Interest on sales 27.74 Tax Act, 2003 Tax demand

The Gujarat Vat VAT & CST 112.54 Tax Act, 2003

The Gujarat Vat VAT & CST 267.93 Tax Act, 2003

Income Tax Income Tax 22.56 Act, 1961

Income Tax Income Tax 184.00 Act, 1961

Nature of Statute Forum where Period Dispute is Pending

The Central Excise CESTAT, 2006-10 and Salt Act 1944 Ahmedabad

The Gujarat Vat Joint Commissioner 2007-08 Tax Act 2003 of Commercial Tax Appeals 2 Vadodara

The Gujarat Vat Joint Commissioner 2008-09 TAx ACt 2003 of Commercial Tax Appeals 2 Vadodara

The Gujarat Vat Joint Commissioner 2009-10 Tax Act 2003 of Commercial Tax Appeals 2 Vadodara (Company is in process to file the appeal)

Income tax Act 1961 CIT (Appeals) AY 2011-12

Income Tax Act 1961 CIT (Appeals) AY 2006-07

10. The Company does not have accumulated losses as at the end of the financial year. There are no cash losses during the financial year and in the immediately preceding financial year.

11. According to the information and explanations given to us and as per the books and records examined by us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company does not fall within the category of Chit fund/Nidhi/ Mutual Benefit fund/Society and hence the related reporting requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

15. According to the information and explanation given to us, the Company has given a counter guarantee of Rs. 232.90 lacs in favor of Gujarat Industrial Development Corporation (GIDC) in relation to the corporate guarantee provided by GIDC for availment of term loans by Bharuch Eco-AquaInfrastructure Limited, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, there is no term loan taken by the Company during the year.

17. According to the information and explanations given to us and as per the books and records examined by us, on an overall examination of the balance sheet of the Company, the funds raised by the Company on short-term basis have not been applied for long- term investment.

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

19. According to the information and explanations given to us and on the basis of records examined by us, the Company has not issued any debentures.

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

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

For S.S. Kothari Mehta & Co. Chartered Accountant Firm Registration No. 000756N

Kamal Kishore Place: New Delhi Partner Date: 19th May, 2014 Membership No. 078017


Mar 31, 2013

Report On the Financial Statements

We have audited the accompanying Financial Statements of Vardhman Acrylics Limited ("the Company") which comprises the Balance Sheet as at 31st March, 2013 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and Notes to the Financial Statements comprising of a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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 the material misstatement of the financial statements, whether due to error or fraud. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and 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 said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

ii) In the case of Statement of Profit and Loss, of the profit of the Company for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (''the Order'') issued by the Central Government of India in terms of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order;

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

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

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

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

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

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

ANNEXURE TO THE AUDITORS'' REPORT

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

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

(b) The Company has a phased programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. As part of this programme, the management has physically verified certain fixed assets during the year. Discrepancies noticed on such verification as compared to book records were not material, and have been properly adjusted in the books of account.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stocks in the possession and custody of third parties and stock in transit as at 31 st March, 2013 have been verified by the management with reference to confirmation of statement of account or correspondence with the third parties or subsequent receipts of goods. In ouropinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are, in our opinion, reasonable and adequate in relation to the size of the Company and the nature of ts business.

(c) In our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

; (b) Since there are no such loans, comments regarding terms & conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

(c) The Company has not taken any loans, secured or unsecured, from companies, firms or other partes listed in the register maintained under section 301 of the Companies Act, 1956.

(d) Since there are no such loans, comments regarding terms & conditions, repayment of the principal amount, interest due thereon and overdue amounts are not required.

4. In our opinion and according to the information & explanations given to us during the course of audit, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of a major weakness in the aforesaid internal control systems.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, there are no transactions which are required to be entered into the register maintained under section 301 of the Companies Act, 1956.

(b) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that, there are no transactions made in pursuance of contracts or arrangements required to be entered in the register maintained under section 301 of the Companies Act,1956 and exceeding the value of five lacs rupees in respect of each party during the year.

6. In our opinion and according to information and explanations given to us, the Company has not accepted any deposits within the meaning of Section 58A, 58AA or any relevant provision of Companies Act, 1956 and rules framed there under.

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

8. We have broadly reviewed the cost accounting 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, 1956and are of the opinion that, prima facie, the prescribed records have been made & maintained. We are, however, not required to carry out a detailed examination of the same.

9. (a) In our opinion and according to the information and explanations given to us and 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 material statutory dues, wherever applicable, have been regularly deposited with the appropriate authorities during the year and there are no such undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31 st March, 2013.

10. The Company does not have accumulated losses as at the end of defaulted in repayment of dues to any financial institution or bank

requirements of the Order are not applicable.

14. According to the information and explanations given to us, the Company is not dealing or tradine t in snaresd securities, debentures

sasESKSsr MM "¦"*g requirements

15. According to the information and explanations given to us, the Company has given a counter guarantee of Rs. 232.90 lacs in favour

17. According to the information and explanations given to us and as Company on short-term basis have not been applied for long-term section 301 of the Companies Act, 1956.

20. The Company has not raised any money by way of public issue during the years. year, nor have we been informed of such case by the management.

For S.S.KOTHARI MEHTA & COMPANY

Chartered Accountants

Firm Registration No. 000756N

Kamal Kishore

Dated: May 28, 2013 Partner

Place: New Delhi Membership No. 078017


Mar 31, 2012

1. We have audited the attached balance sheet of VARDHMAN ACRYLICS LIMITED ("the Company"), as at 31st March, 2012, the statement of profit and loss and 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 {as amended by the Companies(Auditors' Report) (Amendment) Order 2004} issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, 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 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, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account;

(iv) In our opinion, the balance sheet, statement of profit and loss and cash flow statement dealt with by this report comply with the accounting standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956;

(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 the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub-section(1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 and loss, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS' REPORT

Referred to in paragraph 3 of our report of even date,

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

2. All the assets have been physically verified by the management during the year in terms of a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

3. In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

4. As explained to us, physical verification has been conducted by the management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stock in the possession and custody of third parties and stock in transit as at 31st March,2012 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of verification is reasonable.

5. In our opinion and according to the information and explanations given to us, 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.

6. On the basis of our examination of the records of inventory, in our opinion, the Company has maintained proper records of inventory and as explained to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

7. According to the records of the company examined by us and the information and explanations given to us, the company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, clauses (iii)(a)to (iii))(g) of paragraph 4 of CARO are not applicable.

8. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of a continuing failure to correct major weaknesses in the aforesaid internal control systems.

9. Based on the audit procedures applied by us and according to the information and explanations provided by the management, there are no transactions which are required to be entered into the register maintained under section 301 of the Companies Act, 1956.

10. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that, there are no transactions made in pursuance of contracts or arrangements required to be entered in the register maintained under section 301 of the Companies Act,1956 and exceeding the value of five lacs rupees in respect of each party during the year.

11. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed thereunder.

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

13. We have broadly reviewed the cost records maintained by the Company pursuant to' The Companies (Cost Accounting Records) Rules 2011' as notified by notification no. GSR 429(E) dated 3 June 2011 of Ministry of Corporate Affairs, Government of India under section 209(1)(d) of the Companies Act, 1956. We are of the opinion that, prima facie, the prescribed records have been made and maintained by the Company. We are, however, not required to make a detailed examination of such records.

14. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income-tax, sales-tax, wealth-tax, customs duty, excise duty, cess and other statutory dues applicable to it.

15. According to the records of the Company examined by us and the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, sales tax, customs duty and excise duty were outstanding, as at 31st March, 2012 for a period of more than six months from the date they became payable.

16. According to the records of the Company examined by us and the information and explanations given to us, there are no dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of any dispute, other than the following: - Name of Nature of dues Amount due Forum Period statute (Rs.) where pending

The Gujarat Purchase/Sales 43,27,734/- Joint 2006-2007, Sales Tax Tax on fuel Commissioner 2007-2008 Act,1969 Of Sales Tax- Vadodara

The Central Cenvat Credit 12,61,595/- CESTAT - 2005-2006 Excise Act, Ahmedabad 2007-2008, 1944 2008-2009, 2009-2010

The Gujarat Interest on Sales 27,73,983/- Joint 2007-2008 Sales Tax Tax Demand Commissioner Act,1969 Of Sales Tax- Vadodara

17. The Company does not have accumulated losses as at the close of the financial year. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

18. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of dues to banks and debenture holders.

19. According to the information and explanation given to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures or other securities.

20. The Company does not fall within the category of Chit Fund, Nidhi Fund or Mutual Benefit Fund/Societies and hence the related reporting requirements of the order are not applicable.

21. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

22. According to the information and explanations given to us, the Company has given a counter guarantee of Rs. 2,32,90,000 lacs in favour of Gujarat Industrial Development Corporation (GIDC) in relation to the corporate guarantee provided by GIDC for availment of term loans by Bharuch Eco-Aqua Infrastructure Limited, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

23. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, there are no term loans taken by the Company during the year.

24. According to the information and explanations given to us and on the basis of an overall examination of the balance sheet of the Company, in our opinion, generally, there are no funds raised by the Company on short-term basis, which have been used for long-term investment.

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

26. During the period covered by our audit report, the Company has not issued any debentures.

27. During the period covered by our audit report, the Company has not raised any money by public issue.

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

For S.S. Kothari Mehta & Co.

Chartered Accountants

Firm Registration No.: 000756N

(CA Kamal Kishore)

Place : New Delhi Partner

Dated : 9th May, 2012 Membership No.: 078017


Mar 31, 2011

1. We have audited the attached balance sheet of VARDHMAN ACRYLICS LIMITED ("the Company"), as at 31st March, 2011, the profit and loss account and 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 (as amended by Companies (Auditors' Report) (Amendment) Order, 2004) issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, 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 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) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 31 st March, 2011;

(b) in the case of the profit and loss account, of the profit for the year ended on that date; and

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

(vi) 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 the directors is disqualified as on 31 st 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.

ANNEXURE TO THE AUDITORS' REPORT Referred to in paragraph 3 of our report of even date,

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

2. All the assets have been physically verified by the Management during the year in terms of a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

3. In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

4. As explained to us, physical verification has been conducted by the Management at reasonable intervals in respect of finished goods, stores and spare parts and raw materials. Further, stock in the possession and custody of third parties and stock in transit as at 31 st March, 2011 have been verified by the management with reference to confirmation or statement of account or correspondence with the third parties or subsequent receipts of goods. In our opinion, the frequency of such verification is reasonable.

5. In our opinion and according to the information and explanations given to us, 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.

6. On the basis of our examination of the records of inventory, in our opinion, the Company has maintained proper records of inventory and as explained to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

7. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. Consequently, clauses (iii)(a) to (iii)(g) of paragraph 4 of CARO are not applicable.

8. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of

inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of a continuing failure to correct major weaknesses in the aforesaid internal control system.

9. Based on the audit procedures applied by us and according to the information and explanations given to us by the Management, there are no transactions which are required to be entered in the register maintained under Section 301 of the Companies Act, 1956.

10. Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that, there are no transactions made in pursuance of contracts or arrangements required to be entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of five lacs rupees in respect of each party during the year.

11. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed thereunder.

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

13. According to the information and explanation given to us, the Central Government of India has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products manufactured by the Company.

14. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income-tax, sales-tax, wealth-tax, customs duty, excise duty, cess and other statutory dues applicable to it.

15. According to the records of the Company examined by us and the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales-tax, customs duty, and cess were outstanding, as at 31st March, 2011 for a period of more than six months from the date they became payable.

16. According to the records of the Company examined by us and the information and explanations given to us, there are no dues of sales-tax, income-tax, customs duty, wealth-tax, service-tax, excise duty and cess which have not been deposited on account of any dispute, other than the following: -

Sr. Nature of dues Amount due Forum where pending No. (Rs. in lacs)

1. Purchase/Sales 43.28 Joint Commissioner of Tax on fuel Sales Tax-Baroda

2. Cenvat Credit 12.04 CESTAT-Ahmedabad

3. Cenvat Credit 2.34 Commissioner (Appeals)- Surat

17. The Company does not have accumulated losses as at the close of the financial year. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceeding financial year.

18. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of dues to bank and debenture holders.

19. According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

20. The Company does not fall within the category of Chit fund/ Nidhi/Mutual Benefit Fund/Society and hence the related reporting requirements of the Order are not applicable.

21. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments and hence the related reporting requirements of the Order are not applicable.

22. According to the information and explanations given to us, the Company has given a counter guarantee of Rs. 232.90 lacs in favour of Gujarat Industrial Development Corporation (GIDC) in relation to the corporate guarantee provided by GIDC for availment of term loans by Bharuch Eco-Aqua Infrastructure Limited, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

23. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, there are no term loans taken by the Company during the year.

24. According to the information and explanations given to us and on the basis of an overall examination of the balance sheet of the Company, in our opinion, generally, there are no funds raised by the Company on short-term basis, which have been used for long-term investment.

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

26. During the period covered by our audit report, the Company has not issued any debentures.

27. During the period covered by our audit report, the Company has not raised any money by Public Issue.

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

For S.S. Kothari Mehta & Co. Chartered Accountants Firm Registration No.: 000756N

(CA Kamal Kishore) Partner Membership No.: 078017

Place : New Delhi Dated : 9th May, 2011










Mar 31, 2010

1. We have audited the attached balance sheet of VARDHMAN ACRYLICS LIMITED, as at 31st March, 2010, and also the profit and loss account and 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 {as amended by Companies (Auditors Report) (Amendment) Order, 2004} issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, 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 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 on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT Referred to in paragraph 3 of our report of even date,

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

2. All the assets have been physically verified by the Management during the year in terms of a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

3. In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

4. The inventory of the Company has been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable.

5. In our opinion and according to the information and explanations given to us, 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.

6. On the basis of our examination of the records of inventory, in our opinion, the Company has maintained proper records of inventory and as explained to us, the discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

7. We have been informed that there are no loans granted in pursuance of contracts or arrangements that need to be entered into the register maintained under Section 301.

8. We have been informed that there are no loans taken in pursuance of contracts or arrangements that need to be entered into the register maintained under Section 301.

9. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, we have neither come across nor have we been informed of any instance of a continuing failure to correct major weaknesses in the aforesaid internal control procedures.

10. Based on the audit procedures applied by us and according to the information and explanations given to us by the Management, there are no transactions which are required to be entered into the register maintained under Section 301 of the Companies Act, 1956.

11. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits within the meaning of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and rules framed thereunder.

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

13. The Central Government of India has not prescribed the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 for any of the products manufactured by the Company.

14. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, income-tax, sales-tax, wealth-tax, customs duty, excise duty, cess and other statutory dues applicable to it.

15. According to the records of the Company examined by us and the information and explanations given to us, no undisputed amounts payable in respect of income-tax, wealth-tax, sales-tax, customs duty and excise duty were outstanding, as at 31st March, 2010 for a period of more than six months from the date they became payable.

16. According to the records of the Company examined by us and the information and explanations given to us, there are no dues of sales-tax, income-tax, customs duty, wealth-tax, service-tax, excise duty and cess which have not been deposited on account of any dispute, other than the following: -

Sr. Nature of dues Amount due Forum where pending No. (Rs. in lacs)

1. Purchase/Sales 43.28 Joint Commissioner of Tax on fuel Sales Tax-Baroda

2. Cenvat Credit 56.08 CESTAT-Ahmedabad

3. Cenvat Credit 0.69 Commissioner (Appeals)-

Surat

4. Cenvat Credit 9.92 Appeals to be filed

17. The Company does not have accumulated losses as at the close of the financial year. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceeding financial year.

18. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, the Company has not defaulted in repayment of dues to any financial institution or bank during the year.

19. According to the information and explanations given to us, the Company has given a counter guarantee of Rs. 232.90 lacs in favour of Gujarat Industrial Development Corporation (GIDC) in relation to the corporate guarantee provided by GIDC for availment of term loans by Bharuch Eco-Aqua Infrastructure Limited, the terms and conditions whereof are not, prima facie, prejudicial to the interest of the Company.

20. According to the records of the Company examined by us and the information and explanations given to us, in our opinion, there are no term loans taken by the Company during the year.

21. According to the information and explanations given to us and on the basis of an overall examination of the balance sheet of the Company, in our opinion, generally, there are no funds raised by the Company on short-term basis, which have been used for long-term investment.

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

23. During the period covered by our audit report, the Company has not issued any debentures.

24. During the period covered by our audit report, the Company has not raised any money by Public Issue.

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

26. The other provisions of the Order do not appear to be applicable for the year under report.

For S.S. Kothari Mehta & co.

Chartered Accountants

(J. Krishnan)

Place :New Delhi Partner

Dated : 28th April, 2010 Membership No.: 84551



 
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