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Auditor Report of Binani Industries Ltd.

Mar 31, 2018

INDEPENDENT AUDITOR''S REPORT

To The Members of Binani Industries Limited

Report on the Standalone Ind AS Financial Statements

We were engaged to audit the accompanying standalone Ind AS financial statements of Binani Industries Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (financial performance including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended, and the accounting principles generally accepted in India.

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

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

We believe that the audit evidence we have obtained is not sufficient and appropriate to provide a basis for our audit opinion on the Statement and hence we have issued this disclaimer of opinion.

Basis for Disclaimer of Opinion:

a. The Company has not adjusted its Foreign Currency (FC) loan payable for matters communicated to it by its lenders which includes designation of FC loan to INR denominated loan along with a higher coupon rate. Further, the lender has demanded repayment of all outstanding loan amount including interest and penalty interest immediately and has also invoked the Corporate Guarantee issued by the company''s subsidiary i.e. Binani Cement Limited (BCL). However, the Company has continued accounting of the said loan as FC loan with the then coupon rate and recognized exchange fluctuation gain /loss in the Statement of Profit and Loss which is ultimately offset with transfer from/to Business Re-organisation Reserve (BRR). The said accounting treatment by the Company is not in accordance with the revised loan terms and also not in compliance with Ind AS 37 - Provision, Contingent Liability and Contingent Assets and Ind AS 1 - Presentation of Financial Statement. Had the Company followed the provisions of Ind AS 37 and Ind AS 1, Current liability, Business Reorganisation Reserve and Foreign Currency Monetary Item Translation (FCMIT) would have been higher/ (lower) by Rs. 7,636.56 lakhs ? (9,715.06) lakhs and Rs. 2,078.50 lakhs, as on March 31, 2018 respectively. Further, ''other expenses (exchange gain/loss)'', ''finance cost'' and Transfer from Business Reorganisation Reserve'' would have been higher/flower) by Rs. (635.30) lakhs, Rs.10,350.36 lakhs and Rs. 9,715.06 lakhs respectively for the year ended March 31, 2018. (Refer footnote (a)(iii) of 19 to the standalone Financial Statements).

b. The Company has not determined fair value of its investments in Binani Cement Limited (BCL) and impairment of loans and advances, security deposits and trade receivable due from BCL and Edayar Zinc Limited (EZL) as required by Ind AS 109 - Financial Instruments on account of ongoing corporate insolvency resolution process at BCL and pending outcome thereof and financial instability of EZL. In this regard, we are unable to comment on the carrying value of these investments amounting to Rs. 341,360 lakhs (PY:Rs. 3,41,240 lakhs), recoverability of loans and advances of Rs. 1,252.41 lakhs (PY: ? 1,073.60), Security Deposits of Rs.100 lakhs (PY: Rs 100 lakhs) and trade receivable of Rs. 1,362.10 lakhs (PY: Rs 2,962.71 lakhs) as at March 31, 2018 and its consequential impact, if any, on the financial statements of the Company (Refer Note 45 (b) and 48 to the standalone Financial Statements)

c. The Company has given corporate guarantees aggregating to Rs. 59 0,247 lakhs, to banks and financial institutions on behalf of various subsidiaries. This includes corporate guarantee of Rs. 379,792 lakhs on behalf of Binani Cements Ltd which is undergoing corporate insolvency resolution process under Insolvency and Bankruptcy Code, 2016. The Company has not determined the loss allowances in respect of corporate guarantee issued by it as required by Ind AS 109 - Financial Instruments on account of ongoing corporate insolvency resolution process at BCL and pending outcome thereof. In this regard, we are unable to comment on the consequential impact, if any, on the financial statements of the Company (Refer note 36(II) to the standalone Financial Statements)

d. The Company has not prepared and presented the Consolidated Ind AS financial statements for the year ended March 31, 2018 as required under section 129 (3) of the Companies Act, 2013 for the reasons as stated in note 4S(a) to the statement. In this regard, we are unable to comment on the consequential impact, if any of the non-compliance, on the financial statements of the Company. (Refer note 4S(a) to the standalone Financial Statements)

e. The management has represented to us that they are unaware of any matter, investigation or allegation, open or close, involving the Company, management of the Company, promotors or other group companies which requires adjustment/disclosure in the financial statements of the Company. We are unable to comment on the completeness/correctness of the above referred details in the absence of all the required information. (Refer note 4S(c) to the standalone Financial Statements).

f. We draw attention to the following matters:

1. Note 40 and 41 read with note 2 (13)(a) of the standalone Financial Statements which states that, pursuant to a separate Scheme of Amalgamation approved by the Horible High Court at Calcutta between Wada Industrial Estate Limited (WIEL) and a step down wholly owned subsidiary of the Company, being the Company as a successor to WIEL, the Company has applied AS 30, the Accounting Standard on Financial Instruments: Recognition and Measurement, issued by the Institute of Chartered Accountants of India (ICAI). All equity investment including investment in Subsidiaries are categorized as available for sale and measured at fair value and corresponding increase on account of fair valuation was credited to Business Reorganization Reserve ("BRR") since March 31, 2014. During the year, ICAI has withdrawn AS 30. Consequent to this, the Company, backed by legal opinion, has applied principles of notified Ind AS related to Financial Instruments being new accounting standards applicable instead of AS 30. All equity investment including investment in Subsidiaries except Investment in Binani Cements Limited are designated as fair value through profit & loss. However, to give effect to the accounting policies applicable to WIEL and to the Company as a successor to WIEL being accounting policies adopted as per the Scheme of Amalgamation approved by the Horible High Court at Calcutta the said treatment has been given BRR. The net increase in restated fair value credited to BRR of Rs 7,847.49 lakhs (March 31, 2017, decrease Rs 678.07 lakhs). Further, in accordance with the said scheme, the Company has offset certain expenses (net) amounting to 5,353.17 Lakhs against BRR during year ended March 31, 2018.

2. Note 43 of the standalone Financial Statements which states that, one of the creditors of the Company had filed a winding up petition on November 19, 2016 against the Company with the Hon''ble High Court of Calcutta which has been admitted by the court on September 20, 2017. The Company is seeking recall of the order. The Company has entered into a settlement with such creditor by agreeing to pay its entire dues along with interest.

3. Note 44 of the standalone Financial Statements, where in the management has explained the reason for reduction in the operations of the Company with Binani Cement Limited (one of the subsidiary of the Company).

Disclaimer of Opinion

Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the Standalone Ind AS financial statements.

Material uncertainty related to Going Concern

Management has prepared the Standalone Ind AS Financial Statements on going concern basis in spite of the following facts and circumstances:

1) The Company has reported comprehensive losses of Rs (499) lakhs for the year ended March 31, 2018.

2) The guarantees issued by the Company on behalf of subsidiaries are significant in relation to the net worth of the Company as at March 31, 2018.

3) The constant decrease in the operations of the Company.

The management is working towards finding a workable solution to resolve the financial position by discussion with the lenders and others and to continue its business as going concern. Accordingly, the management considers it appropriate to prepare these financial statements on a going concern basis. (Refer note 46 to the standalone Financial Statements)

This situation indicates the existence of a material uncertainty that may cast significant doubt on the Company''s ability to continue as a going concern and therefore the Company may unable to realise its assets and discharge its liabilities in the normal course of business.

Report on Other Legal and Regulatory Requirements

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

(a) As described in the Basis for Disclaimer of Opinion paragraph, we have sought but were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

(b) Due to the effect of matter described in para (a) and possible effects of the matters described in para (b), (c), (d) (e) and (f) in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books.

(c) the Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account as maintained.

(d) Due to the effect of matter described in para (a) and possible effects of the matters described in para (b), (c), (d) (e) and (f) in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The matters described in the basis of disclaimer of opinion paragraph and in the modified report on Internal Financial Controls over financial reporting (Annexure A), in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

(g) The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in the basis of disclaimer of opinion paragraph above.

(h) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate modified report in ''Annexure A

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

i. In the view of the matter stated in para (e) in the basis of disclaimer of opinion paragraph, we are unable to state whether Note 36 to the standalone Ind AS financial statements disclose the complete impact of pending litigations on its financial position in its standalone Ind AS financial statements (refer note 36 in its standalone Ind AS financial statements)

ii. The Company did not have any long-term contracts including derivative contracts, for which there were any material foreseeable losses. iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of sub-section 11 of section 143 of the Act, we give in the ''Annexure B'', a statement on the matters specified in paragraphs 3 and 4 of the Order.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No.lOS047W

Anita Somani

Partner

Membership No.: 124118

Place: Mumbai

Date: May 30, 2018

ANNEXURE A TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF BINANI INDUSTRIES LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Binani Industries Limited ("the Company") as of 31st March, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit conducted in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicableto an audit of internal financial controls, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls Over Financial Reporting

A Company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A Company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Basis for Adverse opinion

As described in basis of disclaimer opinion paragraph of our main report, the Company has not established adequate internal financial controls with respect to matters stated therein and that whatever financial controls have been established were not operating effectively. While reference may be made to the aforesaid Paragraph, the following significant aspects of material weaknesses in internal control system are particularly noteworthy:

(a) Non-compliance of the requirements of Companies Act, 2013 and Security and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015 with regard to preparation of Consolidated Financial Statements and Consolidated Financial results for the year ended March 31, 2018. (Refer note no 4S(a) to the standalone financial statement)

(b) Deficiencies in maintenance of books of accounts and documentation for stand taken by the management for items described in Basis for disclaimer of opinion paragraph (a) to (e) of our main report.

(c) Deficiencies in non-assessment of impact of Indian Accounting Standards (Ind AS) for items described in Basis for disclaimer of opinion paragraph (a) to (c) of our main report.

A ''material weakness'' is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company''s financial statements will not be prevented or detected on a timely basis.

Adverse opinion

In our opinion, because of the matters described in the basis of adverse opinion paragraph of main report and in view of possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has not maintained adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were not operating effectively as of March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note.

We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2018 Ind AS standalone financial statements of the Company, and these material weaknesses have inter-alia affected our opinion on the financial statements of the standalone Company and we have issued a disclaimer of opinion on the Ind AS Standalone financial statements.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No.105047W

Anita Somani

Partner

Membership No.: 124118

Place: Mumbai

Date: May 30, 2018

ANNEXURE B TO INDEPENDENT AUDITORS'' REPORT

[Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors'' Report of even date to the members of Binani Industries Limited (the Company'') on the standalone Ind AS financial statements for the year ended March 31, 2018]

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

(b) All the fixed assets have not been physically verified by the management during the year but there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to information and explanations given to us and based on our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

ii. According to the information and explanation provided to us by the management, Company''s business does not involve inventories and, accordingly, the requirements under paragraph 3 (ii) of the Order are not applicable to the Company.

iii. The Company has granted loans and advances, secured or unsecured to 3 Companies covered in the register maintained under section 189 of the Companies Act, 2013.

(a) According to the information and explanations given to us and based on the audit procedures conducted by us, we are of the opinion that the terms and conditions of loans granted by the company to 2 parties covered in the register maintained under section 189 of the Act, (total loan amount granted Rs.24.48 lakhs and balance outstanding as at balance sheet date Rs. 4.68 lakhs) are prejudicial to the company''s interest on account of the fact that the loans have been granted at Nil rate of interest rate.

(b) In the case of the loans granted to the Companies listed in the register maintained under section 189 of the Act, schedule of repayment of principal have not been stipulated. Hence clause (iii) (b) and (c) of the Order are not commented on.

iv. In our opinion and according to the information and explanation given to us, during the year, the Company had not given any loans or made investments to parties covered under section 186 of the Companies Act, 2013, hence the provisions stated in paragraph 3 (iv) of the Order are not applicable to the Company.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public within the meaning of Sections 73,74,75 and 76 of the Act and the rules framed there under.

vi. The provisions of sub-section (1) of section 148 of the Act are not applicable to the Company as the Central Government of India has not specified the maintenance of cost records for any of the products of the Company. Accordingly, the provisions stated in paragraph 3 (vi) of the Order are not applicable to the Company.

vii. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, good and service tax, service tax, duty of custom, value added tax, cess and other material statutory dues as applicable to it except for slight delay in few cases. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at March 31, 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, and examination of records of the Company, there are no dues of sales-tax, custom duty, service tax and value added tax, which have not been deposited with the appropriate authorities on account of any dispute, expect in cases which is described below:

Name of the Statute

Nature of Dues

Amount (Rs. In lacs)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act, 1961

Income Tax Matters

0.49

FY 2002-03

A.O

Income Tax Act, 1961

Income Tax Matters

32.10

FY 2009-10

A.O.

Income Tax Act, 1961

Income Tax Matters

3017.25

FY 2006-07

High Court

Income Tax Act, 1961

Income Tax Matters

120.38

FY 2008-09

CIT(Appeals)

Income Tax Act, 1961

Income Tax Matters

164.56

FY 2009-10

CIT(Appeals)

Income Tax Act, 1961

Income Tax Matters

1837.03

FY 2011-12

CIT(Appeals)

Gujrat Value Added Tax, 2003

Value Added Tax(VAT)

146.73

FY 2013-14

A.O.

viii. According to the records of the Company examined by us and information and explanation given to us, the Company has defaulted in repayment of dues to bank as follows. The Company does not have any loans or borrowings from any financial institution, government or debenture holders during the year. Also refer para (a) of the Basis for Disclaimer of Opinion paragraph of our main audit report.

Particulars

Principal Amount (in lacs)

Interest Accrued (In lacs)

Remark, if any

Period of default

Export Import Bank of India

46,556.43

21,361.64

Term Loan

23 months to 38 months

ix. The Company has not obtained any moneys by way of initial public offer or further public offer (including debt instrument) and term loans were applied for the purpose for which those were raised during the year.

x. Except for matter reported in para (e) of the basis of disclaimer of opinion paragraph in our main audit report, according to the information and explanation provided by the management and 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 fraud by the Company or any instance of fraud on the Company by its officers/employees has been noticed or reported during the year, nor have we been informed of such case by the management.

xi. Due to the effect and possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph of our main report, we are unable to state whether the remuneration paid to its directors is within the limits prescribed under Section 197 of the Act and the rules thereunder, as required by The Companies (Amendment) Act, 2017.

xii. In our opinion and according to information and explanation given to us, the Company is not Nidhi Company. Accordingly, the provisions stated in paragraph 3(xii) of the Order are not applicable to the company.

xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards. Also refer to para (e) in the Basis for Disclaimer of Opinion paragraph of our main audit report.

xiv. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions stated in paragraph 3 (xiv) of the Order are not applicable to the Company.

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

xvi. In our opinion, the Company is not required to be registered under Section 45-1A of the Reserve Bank of India Act, 1934, and accordingly, the provisions stated in paragraph clause 3 (xvi) of the Order are not applicable to the Company.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No.105047W

Anita Somani

Partner

Membership No.: 124118

Place: Mumbai

Date: May 30, 2018


Mar 31, 2016

INDEPENDENT AUDITOR''S REPORT

To the Members of BINANI INDUSTRIES LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying Standalone Financial Statements of Binani Industries Limited (“the Company"), which comprises of the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, in which are incorporated the financial information of erstwhile Binani Metals Limited, now a division of the Company for the year ended on that date, consequent to its Amalgamation into the Company from the appointed date of April 1, 2015.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit.

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone 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 an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016 and its profit and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the Standalone Financial Statements:

a) With reference to Note 35 of the standalone financial statements, pursuant to a separate Scheme of Amalgamation approved by the Hon''ble High Court at Calcutta between WIEL and a step down wholly owned subsidiary of the Company, being the Company as a successor to WIEL, has partially applied AS 30 as on March 31, 2014, the Accounting Standard on Financial Instruments: Recognition and Measurement issued by the ICAI, which constitutes a departure from the Accounting Standards referred to in clause 2 of section 2 of the Act. Accordingly, the Company has classified its investments in subsidiaries and other investments as “available for sale financial assets" and measured such investments at their fair value (except for those investments whose fair value cannot be reliably measured, which investments in accordance with AS 30 are continued to be measured at cost and their cost is considered as the fair value) and corresponding increase of Rs.299,749.16 lacs on account of fair valuation was credited to Business Reorganization Reserve (“BRR") as on March 31, 2014. Accordingly, investments has been fair valued and regrouped under investments as on 31st March 2016. During the year, the net increase in restated fair value of Rs.9,919.21 lacs (previous year decrease - Rs 32,642.99 lacs) has increased the carrying value of Business Reorganization Reserve (BRR). Further, with reference to Note 36 of the standalone financial statements, in accordance with the said scheme, the Company has offset certain expenses amounting to Rs.8,841.05 lacs against BRR in the current year.

Had the accounting policy of the Company not been changed, the value of the investments would have been lower by Rs.277,025.37 lacs and the said amount would not have been credited to the BRR. Also, had certain revenue expenses not been offset against the BRR, the profit for the financial year would have been lower by Rs.8,841.05 lacs (previous year: 19,802.74 lacs).

b) With reference to Note 28 of the standalone financial statements, regarding outstanding guarantees aggregating to Rs.5,28,729.44 lacs (2015: 4,92,102.64 lacs) issued by the Company to banks and financial institutions on behalf of various subsidiaries including one step down subsidiary, which are significant in relation to the net worth of the Company as at March 31, 2016, in the opinion of the management, these are not expected to result into any financial liability to the Company.

Our opinion is not qualified in respect of these matters.

Other Matter

The Standalone Financial Statements of the Company for the year ended March 31, 2015, were audited by another auditor whose report dated May 30, 2015 expressed an unmodified opinion on those statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (“the Order") issued by the Central Government in terms of sub-section 11 of section 143 of the Act, we give in the ''Annexure A'', a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

(e) In our opinion, there are no matters that may have an adverse effect on the functioning of the Company;

(f) On the basis of the written representations received from the directors as on March 31, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 from being appointed as a director in terms of Section 164 (2) of the Act;

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements -Refer Note 28 to the standalone financial statements;

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

[Referred to in paragraph 2 under ''Report on Other Legal and Regulatory Requirements'' in the Independent Auditors'' Report of even date to the members of Binani Industries Limited (''the Company'') on the standalone financial statements for the year ended March 31, 2016]

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

(b) As explained to us, all the fixed assets have been physically verified by the management at reasonable intervals during the year in accordance with planned program of physical verification of fixed assets and no material discrepancies were identified on such verification.

(c) According to information and explanations given to us and based on our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

ii. The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable and no material discrepancies were identified on such verification.

iii. As per information and explanation given to us, the Company has not granted any loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions stated in paragraph 3 (iii) (a) and (b) of the order are not applicable to the Company.

iv. In our opinion and according to the information and explanation given to us, the Company has complied with the provision of Section 185 & 186 of the Companies Act, 2013, with respect to the loans and investment made.

v. The Company has not accepted any deposits from the public.

vi. The Central Government has not prescribed the maintenance of cost records under sub-Section (1) of Section 148 of the Companies Act 2013, for any of the services/ products of the Company.

vii. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of custom, value added tax, cess and other material statutory dues as applicable to it except for slight delay in few cases. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at March 31, 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of sales-tax, custom duty, service tax, custom duty and value added tax, which have not been deposited with the appropriate authorities on account of any dispute, expect in case of income-tax which is described below:

Name of the Statute

Nature of Dues

Amount (Rs. In lacs)

Period to which the amount relates

Forum where dispute is pending

Income Tax Act, 1961

Income Tax Matters

1,837.03

F Y 2011-12

CIT (Appeals)

Income Tax Act, 1961

Income Tax Matters

3,017.25

F Y2006-07

High Court

Income Tax Act, 1961

Income Tax Matters

0.49

F Y2002-03

Assessing Officer

viii. According to the records of the Company examined by us and information and explanation gives to us, the Company has not defaulted in repayment of dues to debenture holder, government and financial institution except for default in repayment of dues to banks details of which are as follows:

Name of the Lender

Principal Amount

Interest Amount

Remark

(in Lacs)

(in Lacs)

Export Import Bank of India

Nil

535.21 (including penal interest)

Term Loan

ix. The Company has not obtained any moneys by way of initial public offer or further public offer (including debt instrument) and term loans were applied for the purpose for which those were raised during the year.

x. 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 fraud by the Company or any instance of fraud on the Company by its officers/employees has been noticed or reported during the year, nor have we been informed of such case by the management.

xi. According to information and explanations given to us and based on our examination of the records of the Company, the Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provision of section 197 read with Schedule V to the Companies Act.

xii. In our opinion and according to information and explanation given to us, the Company is not Nidhi Company. Accordingly, the provisions of paragraph 3(xii) of the Order are not applicable.

xiii. According to information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 where applicable and the details has been disclosed in the standalone financial statements as required by the applicable accounting standards.

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

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

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934, and hence provisions of paragraph 3 (xvi) of the Order are not applicable.

For MZSK & Associates

Chartered Accountants

Firm Registration No. 105047W

Abuali Darukhanawala

Partner

Membership No.108053

Place : Mumbai

Date : May 30,2016


Mar 31, 2015

We have audited the accompanying financial statements of BINANI INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2015 and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management' Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements 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 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 an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Emphasis of matters

Without qualifying our opinion:

1. With reference to note number 30 of the financial statements, pursuant to a separate Scheme of Amalgamation approved by the Hon'ble High Court at Calcutta between WIEL and a step down wholly owned subsidiary of the Company, being the Company as a successor to WIEL, has partially applied AS 30 as on March 31, 2014, the Accounting Standard on Financial Instruments: Recognition and Measurement issued by the ICAI, which constitutes a departure from the Accounting Standards referred to in clause 2 of section 2 of the Act. Accordingly, the Company has classified its investments in subsidiaries and other investments as "available for sale financial assets" and measured such investments at their fair value (except for those investments whose fair value cannot be reliably measured, which investments in accordance with AS 30 are continued to be measured at cost and their cost is considered as the fair value) and corresponding increase of Rs. 299,749.16 lacs on account of fair valuation was credited to Business Reorganization Reserve ("BRR") as on March 31, 2014. Accordingly, investments has been fair valued and regrouped under non current investments as on 31st March 2015. The consequential net decrease in restated fair value of Rs. 32,642.99 Lacs has reduced the carrying value of Business Reorganisation Reserve (BRR). Further, with reference to note number 31 of the financial statements, in accordance with the said scheme the Company has offset certain revenue expenses amounting to Rs. 19,802.74 lacs against BRR in the current year.

Had the accounting policy of the Company not been changed as aforesaid in previous year, the value of the investments would have been lower by Rs. 267,106.16 lacs and the said amount would not have been credited to the BRR. Also, had certain revenue expenses not been offset against the BRR, the Profit for the financial year would have been lower by Rs. 19,802.74 lacs.

With reference to note number 32 of the financial statements, regarding outstanding guarantees aggregating Rs. 4,92,102.64 Lacs issued by the Company to banks and financial institutions on behalf of various subsidiaries including one step down subsidiary, which are significant in relation to the net worth of the Company as at March 31, 2015, in the opinion of the management, these are not expected to result into any financial liability to the Company.

Report on other Legal and Regulatory Requirements

. As required by 'the Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order"), 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 Order.

As required by section 143(3) of the Act, we report that:

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

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

c) The Balance Sheet, 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, aforesaid Standalone Financial Statements comply with the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2015.

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

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

1. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements – Refer Note 24 (a) to the financial statements;

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

3. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2015.

Referred to in paragraph 1 of 'Report on other Legal and Regulatory Requirements' in our Report of even date on the accounts of Binani Industries LIMITED for the year ended March 31, 2015.

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

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

ii. The Company's nature of operations does not require it to hold inventories. Consequently, clause 3(ii) of the order is not applicable

iii. As per information and explanations given to us, the Company has not granted loan, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Accordingly, the sub-clause (a) and (b) of clause (iii) are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to fixed assets and with sale of services. 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.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. The Central Government has not prescribed the maintenance of cost records under sub-Section (1) of Section 148 of the Companies Act, for any of the products of the Company.

vii. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues barring delays in certain months including provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, duty of custom, duty of excise duty, value added tax, cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at March 31, 2015 for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

Name of Nature Period to Amount Forum the Statute of Dues which the in Lacs where amount dispute is relates pending

Income Tax Income F.Y. 2006-07 3,017.25 High Court Act, 1961 Tax

(c) The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act, 1956 and the rules made there under.

viii. The Company's accumulated losses at the end of the financial year are less than fifty percent of its net worth and it has incurred cash losses in the current financial year as well as in immediately preceding financial year.

ix. According to the records of the Company examined by us and information and explanation given to us, the Company has not defaulted in repayment of dues to financial institution and bank.

x. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company, for loans taken by others from banks or financial institutions during the year, are not prima facie prejudicial to the interest of the Company.

xi. In our opinion and according to the information and explanations given to us, the term loans availed by the Company were, prima facie, applied for the purpose for which the loans were raised, other than temporary deployment in deposits with banks, pending application of those loans.

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

For Kanu Doshi Associates

Chartered Accountants

Firm registration No: 104746W

Jayesh Parmar

Partner

Membership No: 45375

Place: Mumbai

Date : May 30, 2015


Mar 31, 2013

Report on the Financial Statements

We have audited accompanying fnancial statements of BINANI INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2013 and the Statement of Proft and Loss and Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management'' Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial 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 fnancial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the fnancial statements.

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

Basis for Qualifed Opinion

Attention is invited to Note no. 34 of the fnancial statements regarding deferment of certain expenditure amounting to Rs.6,544.51 Lacs classifed as unamortised expenses incurred for holding current investment, which constitutes a departure from the Accounting Standards referred to in sub section (3C) of Section 211 of the Companies Act, 1956.

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 Qualifed Opinion paragraph, the fnancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Statement of Proft and Loss, of the proft for the year ended on that date; and

c) in the case of Cash Flow Statement, of the cash fows 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") as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specifed in paragraphs 4 and 5 of the said Order.

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

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

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

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

d) Except for the effects of the matter described in the Basis for Qualifed Opinion paragraph, in our opinion, the Balance Sheet, Statement of Proft and Loss and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

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

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fxed assets.

(b) All fxed assets have not been physically verifed by the management during the year, but there is a regular programme of verifcation which in our opinion is reasonable having regards to the size of the Company and the nature of its assets. We are informed that no material discrepancies were noticed on such verifcation.

(c) There has been no disposal of substantial part of fxed assets during the year, which may affect the going concern status of the Company.

(ii) The Company does not hold any inventories. Accordingly, clause (ii) of paragraph 4 of the Order is not applicable.

(iii) According to information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, frms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the sub-clauses (b),(c),(d),(f) and (g) of clause (iii) are not applicable to the Company.

(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, for the purchase of fxed assets and sale of services. On the basis of our examination of the books and records of the Company, we have not observed any continuing failure to correct major weaknesses in the internal control system.

(v) To the best of our knowledge and belief and according to the information and explanations given to us that there are no transactions, particulars of contracts or arrangements required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956. Accordingly, clause (v) (b) of the order is not applicable.

(vi) The Company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act and the rules framed there under apply.

(vii) In our opinion, the internal audit functions carried out during the year by a frm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and nature of its business.

(viii) As informed to us, the Company is not required to maintain cost records under Section 209 (1) (d) of the Companies Act, 1956.

(ix) (a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income- Tax, Sales-Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and any other statutory dues with the appropriate authorities during the year.

(b) According to the record of the Company, there are no dues outstanding of Income Tax, Sales Tax, Service tax, Custom Duty, Wealth Tax, Excise Duty, Cess on account of any dispute, other than the following:

Name of Nature of Period to Amount Forum where the Statute Dues which the Rs.in Lacs dispute is amount pending relates

Income Tax Income 1995-96 344.45 Assessing Act, 1961 Tax Offcer

Income Tax Income 2006-07 3,791.76 High Court Act, 1961 Tax

Income Tax Income 2010-11 112.70 Assessing Act, Tax Offcer 1961

(x) The Company''s accumulated losses at the end of the fnancial year are less than ffty percent of its net worth and it has not incurred cash loss both in the current year and in the immediately preceding fnancial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to fnancial institutions or banks. The Company has not issued any debentures.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, 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 and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual beneft/societies.

(xiv) In our opininon and according to information and explanation given to us, the Company has invested temporary surplus funds in mutual funds and term deposits. According to the information and explanation given to us proper records have been maintained of the transactions and contracts and timely entries have been made therein. The mutual funds, term deposits and the shares of its subsidiaries have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by its subsidiaries from Banks and fnancial institutions, the terms and conditions thereof in our opinion are not prima facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(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 Company has not used funds raised on short-term basis for long term purposes.

(xviii) The Company has not made preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) According to the information and explanations given to us and the records examined by us, no debentures were issued by the Company during the year.

(xx) The Company has not raised any money through public issue during the year.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the fnancial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Kanu Doshi Associates

Chartered Accountants

Firm Registration No. 104746W

Jayesh Parmar

Partner

Membership No.45375

Place : Mumbai

Date : April 23, 2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Binani Industries Limited as at March 31, 2012 and also the Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

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

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

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

v. On the basis of the written representations received from the Directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

5. Without qualifying our report we invite attention to note no. 38 regarding appointment of Company Secretary.

6. In our opinion and to the best of our information and according to the explanations given to us, they said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012.

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

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

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

b) All fixed assets have not been physically verified by the management during the year, but there is a regular programme of verification which in our opinion is reasonable having regards to the size of the Company and the nature of its assets. We are informed that no material discrepancies were noticed on such verification.

c) There has been no disposal of substantial part of fixed assets during the year, which may affect the going concern status of the Company.

ii. The Company does not hold any inventories. Accordingly, clause (ii) of paragraph 4 of the Order is not applicable.

iii. According to information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under 301 of the Companies Act, 1956. Accordingly, the sub-clauses (b),(c),(d),(f) and (g) of clause (iii) are not applicable to the Company.

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, for the purchase of fixed assets and sale of services. On the basis of our examination of the books and records of the Company, we have not observed any continuing failure to correct major weaknesses in the internal control system.

v. To the best of our knowledge and belief and according to the information and explanations given to us that there are no transactions, particulars of contracts or arrangements required to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956. Accordingly, clause (v) (b) of the order is not applicable.

vi. The Company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act and the rules framed there under apply.

vii. In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and nature of its business.

viii. As informed to us, the Company is not required to maintain cost records under Section 209 (1) (d) of the Companies Act, 1956.

ix. a) According to the records of the Company, the Company

is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income- Tax, Sales-Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

b) According to the record of the Company, there are no dues outstanding of Income Tax, Sales Tax, Service tax, Custom Duty, Wealth Tax, Excise Duty, Cess on account of any dispute, other than the following:

Name of Nature of Period to Amount Forum where the Statute Dues which the Rs. in dispute is amount Lakhs pending relates

Income Tax Income 1995-96 344.45 Assessing Act, 1961 Tax Officer

Income Tax Income 2006-07 3,791.76 High Court Act, 1961 Tax

Income Tax Income 2008-09 92.85 Commissioner Act, 1961 Tax of Income Tax

(Appelas)

x. The Company's accumulated losses at the end of the financial year are less than fifty per cent of its net worth and it has not incurred cash loss both in the current year and in the immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or banks. The Company has not issued any debentures.

xii. According to the information and explanations given to us and based on the documents and records produced to us, 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 and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit/societies.

xiv. In our opinion and according to information and explanation given to us, the Company has invested temporary surplus funds in mutual funds and term deposits. According to the information and explanation given to us proper records have been maintained of the transactions and contracts and timely entries have been made therein. The mutual funds, term deposits and the shares of its subsidiaries have been held by the Company in its own name.

xv. According to the information and explanations given to us, the Company has given guarantee for loans taken by its subsidiaries from Banks and Financial Institutions, the terms and conditions thereof in our opinion are not prima facie prejudicial to the interest of the Company.

xvi. Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

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 Company has not used funds raised on short-term basis for long term purposes.

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

xix. According to the information and explanations given to us and the records examined by us, no debentures were issued by the Company during the year.

xx. The Company has not raised any money through public issue during the year.

xxi. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Kanu Doshi Associates

Chartered Accountants

Firm Registration No. 104746W



Jayesh Parmar

Partner

Membership No.45375

Place : Mumbai

Date : April 21, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of Binani Industries Limited as at March 31, 2011 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards required 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 signifcant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) 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 specifed in paragraphs 4 and 5 of the said order.

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

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

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

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

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

v. Based on the written representations received from the Directors, and taken on record by the Board of Directors, we report that none of the directors is disqualifed as on March 31, 2011 from being appointed as Directors in terms of Section 274 (1) (g) of the Companies Act, 1956.

5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the signifcant Accounting Policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011.

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

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

Annexure referred to in paragraph 3 of our report of even date to the Members of Binani Industries Limited.

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

b) All fixed assets have not been physically verifed by the management during the year, but there is a regular programme of verifcation which in our opinion is reasonable having regards to the size of the Company and the nature of its assets. We are informed that no material discrepancies were noticed on such verifcation.

c) There has been no disposal of substantial part of fixed assets during the year, which may affect the going concern status of the Company.

ii. The Company does not hold any inventories. Accordingly, clause (ii) of paragraph 4 of the Order is not applicable.

iii. According to information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured, to or from companies, frms or other parties covered in the register maintained under 301 of the Companies Act, 1956. Accordingly, the sub-clauses (b),(c),(d),(f) and (g) of clause (iii) are not applicable to the Company.

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, for the purchase of fixed assets and sale of services. On the basis of our examination of the books and records of the Company, we have not observed any continuing failure to correct major weaknesses in the internal control system. v.

a) In respect of transactions entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us, particulars of contracts or arrangements that needed to be entered into the register have been so entered.

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

vi. The Company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act and the rules framed there under apply.

vii. In our opinion, the internal audit functions carried out during the year by a frm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and nature of its business.

viii. As informed to us, the Company is not required to maintain cost records under Section 209 (1) (d) of the Companies Act, 1956.

ix. a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

Further, since the Central Government has till date not prescribed the amount of cess payable under Section 441 A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

b) According to the record of the Company, there are no dues outstanding of Income Tax, Sales Tax, Service tax, Custom Duty, Wealth Tax, Excise Duty, Cess on account of any dispute, other than the following:

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

Income Tax Income tax 1996-97 344.45 Act, 1961

Income Tax Income tax 2007-08 3,791.76 Act, 1961

Name of the Statue Forum where dispute is pending

Income Tax Act, 1961 Assessing officer

Income Tax Act, 1961 High Court

x. The Companys accumulated losses at the end of the financial year are less than ffity per cent of its net worth and it has not incurred cash loss both in the current year and in the immediately preceding financial year.

xi. Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions or banks. The Company has not issued any debentures.

xii. According to the information and explanations given to us and based on the documents and records produced to us, 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 and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit/societies.

xiv. In our opininon and according to information and explanation given to us, the Company has invested temporary surplus funds in mutual funds and term deposits. According to the information and explanation given to us proper records have been maintained of the transactions and contracts and timely entries have been made therein. The mutual funds, term deposits and the shares of its subsidiaries have been held by the Company in its own name.

xv. According to the information and explanations given to us, the Company has given guarantee for loans taken by its subsidiaries from Banks and Financial Institutions, the terms and conditions thereof in our opinion are not prima facie prejudicial to the interest of the Company.

xvi. Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

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 Company has not used funds raised on short-term basis for long term purposes.

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

xix. According to the information and explanations given to us and the records examined by us, no debentures were issued by the Company during the year.

xx. The Company has not raised any money through public issue during the year.

xxi. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Kanu Doshi Associates

Chartered Accountants

Firm Registration No. 104746W

Jayesh Parmar

Partner Membership No.45375

Place : Mumbai Date : April 22, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Binani Industries Limited as at March 31, 2010 and also the Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

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

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

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

v. Based on the written representations received from the directors, we report that none of the directors are disqualified as on March 31, 2010 from being appointed as directors in terms of Section 274 (1) (g) of the Companies Act, 1956.

5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant Accounting Policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010.

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

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

Annexure referred to in paragraph 3 of our report of even date to the Members of Binani Industries Limited.

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

b) All fixed assets have not been physically verified by the management during the year, but, there is a regular programme of verification which in our opinion, is reasonable having regards to the size of the Company and the nature of its assets. We are informed that no material discrepancies were noticed on such verification.

c) There has been no disposal of substantial part of fixed assets during the year, which may affect the going concern status of the Company.

ii The Company does not hold any inventories. Accordingly, clause (ii) of paragraph 4 of the Order is not applicable.

iii The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, the sub-clauses (a),(b),(c),(d),(e),(f) and (g) of clause (iii) are not applicable to the Company.

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, for the purchase of fixed assets and sale of services. On the basis of our examination of the books and records of the Company; we have not observed any continuing failure to correct major weaknesses in the internal control system.

v According to the information and explanation given to us, there are no particulars of contracts/arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 and hence sub-clause (b) of clause (v) is not applicable to the Company. vi The Company has not accepted any deposits from the public to which the directives issued by Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act and the rules framed there under apply. vii In our opinion, the internal audit functions carried out during the year by a firm of Chartered Accountants appointed by the management have been commensurate with the size of the Company and nature of its business.

viii The maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956 is not applicable to the Company.

ix a) According to the records of the Company, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year.

b) According to the records of the Company, there are no dues outstanding of Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service tax, Excise Duty, Cess on account of any dispute, other than the following:

Name of the Statute Nature of Dues Period to which the amount relates (A.Y)

Income Tax Act, 1961 Income Tax 1996-97

Name of the Amount Rs. in Lakhs Forum where dispute is Statue pending

Income Tax Act, 1961 344.45 Assessing Officer

x The Company’s accumulated losses at the end of the financial year are less than fifty per cent of its net worth and it has not incurred cash loss both in the current year and in the immediately preceding financial year.

xi Based on the examination of the records of the company and the information and explanation given to us we are of the opinion that the Company has not defaulted in repayment of dues to any banks. The Company has not taken any loan from financial institution or issued debentures.

xii According to the information and explanations given to us and based on the documents and records produced to us, 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 and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/mutual benefit/societies.

xiv In our opinion and according to information and explanation given to us, the Company has invested temporary surplus funds in mutual funds. According to the information and explanation given to us proper records have been maintained of the transactions and contracts and timely entries have been made therein. The mutual funds and the shares of its subsidiaries have been held by the company in its own name.

xv According to the information and explanations given to us, the Company has given guarantee for loans taken by its subsidiaries from Banks and Financial Institutions, the terms and conditions thereof in our opinion are not prima facie prejudicial to the interest of the Company.

xvi Based on the information and explanation given to us by the management, the Company has not taken any term loan during the year.

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 Company has not used funds raised on short-term basis for long term purposes.

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

xix According to the information and explanations given to us and the records examined by us, no debentures were issued by the Company during the year.

xx The Company has not raised any money through public issue during the year.

xxi According to the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Kanu Doshi Associates

Chartered Accountants

JAYESH PARMAR

Partner

Membership No. 45375

Firm Registration No. 104746W

Place : Mumbai

Date : 23rd April, 2010

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