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Auditor Report of Yuvraaj Hygiene Products Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Yuvraaj Hygiene Products Limited (the 'Company') which comprises of Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and Cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

2. MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The management and Board of Directors of the Company are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the 'Act') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with rule 7 of Companies (Accounts) Rules, 2014. This responsibility includes maintenance of adequate accounting records in accordance with the provision 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; design, implementation and maintenance of adequate internal financial controls, that are operating effectively for ensuring the accuracy and completeness of 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.

3. AUDITOR'S RESPONSIBILITY

a) 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 and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with Standards on Auditing specified under Section 143(10) of the Act. Those standards require that comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

b) An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedure selected depends on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place and 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 management, and Board of Directors, as well as evaluating the overall presentation of the financial statements.

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

4. BASIS FOR QUALIFIED OPINION

a. As per Management's estimate Goodwill has a life of 25 years and accordingly the Company has written off goodwill for 3 years and 3 months in this year's Statement of Profit and loss amounting to Rs. 33.65 lacs, which in our opinion is not in accordance with Accounting Standard prescribed u/s 133 of the Act read with Rule 7 of Companies (Accounts) Rules, 2014. Had Goodwill been written off on a systematic basis (SLM) over a maximum period of 5 years, the Loss would have been understated by Rs. 134.59 lacs and the Reserves and Surplus negative balance would have understated by similar amount.

b. We also draw attention to Note no. 25M to the financial statements relating to Debit or credit balances on whatever account are subject to confirmation from parties / authorities concerned, the impact on financials thereof cannot be ascertained.

5. QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter in paragraph 4a and possible effects of matters in paragraph 4b described in Basis for Qualified Opinion paragraph, 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 its loss and its cash flows for the year ended on that date.

6. REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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 the matters specified in paragraphs 3 and 4 of the said order As required by Section 143(3) of the Act, we further 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) Except for the possible effects of the matter described in the Basis of Qualified Opinion paragraph above, in our opinion, proper books of accounts, as required by law have been kept by the Company, so far as it appears from our examination of the 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) Except for the possible effects of the matter described in the Basis of Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the applicable Accounting standards specified under the 133 of the Act read with the Rule 7 of the Companies (Accounts) Rules 2014.

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

f) In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

* The Company has disclosed the impact of pending litigations as at 31st March, 2015 on its financial position in its financial statements. (Refer note 23 of the Financial Statements);

* The Company did not have any long-term contracts including derivative contracts; as such the question of commenting on any material foreseeable losses thereon does not arise; and

4 There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of delay in transferring such sums does not arise.

Annexure to referred to in paragraph 6 of our report of even date to the members of YUVRAAJ HYGIENE PRODUCTS LIMITED on the accounts of the company for the year ended 31st March, 2015

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that;

i. In respects of the Company's fixed assets:

(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. However the maintenance needs to be improved.

(b) As explained to us, fixed assets have been physically verified by the management at all locations at reasonable intervals. As informed to us no material discrepancies were noticed on such verification.

ii. In respect of the Company inventories:

(a) The inventories have been physically verified during the year at reasonable intervals by the Management.

(b) As explained to us, the procedures of physical verification of inventories 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 inventories. The discrepancies noticed on verification between the physical stocks and 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/from companies, firms or other parties covered in the register maintained under Section 189 of the Act, except unsecured loans from directors and relatives amounting to Rs Rs. 6.79 lakhs

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and the sale of goods. Further on the basis of our examination of the books and records of the Company and according to the information or explanations given to us, no major weakness has not been noticed or reported.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public covered under Section 73 to76 of the Companies Act, 2013 during the period covered by audit.

vi. On the basis of records produced, we are of the opinion that prima facie cost records and accounts prescribed by the Central Government under Section 148(1) of the Act, in respect of products of the Company covered under the rules under said section have been maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

vii. In respect of statutory dues,

(a) According to information and explanation given to us and based on the records of the company examined by us, the company is regular in depositing the undisputed statutory dues, including Income Tax, Sales Tax, Customs Duty, Cess and other statutory dues as applicable, with the appropriate authorities in India; There have been delays in respect of Profession Tax and Income Tax deducted at source. We have been informed that there are no undisputed statutory dues as at the year-end outstanding for a period of more than six months from the date they become payable, except balances dues of income tax self assessment tax of Rs. 449,510/ for AY 2013-14 (including interest till the date of filing the return for the above year).

(b) According to information and explanation given to us and based on the records of the company examined by us, the particulars of dues of sales tax including value added tax, as at 31st March, 2015 which have not been deposited on account of any dispute, are as follows:-

Name of the Nature of the Amount in Rs. Period to which the Statute Dues amount relates (FY)

Central Sales Sales Tax and 250,664 2005-06 Tax Act,1956 Interest

Central Sales Sales Tax and 880,877 2008-09 Tax Act,1956 Interest

Central Sales Sales Tax and 600,360 2009-10 Tax Act,1956 Interest

Central Sales Sales Tax and 3203,613 2010-11 Tax Act,1956 Interest

Central Sales Sales Tax and 380,924 2010-11 Tax Act,1956 Interest

5,316,438

Name of the Forum where the dispute is pending Statute

Central Sales Deputy Commissioner of Sales Tax Act,1956 Tax(Appeals) CBD Belapur, Navi Mumbai

Central Sales Deputy Commissioner of Sales Tax Act,1956 Tax(Appeals) CBD Belapur, Navi Mumbai

Central Sales Deputy Commissioner of Sales Tax Act,1956 Tax(Appeals) CBD Belapur, Navi Mumbai

Central Sales Deputy Commissioner of Sales Tax Act,1956 Tax(Appeals) CBD Belapur, Navi Mumbai

Central Sales Deputy Commissioner of Sales Tax Act,1956 Tax(Appeals) CBD Belapur, Navi Mumbai

(c) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise

viii. The accumulated losses of the company at the end of the financial year are less than fifty percent of its net worth. The Company has incurred cash loss during the financial year covered by our audit but not during the immediately preceding financial year

ix. According to information and explanation given to us and based on the records of the company examined by us, the Company has not defaulted in repayment of dues to Financial Institutions and banks and has not issued any debentures.

x. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loan taken by others from a bank or financial institution during the year

xi. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which it was obtained.

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

For P.P.Jayaraman & Co. Chartered Accountants Firm Registration No. 104139W

P.P.Jayaraman Proprietor Membership No. 041354

Place: Thane Date: 30th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Yuvraaj Hygiene Products Limited (the Company) which comprises of Balance Sheet as at March 31, 2014 and also the Statement of Profit and Loss account and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the Act) read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and General Circular 08/2014 dated April 4,2014 with respect to the Financial Statement and in accordance with the accounting principles generally accepted in India. 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 misstatement, whether due to fraud or error.

AUDITORS'' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that 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 procedure selected depends 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 Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation ofthefinancial statements.

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

The Company has followed the policy of not amortising goodwill which is not in accordance with the Accounting Standards referred to in sub Section (3C) of Section 211 of the Companies Act, 1956. As a result (based on the management estimation of 25 years useful life of goodwill) the net profit for the year and good will amounts are overstated by ''10.35 lacs each and the Reserves and Surplus negative balance is understated by similar amount.

OPINION

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

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

- 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;

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

- 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.

- In our opinion, the Balance Sheet the Statement of Profit and Loss and the Cash Flow Statement comply with the accounting standards notified under the Act read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013

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

Annexure to Independent Auditors'' Report (Referred to in paragraph 1 under the Heading of "report on other legal and regulatory requirement" of our report of even date)

1. Having regard to the nature of the Company''s'' business/activities during the year, clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

2. In respects of the Company''s fixed assets:

(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 all locations at reasonable intervals. No material discrepancies between book records and the physical inventories have been noticed on such verification.

(c) No fixed assets have been disposed off during the year; therefore the same has not affected the going concern status of the Company.

3. In respect of the Company inventories:

(c) The inventories have been physically verified during the year at reasonable intervals by the Management.

(d) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(e) The Company is maintaining proper records of inventories. The discrepancies noticed on verification between the physical stocks and book records were not material and have been properly dealt with in the books of account.

4. In respect of the loans:

(a) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other

parties covered in the Register maintained under Section 301 of the Act, except unsecured loans from directors and relatives. The maximum amount involved in the current year amounted to Rs. 42.32 lakhs and Balance due as the year end is Rs.0.01 lakhs.

(b) In our opinion, the rate of interest and other terms and conditions on which such loans and advances are made are not prima facie prejudicial to the interest of the company.

5. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in internal control system.

6. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Act,:

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

(b) According to information and explanation given to us, the transactions of sales made in pursuance of contracts or arrangements entered in the registers maintained under Section 301, during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public and as such the question of compliances of Section 58, 58AA and other relevant provisions of act do not arise.

8. The Company has an internal audit system but scope of the same needs to be widened.

9. On the basis of records produced, we are of the opinion that prima facie cost records and accounts prescribed by the Central Government under Section 209(i)(d) of the Companies Act, 1956 in respect of products of the Company covered under the rules under said Section have been maintained. However we are neither required to carry out nor have carried out any detailed examination of such accounts and records.

10. In respect of statutory dues,

(a) According to information and explanation given to us, the Company has been regular in depositing with appropriate authorities undisputed statutory dues, including Income Tax, Sales Tax, Customs Duty, Cess and other statutory dues to the extent applicable to it. The dues in relation to Wealth Tax, Service Tax, Excise Duty, Provident fund Act, Investor Education and Protection fund Act are not applicable to the company in this regard. There have been

delays in respect of Profession Tax and income Tax deducted at source.

We have been informed that there are no undisputed statutory dues as at the year- end outstanding for a period of more than six months from the date on which they became payable, except the income tax dues for the year ended 31-3-2013 ( AY 2013-14 ) of Rs.10,00,000/- (Rupees Ten Lacs only) (including interest till the date of filing of the return for the above year).

(b) There is no disputed due on account of income tax, wealth tax, customs duty and cess. Dues on account of Sales Tax disputed, where such disputes are pending are mentioned below

Name of the Statute Nature of the Dues Amount Period to which in Rs. the amount relates

Central Sales Sales Tax and 250,664 FY 2005-06, Tax Act 1956 interest

Central Sales Sales Tax and 880,877 FY 2008-09 Tax Act 1956 interest

Name of the Statute Forun where the dispute is pending

Central Sales Deputy Commissioner of Sales Tax(Appeals) Tax Act 1956

Central Sales Deputy Commissioner of Sales Tax(Appeals) Tax Act 1956

11. The Company has accumulated losses at the end of the financial year. The Company has neither incurred cash loss during the financial year covered by our audit nor during the immediately preceding financial year.

12. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and banks. Further in our opinion and according to information and explanations given to us, the Company did not have any amount outstanding to debenture holders or non-financial banking institutions.

13. In our opinion and 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.

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in shares, securities, debentures. Therefore the provisions of clause 4 (xiv) of the Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions. Hence the provisions of the clause 4(xv) are not applicable to the company

16. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which it was obtained.

17. In our opinion and according to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis have been prima facie not been used during the year for long-term investment.

18. According to the information and explanations given to us, during the year covered by our audit, the Company has not made preferential allotment of equity shares to partes and companies covered in the register maintained under Section 301 of the Act.

19. According to the information and explanations given to us, during the year covered by our report, the Company has not issued any secured debentures.

20. During the year covered by our report, the Company has not raised any money by way of public issue.

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

For P. P. Jayaraman & Co., Chartered Accountants FRN-104139W

P. P. Jayaraman Proprietor MRN-41354

Place : Thane Date: 30th May, 2014


Mar 31, 2013

We have audited the accompanying financial statements of YUVRAAJ HYGIENE PRODUCTS LIMITED (the "Company") which comprises of Balance Sheet as at March 31, 2013 and also the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the financial statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and Cash Flows of the Company in accordance with the Accounting Standards referred to Section 211(3C) of the Companies Act, 1956 (the "Act") and in accordance with the accounting principles generally accepted in India. The responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation of the 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 financial statements based on our audit. We conducted our audit in accordance with Standards on Auditing issued by the Institute of Chartered Accountants of India. Those standards require that 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 procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedure selected depends 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 presentation of the financial statements that give 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 the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

- in the case of the Balance Sheet, of the State of Affairs of the Company as at March 31, 2013;

- in the case of Statement of Profit and Loss, of the Profit of the Company for the year ended on that date; and

- in the case of the Cash Flow statement, of the Cash Flows of the Company 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(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

- 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.

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

- 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 accounts.

- In our opinion, the Balance Sheet the Statement of Profit and Loss and the Cash flow statement comply with the Accounting Standards to in Section 211(3C) of the Companies Act, 1956.

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 4 of our Report of even date on the Accounts for the year ended on March 31, 2013 of Yuvraaj Hygiene Products Limited)

1. Having regard to the nature of the Company''s business/activities during the year, clause (xiii) of paragraph 4 of the Order is not applicable to the Company.

2. In respects of the Company''s fixed assets:

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

(b) A substantial portion of the fixed assets have been physically verified by the management during the year and in our opinion the frequency of such verification is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) No fixed assets have been disposed off during the year; therefore the same has not affected the going concern status of the Company.

3. In respect of the Company inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals. In our opinion, the frequency of such verification is adequate.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanation given to us, the Company has maintained proper records of inventories and no material discrepancies were noticed on physical verification and they have been dealt with in the books of accounts.

4. In respect of the loans:

(a) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under Section 301 of the Act, except unsecured loans from directors. The maximum amount involved in the current year amounted to Rs. 17.02 Lacs (Balance due as the year end isRs. 17.02 Lacs)

(b) In our opinion, the rate of interest and other terms and conditions on which such loans and advances are made are not prima facie prejudicial to the interest of the Company.

5. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in internal control system.

6. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Act, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements entered in the Register maintained in pursuance of Section 301 that needed to be entered in the Register maintained under the said section have been so entered.

(b) Where each of such transaction is in excess ofRs. 5 Lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

7. In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public during the year. Therefore the provisions of the clause 4 (vi) of the order are not applicable to the Company.

8. The Company has an internal audit system but the scope of the same needs to be widened.

9. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government under Section 209(1)(d) of the Companies Act, 1956 for maintenance of cost records in respect of household cleaning products and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained.

10. In respect of statutory dues,

(a) The Company has generally been regular in depositing undisputed statutory dues, including Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it have been generally regularly deposited during the year with the appropriate authorities. The dues in relation to Provident Fund Act, Investor Education and Protection Fund are not applicable to the company in this regard. There have been delays in respect of Profession Tax and Income Tax deducted at source.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of above were in arrears, as at March 31, 2013 for a period of more than six months from the date on which they became payable.

(c) According to the information and explanation given to us, there are no disputed dues in respect of sale tax, income tax, which have not been deposited on account of any dispute.

11. The Company has accumulated losses at the end of the financial year. The Company has not incurred cash loss during the financial year covered by our audit. The Company has incurred cash loss during the immediately preceding financial year

12. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to Financial Institutions and banks. Further in our opinion and according to information and explanations given to us, the Company did not have any amount outstanding to debenture holders or non-financial banking institutions.

13. In our opinion and 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.

14. In our opinion and according to the information and explanations given to us, the Company is not dealing in shares, securities, debentures. Therefore the provisions of clause 4 (xiv) of the Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantees for loans taken by others from banks or financial institutions. Hence the provisions of the clause 4(xv) are not applicable to the Company.

16. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which it was obtained.

17. In our opinion and according to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, we report that funds raised on short-term basis have been prima facie not been used during the year for long-term investment.

18. According to the information and explanations given to us, during the year covered by our audit, the Company has not made preferential allotment of equity shares to parties and companies covered in the register maintained under section 301 of the Act.

19. According to the information and explanations given to us, during the year covered by our report, the Company has not issued any secured debentures.

20. During the year covered by our report, the Company has not raised any money by way of public issue.

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

For P. P. Jayaraman & Co.,

Chartered Accountants

Firm Registration No : 104139W

P. P. Jayaraman

Proprietor

Membership No. 041354

Place : Thane

Date : 28th May 2013


Mar 31, 2010

1. We have audited the attached balance sheet of M/s. Intensive Air Systems Limited as at 31st March 2010, the Profit and Loss Account for the year ended 31.03.2010 and cash flow statement annexed thereto. These financial statements are the responsibility of the management of the Company. Our responsibility is to express an opinion on the 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 presentation of financial statements. We 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 wherever applicable.

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

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

c. The Balance Sheet and the Profit & Loss Account dealt with by this report are in agreement with the books of account.

d. In our opinion, these financial statements have been prepared in compliance with the applicable accounting standards referred to in section 211 (3C) of the Act.

e. Based on the written representation made by all the directors of the Company as on 31st March 2010 and taken on record by the Board of Directors of the Company and in accordance with the information and explanations as made available, the directors of the Company do not, prima facie have any disqualification as referred to in clause (g) of sub section (1) to section 274 of the Act.

f. In our opinion and to the best of our information and according to the explanations given to us, the balance sheet and profit and loss account together with the notes thereon and attached thereto give in the prescribed manner the information required by the "Act" and also give respectively, a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of Balance Sheet of the state of affairs of the Company as at 31st March 2010 and

ii) In the case of Profit and Loss account of the Loss for the year ended 31st March 2010

iii) In the case of the cash flow statement, of the cash flows for the year ended 31st March 2010.

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

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

(b) During the year, the Company has not disposed off any major plant and machinery.

(ii) Clause regarding inventory is not applicable to this Company.

(iii) The Company had not given any loans to companies, firms, or other parties covered in the register maintained under section 301 of the Companies Act, 1956. The Company had not taken any loans from companies, firms, or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) 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. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) -According to the information and explanations given to us, we are of the opinion that there are no transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956.

(vi) In our opinion and according to the information and explanations given to us,

the Company has not accepted any deposits from the public falls under the provisions of section 58A and 58AA of the Companies Act, 1956.

(vii) The Company does not have an internal audit system. However the internal controls are adquate and commensurate with the size and nature of its business.

(viii) The clause regarding maintenance of cost records is not applicable for this Company for the year.

(ix) (a) The Company 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 material statutory dues.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty, and cess were in arrears, as at 31.03.10 for a period of 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 sales tax, income tax, custom duty, wealth tax, excise duty, service tax and cess which have not been deposited on account of any dispute.

(x) In our opinion, the accumulated losses of the Company exceeded more than fifty percent of its net worth. The Company has

incurred cash loss during the financial year covered by our audit and also has incurred cash loss during the immediate preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank.

(xii) We are of the opinion based on the information available that the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a Chit fund or a Nidhi/ Mutual Benefit Fund/ Society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

(xv) In our opinion and the information, the Company has not given guarantees for loans taken by others from banks or financial institutions.

¦(xvi) No term loans have been taken by the Company during the year under review.

(xvii) 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 no funds raised on short-term basis have been used for long-term investment. No long Terms funds have been used to finance short- term assets except permanent working capital.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under section 301.

(xix) According to the information and explanations given to us, the Company has not issued any debentures during the period covered by our audit.

(xx) The Company has not made any public issue during the year under audit.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For GMK Associates

Chartered Accountants

(Firm Regn No.006945S)

Hyderabad G Satyanarayana Murty

31/05/2010 Partner M.No.29919

 
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