Auditor Report of Asahi Industries Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of ASAHI INDUSTRIES LIMITED. ("the Company"), which comprise the Balance Sheet as on 31st March, 2015 the Statement of Profit and Loss for the period 1st April 2014 to 31st March 2015 and the Cash Flow Statement for the period ending, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the 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 the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the 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 of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2015.

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the period ending on that date: and

(c) in the case of the Cash Flow Statement, of the Company for the period ending 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 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 Order.

2. As required by Section 143(3) of the Act, we further 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 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 Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs).

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

Annual Report 2014 -15 Annexure to the Independent Auditors' Report

1) In respect of its fixed assets

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets except in respect of additions made during the year which are in the process of updation.

b) As informed to us by the management the Company has a policy of physically verifying fixed assets in a phased manner over a period which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there was no material discrepancies noticed on such verification which were accounted in the financial statements.

2) In respect of its inventories:

a) In our opinion and according to the information and explanations 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.

b) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and the discrepancies noticed on such physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.

3) According to the information and explanations given to us, the Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 and hence, clause 3(iii) of the Order is not applicable to the Company.

4) In our opinion and according to the information and explanations given to us, there exist an adequate internal control system commensurate with the size of the Company and nature of its business with regard to purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system

5) The Company has not accepted any deposit from public. No order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

6) We have broadly reviewed the books of accounts maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under 148(1) of the Companies Act, 2013 in relation to products manufactured, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not made a detailed examination of the records with a view to determine whether they are accurate and complete.

7) According to the information and explanations given to us:

a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and other material statutory dues with the appropriate authorities during the year. There are no undisputed amounts payable in respect of aforesaid material statutory dues as at 31st March 2015, which were in arrears for a period of more than six months from the date they became payable.

b) On the basis of our examination of the documents and records of the Company, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise (The Annexure referred to in para 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of even date to the Members of on the financial statements for the year ended 31st March 2015.) 63 Financial Statements Corporate Overview Statutory Reports Standalone Financial Statements Notice Duty, Value Added Tax and Cess which have not been deposited on account of a dispute, except as enumerated herein below which are pending before respective authorities as mentioned there against:

Amount* Period to which Forum where Name of the Nature Of ( in Rs. amount relate dispute is statute the Dues Crore) pending

- - - - -

- - - - -

- - - - -

- - - - -

*Net of amounts paid under protest or otherwise. Amount as per demand order including interest and penalty wherever quantified.

c) The amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

8) The Company has accumulated losses as at 31st March, 2015 as the debit balance of statement of Profit or Loss Rs.306.15 Lacks has been adjusted against reserve and surplus (Refer Note No.2.2).

9) Based on our audit procedures, information and explanations given to us, in our opinion the Company has not defaulted in repayment of dues to financial institutions and banks. The Company does not have any outstanding debentures during the year

10) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

11) According to the information and explanations given to us, the Company has not taken any term loan during the year.

12) To the best of our knowledge and 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 A.F.KHASGIWALA & CO CHARTERED ACCOUNTANT

Sd/-

A.F. KHASGIWALA Place : Mumbai PARTNER Date :16/05/2015 Membership. No.6491 Firm Regn no.105114

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Mar 31, 2013

We have audited the attached Balance Sheet of ASAHI INDUSTRIES LTD (FORMELY KNOWN ASAHI FIBRES LIMITED) as at 31st March, 2013, and also the Profit and Loss Account of the Company for the year ended on that date 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.

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

2. As required by the Companies (Auditor''s Report) Order, 2003(CARO)and the Companies (Auditor''s Report)(Amendment) Orde, 2004, issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 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 the books.

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

d) On the basis of the written representations received from the directors as on 31st March, 2013 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2013 from being appointed as a director of the Company in terms of Section 274(1)(g) of the Companies Act, 1956.

e) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

f) 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 Act in the manner so required and give a true and fair view in conformity with 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, 2013,

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

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



ANNEXURE REFERRED TO IN PARAGRAPH 2 OF AUDITORS'' REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2013 OF ASAHI INDUSTRIES LTD (FORMELY KNOWN ASAHI FIBRES LIMITED

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit, we state that:

1. In respect of fixed assets: -

(a) The Company has maintained proper records to show full particulars, including quantitative details and situation of the Fixed Assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) The company has not disposed off any fixed assets during the year and therefore the question of reporting under clause 4(1)(C) of the Companies (Auditor''s Report) Order, 2003, does not arise.

2. In respect of Inventories:-

(a) The stocks of finished goods, stores, spare parts and raw materials of the company, at all its locations, have been physically verified by the management at reasonable intervals during the year.

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

(c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book records were not material and have been properly dealt with in the books of accounts.

(d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year

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

(a) The Company has taken unsecured loans from companies listed in the register maintained under Section 301 of the Act and / or Companies under the same management as defined under sub section (6) of section 370 of the Companies Act, 1956.

(b) The Company has not granted any loans secured or unsecured, during the year, to companies, firms or parties listed in the register maintained under 301 of the Companies acts, 1956. On the basis of the information and explanations given to us, there are no companies under the same management within the meaning of sub section (6) of section 370 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchase of stores, raw materials including components, plant & machinery, equipment and similar assets & purchase of goods and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. In respect of transaction covered under Section 301 of the Companies Act,1956: According to the information and explanations given to us, the company has not entered into any contract for the sale, purchase or supply of goods, materials or services which is required to be entered in the Register maintained under section 301 of the Companies Act 1956.

6. In our opinion, and according to the information and explanations given to us, the Company does have an internal audit system commensurate with the size of the company and nature of its business.

7. The Company has not accepted any deposits from the public during the year & consequently the provision of Section 58A and 58AA or any other relevant provision of the Companies Act, 1956 and the Rules made there under are not applicable.

8. We are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India under Section 209 (1) (d) of the Act have been maintained. We have, however, not made a detailed examination of such accounts and records.

(a) According to the records of the company, the provident fund and employees state Insurance, Income-tax, Wealth Tax, cess and other statutory dues have been regularly Deposited during the year with appropriate authorities.

(b) According to the information and explanations given to us, the disputed dues outstanding in respect of Sales tax is as follows:- .

Nature of Liability Nature of Dues Amount Period

Sales Tax Dispute on account of Rs.49.14 1996-97 Sales Tax Exemption Lacs 1997-98 granted to the Company 1998-99

Nature of Liability Remarks

Sales Tax Appellate Tribunal of sales Tax Dept. at Ahmedabad [Refer Note 2.19(e)]

10. According to the records of the company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi /Mutual benefit / societies are not applicable to the company.

13. During the year, the Company does not have any transactions in respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the company have been held by the company in its own name.

14. According to the information and explanations given to us, the Company has given Corporate Guarantee of Rs. 90 Crore in favour of Bank of India for securing Term Loan granted to Real time Properties Ltd. The Company has executed corporate gurantees aggregating Rs. 33.40 Crore in favour of Indian Overseas Bank, Nariman Point Branch, Mumbai for securing the loan granted to KSL and Industries Ltd., Jaybharat Textiles & Real Estate Ltd., Eskay Knit India Ltd. and Krishna Knitwear Technology Ltd.

15. 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.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on Short-term basis have been used for long term investment by the Company.

18. During the year covered by our audit report the Company has not issued any secured debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. The Company does not have any accumulated losses as at 31st March, 2013.

21. During the year the Company has not made any payment to parties or companies covered in the register maintained u/s 301 of the companies Act, 1956.

22. 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 and according to the information and explanations given to us, we have neither come across any instance of frauds on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For A. F. KHASGIWALA & CO.,

Chartered Accountants

Sd/-

A.F. Khasgiwala

Partner

Place : Mumbai Mem. No 006491

Date : 29th May, 2013 Firm Regn. No.105114W

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Mar 31, 2012

We have audited the attached Balance Sheet of ASAHI INDUSTRIES LIMITED as at 31st March, 2012, and also the Profit and Loss Account of the Company for the year ended on that date 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.

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

2. As required by the Companies (Auditor's Report) Order, 2003(CARO)and the Companies (Auditor's Report)(Amendment) Order, 2004, issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 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 the books.

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

d) On the basis of the 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 of the Company in terms of Section 274(1)(g) of the Companies Act, 1956.

e) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

f) 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 Act in the manner so required and give a true and fair view in conformity with 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, 2012,

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

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

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit, we state that:

1. In respect of fixed assets : -

(a) The Company has maintained proper records to show full particulars, including quantitative details and situation of the Fixed Assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) The company has not disposed off any fixed assets during the year and therefore the question of reporting under clause 4(1)(C) of the Companies (Auditor's Report) Order, 2003, does not arise.

2. In respect of Inventories:-

a) The stocks of finished goods, stores, spare parts and raw materials of the company, at all its locations, have been physically verified by the management at reasonable intervals during the year.

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

c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book records were not material and have been properly dealt with in the books of accounts.

d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year

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

a) The Company has taken unsecured loans from companies listed in the register maintained under Section 301 of the Act and / or Companies under the same management as defined under sub section (6) of section 370 of the Companies Act, 1956.

b) The Company has not granted any loans secured or unsecured, during the year, to companies, firms or parties listed in the register maintained under 301 of the Companies acts, 1956. On the basis of the information and explanations given to us, there are no companies under the same management within the meaning of sub section (6) of section 370 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchase of stores, raw materials including components, plant & machinery, equipment and similar assets & purchase of goods and for the sale of goods. Further, on the basis of our examination of the books and records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. In respect of transaction covered under Section 301of the Companies Act,1956 :

According to the information and explanations given to us, the company has not entered into any contract for the sale, purchase or supply of goods, materials or services which is required to be entered in the Register maintained under section 301 of the Companies Act 1956.

6. In our opinion, and according to the information and explanations given to us, the Company does have an internal audit system commensurate with the size of the company and nature of its business.

7. The Company has not accepted any deposits from the public during the year & consequently the provision of Section 58A and 58AA or any other relevant provision of the Companies Act, 1956 and the Rules made there under are not applicable.

8. We are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India under Section 209 (1) (d) of the Act have been maintained. We have, however, not made a detailed examination of such accounts and records.

9. (a) According to the records of the company, the provident fund and employees state Insurance, Income-tax, Wealth Tax, cess and other statutory dues have been regularly Deposited during the year with appropriate authorities.

(b) According to the information and explanations given to us, the disputed dues outstanding in respect of Sales tax is as follows:-

NATURE OF LIABILITY NATURE OF DUES AMOUNT PERIOD REMARKS

Sales Tax Dispute on account of Rs 49.14 Lacs 1996-97 Appellate Tribunal of sales Sales Tax Exemption 1997-98 Tax Dept. at Ahmedabad granted to the Company 1998-99 (Refer Note 6 of Schedule 14)

10. According to the records of the company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/ or advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi /Mutual benefit / societies are not applicable to the company.

13. During the year, the Company does not have any transactions in respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the company have been held by the company in its own name.

14. According to the information and explanations given to us, the Company has given Corporate Guarantee of Rs 90 Crore in favour of Bank of India for securing Term Loan granted to Real time Properties Ltd. an associated company being subsidiary of Jaybharat Textile & Realestate Ltd which is a Promoter of the company The Company has executed corporate gurantees aggregating Rs 33.40 Crore in favour of Indian Overseas Bank, Nariman Point Branch, Mumbai for securing the loan granted to KSL and Industries Ltd., Jaybharat Textiles & Real Estate Ltd., Eskay K'n'IT India Ltd. and Krishna Knitwear Technology Ltd.

15. 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.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on Short-term basis have been used for long term investment by the Company.

18. During the year covered by our audit report the Company has not issued any secured debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. The Company does not have any accumulated losses as at 31st March 2012 and has not incurred cash losses for the financial year ended 31st March, 2012

21. During the year the Company has not made any payment to parties or companies covered in the register maintained u/s 301 of the companies Act, 1956.

22. 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 and according to the information and explanations given to us, we have neither come across any instance of frauds on or by the Company, noticed or reported during the year, nor have been informed of such case by the management.

For A. F. KHASGIWALA & CO.,

Chartered Accountants

Sd/-

(A. F. KHASGIWALA)

Place : MUMBAI Partner

Dated : 28th April, 2012 Mem. No.006491

Firm Reg. No. 105114W

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Mar 31, 2011

We have audited the attached Balance Sheet of ASAHI INDUSTRIES LTD (Formerly known as Asahi Fibres Limited) as at 31st March, 2011, and also the Profit and Loss Account of the Company for the year ended on that date 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.

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

2. As required by the Companies (Auditors Report) Order, 2003 (CARO) and the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 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 accounts as required by law have been kept by the Company so far as appears from our examination of the books.

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

d) On the basis of the 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 31st March, 2011 from being appointed as a Director of the Company in terms of Section 274(1)(g) of the Companies Act, 1956.

e) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

f) 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 Act in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India :

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

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2011 OF ASAHI INDUSTRIES LTD (FORMERLY KNOWN AS ASAHI FIBRES LIMITED)

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit, we state that:

1. In respect of fixed assets: -

a) The Company has maintained proper records to show full particulars, including quantitative details and situation of the Fixed Assets.

b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

c) The company has not disposed off any fixed assets during the year and therefore the question of reporting under clause 4(1)(C) of the Companies (Auditors Report) Order, 2003, does not arise.

2. In respect of Inventories:- a) The stocks of finished goods, stores, spare parts and raw materials of the company, at all its locations, have been physically verified by the Management at reasonable intervals during the year.

b) In our opinion, the procedures of physical verification of stocks followed by the Management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book records were not material and have been properly dealt with in the books of accounts.

d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceeding year

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

a) The Company has taken unsecured loans from companies listed in the register maintained under Section 301 of the Act and / or Companies under the same management as defined under sub section (6) of section 370 of the Companies Act, 1956.

b) The Company has not granted any loans, secured or unsecured, during the year, to companies, firms or parties listed in the register maintained under 301 of the Companies Act, 1956. On the basis of the information and explanations given to us, there are no companies under the same management within the meaning of sub section (6) of section 370 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchase of stores, raw materials including components, plant & machinery, equipment and similar assets & purchase of goods and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. In respect of transactions covered under Section 301 of the Companies Act,1956:

According to the information and explanations given to us, the Company has not entered into any contract for the sale, purchase or supply of goods, materials or services which is required to be entered in the Register maintained under Section 301 of the Companies Act 1956.

6. In our opinion, and according to the information and explanations given to us, the Company does have an internal audit system commensurate with the size of the Company and nature of its business.

7. The Company has not accepted any deposits from the public during the year and consequently the provision of Section 58A and 58AA or any other relevant provision of the Companies Act, 1956 and the Rules made thereunder are not applicable.

8. We are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government of India under Section 209 (1) (d) of the Act have been maintained. We have, however, not made a detailed examination of such accounts and records.

9. a) According to the records of the Company, the provident fund and employees state Insurance, Income-tax, Wealth Tax, cess and other statutory dues have been regularly deposited during the year with appropriate authorities.

b) According to the information and explanations given to us, the disputed dues outstanding in respect of Sales tax is as follows:-

Nature of Liability Nature of Dues Amount Period Remarks

Sales Tax Dispute on account of Rs. 49.14 Lacs 1996-97 Appellate Tribunal of Sales Sales Tax Exemption 1997-98 Tax Dept. at Ahmedabad granted to the Company 1998-99 (Refer Note 6 of Schedule 14)

10. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi /Mutual benefit / societies are not applicable to the Company.

13. During the year, the Company does not have any transactions in respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the Company have been held by the Company in its own name.

14. According to the information and explanations given to us, the Company has given Corporate Guarantee of Rs. 90 Cr. in favour of Bank of India for securing Term Loan granted to Realtime Properties Ltd., an Associated Company being subsidiary of Jaybharat Textiles and Real Estate Ltd., which is a Promoter of the Company. The Company has executed Corporate Gurantees aggregating Rs. 33.40 Cr.in favour of Indian Overseas Bank, Nariman Point Branch, Mumbai, for securing the loan granted to KSL and Industries Ltd, Jaybharat Textiles and Real Estate Ltd, Eskay Knit (India) Ltd. and Krishna Knitwear Technology Ltd.

15. 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.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long term investment by the Company.

18. During the year covered by our audit report the Company has not issued any secured debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. The Company has not incurred cash losses for the financial year ended 31st March, 2011

21. During the year the Company has not made any payment to parties or companies covered in the register maintained u/s 301 of the Companies Act, 1956.

22. 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 and according to the information and explanations given to us, we have neither come across any instance of frauds on or by the Company, noticed or reported during the year, nor have been informed of such case by the Management.

For A.F. KHASGIWALA & CO., Chartered Accountants

Sd/- A.F. Khasgiwala Partner Place : Mumbai Mem. No 006491

Date : 28.04.2011 Firm Regn. No.105114W

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Mar 31, 2010

We have audited the attached Balance Sheet of ASAHI FIBRES LIMITED as at 31st March, 2010, and also the Profit and Loss Account of the Company for the year ended on that date 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.

1. 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 mis-statement. 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.

2. As required by the Companies (Auditors Report) Order, 2003(CARO)and the Companies (Auditors Report)(Amendment) order 2004 issued by the Central Government in terms of section 227(4A) of the Companies Act, 1956, and on the basis of such checks of the books of records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said Order.

3. Further to our comments in the Annexure referred to in paragraph 2 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 the books.

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

d) On the basis of the 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 of the Company in terms of Section 274(1 )(g) of the Companies Act, 1956.

e) In our opinion, the Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Companies (Accounting Standard) Rules, 2006.

f) 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 Act in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India :

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

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2010 OF ASAHI FIBRES LIMITED

On the basis of such checks as we considered appropriate and according to the information and explanation given to us during the course of audit, we state that:

1. In respect of fixed assets: -

(a) The Company has maintained proper records to show full particulars, including quantitative details and situation of the Fixed Assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies between the books records and the physical inventory have been noticed. In our opinion, the frequency of verification is reasonable.

(c) The company has not disposed off any fixed assets during the year and therefore the question of reporting under clause 4(1) (C) of the Companies (Auditors Report) order 2003 does not arise.

2. In respect of Inventories:-

a) The stocks of finished goods, stores, spare parts and raw materials of the Company, at all its locations, have been physically verified by the management at reasonable intervals during the year.

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

c) The discrepancies noticed on physical verification of the above referred stocks as compared to the book records were not material and have been properly dealt with in the books of accounts.

d) In our opinion, valuation of stocks is fair and proper in accordance with the normally accepted accounting principles and is on the same basis as in the preceding year

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

a) The Company has taken unsecured loans from Companies listed in the register maintained under Section 301 of the Act and / or Companies under the same management as defined under Section 370(1-B) which is rendered inoperative since insertion of sub section (6) of section 370 of the Companies Act, 1956.

b) The Company has not granted any loans secured or unsecured, during the year, to companies, firms or parties listed in the register maintained under 301 of the Companies acts, 1956. On the basis of the information and explanations given to us, there are no companies under the same management within the meaning of section 370(1-B) which is rendered inoperative since insertion of sub section (6) of section 370 of the Companies Act, 1956.

4. in our opinion and according to the information and explanations given to us, having regard to the explanation that certain items purchased are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to the purchase of stores, raw materials including components, plant & machinery, equipment and similar assets & purchase of goods and for the sale of goods. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. In respect of transaction covered under Section 301 of the Companies Act,1956:

According to the information and explanations given to us, the company has not entered into any contract for the sale, purchase or supply of goods, materials or services which is required to be entered in the Register maintained under section 301 of the Companies Act 1956.

6. In our opinion, and according to the information and explanations given to us, the Company does have an internal audit system commensurate with the size of the company and nature of its business.

7. The Company has not accepted any deposits from the public during the year & consequently the provision of Section 58A and 58AA or any other relevant provision of the Companies Act, 1956 and the Rules made there under are not applicable.

8. We have broadly reviewed the books of accounts maintained by the Company in respect of product where, pursuant to the rules made by the Central Government of India under Section 209(1 )(d) of the Act and are of the opinion that prima facie, the prescribed account and records have been made and maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records

9. (a) According to the information and explanations given to us and the records examined by us, 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, wealth tax, custom duty, excise-duty, cess and other statutory dues and there are no undisputed statutory dues outstanding as at 31st March 2010, for a period of more than six months from the date they became payable. (But see paragraph (b) below.

(b) According to the information and explanations given to us, the disputed dues outstanding in respect of Sales tax is as follows: -

Nature of Liability Nature of Dues Amount Period Remarks

Sales Tax Dispute on acco unt of 1996-97 Appellate Tribunal of sales Tax

Sales Tax Exemp tion Rs. 49.14 Lacs 1997-98 Dept. at Ahmedabad

granted to the Company 1998-99 (Refer Note 6 of Schedule 14)

10. According to the records of the company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank as at the Balance Sheet date.

11. Based on our examination of the records and the information and explanations given to us, the Company has not granted any loans and/or advances on the basis of security by way of pledge of shares, debentures and other securities.

12. The provisions of any special statute applicable to Chit fund & Nidhi/Mutual benefit /societies are not applicable to the company.

13. During the year, the Company does not have any transactions in respect of dealing and trading in shares, securities, debentures and other investments. All shares, debentures and other securities held as investments by the Company have been held by the Company in its own name.

14. According to the information and explanations given to us, the Company has given Corporate Guarantee of Rs.90 Crore in favour of Bank of India for securing Term Loan granted to Real time Properties Ltd ,a subsidiary of Jaybharat Textile & Real Estate Ltd., which is the Promoter of the Company.

15. 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.

16. The Company has not raised any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on Short-term basis have been used for long term investment by the Company.

18. During the year covered by our audit report the Company has not issued any secured debentures.

19. The Company has not raised any money by public issues during the year covered by our report.

20. During the year the Company has not made any payment to parties or companies covered in the register maintained u/s 301 of the companies Act, 1956.

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 and according to the information and explanations given to us, we have neither come across any instance of frauds on or by the company, noticed or reported during the year, nor have been informed of such case by the management.

For A.F.KHASGIWALA & CO.

Chartered Accountants

Sd/- A.F. KHASGIWALA

Place: Mumbai Partner

Dated: 20th May, 2010 Membership No. 6491