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Auditor Report of Golden Tobacco Ltd.

Mar 31, 2018

INDEPENDENT AUDITOR''S REPORT

The Members of

GOLDEN TOBACCO LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Golden Tobacco Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2018, the Statement of Profit and Loss including other comprehensive income, Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards (Ind AS) 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 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 conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

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

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2018;

(ii) in the case of the Statement of Profit and Loss, of the loss including other comprehensive income of the Company for the year ended on that date;

(iii) in the case of the Statement of Changes of Equity, of the changes in equity for the year ended on that date and (iv) in the case of the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

Emphasis of Matter:

Without qualifying, we draw attention regarding excess Managerial Remuneration of " 22.27 Lakhs paid for the period from September 27, 2015 to September 12, 2016 for which the Company has made necessary application to the Central Government for its approval. The management, as explained, is confident of receiving the same in due course.

Other Matter:

Opening balances have been considered based on the audited financial statements prepared under previous Generally Accepted Accounting Practices (Previous GAAP) issued by the predecessor auditor whose un-qualified audit report dated May 29, 2017 have been furnished to us. The differences arising from transition from previous GAAP to Ind AS have been derived from such audited financial 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 of India in terms of sub-section (11) of section 143 of the Act, we give in the ''Annexure A'' a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

i. 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.

ii. 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.

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

iv. 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.

v. As required by Section 143 (3) of the Act with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give in ''Annexure B'' a separate report on the same.

vi. 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.

vii. 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:

(a) The Company has disclosed the impact of pending litigations on its financial position in the standalone financial statements (Refer Note 37);

(b) The Company did not have any long-term contracts including derivative contracts for which there are any material foreseeable losses and

(c) There were no amounts, including unpaid dividend declared in the year 1994-95 of " 71.15 Lakhs (based on the expert opinion obtained in this regard) which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.

	For BAGARIA and CO. LLP
	Chartered Accountants
	FRN- 113447W
	Vinay Somani
Place : Mumbai	Partner
Date : May 30, 2018	M. No. 143503

"Annexure A" (Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirements" section of our report of even date)

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

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

(i) a Flat having net carrying amount of ~ 32.09 Lakhs as on March 31, 2018 which, as explained by the Management, is in the wrongful possession of the family member of an ex- employee for a long time. The Company had already initiated legal proceedings against the said ex- employee and on his demise; the names of his family members were substituted. The Company is pursuing litigation so that the flat can be vacated at the earliest. We are, however, unable to comment as to when the said flat would be released to the Company and on the ultimate realisability of the carrying value thereof.

(ii) certain Plant and Equipment having original cost of ~ 1,765.70 Lakhs in 1994-95 and no carrying amount as at March 31, 2018 lying with third party which could neither be physically verified nor confirmed in view of dispute with the said party.

c) Based on the verification and examination of records, title deeds of the immovable properties are in the name of the Company. However, there are certain disputes on the Company''s immovable properties which have been summarised below :

Location of the Property	Nature	Carrying Value as at March 31,2018 in Lakhs	Remarks	Reference to Note no. in the accompanying financial statements
Vile Parle- Mumbai	Stock in Trade -Immovable Property	12.43	Title deeds is lying in Escrow account/ Attachment by the excise department and restrainment by Gujarat High Court	39(a)
Vadodara	Property, Plant and Equipment- Land and Building	426.99	Dispute with Gujarat Government regarding unutilised land	2(f)
Guntur	Stock in Trade -Immovable Property	0.00	Part of the land claimed by WAQF Board	39(d)
Flat at Mumbai	Property, Plant and Equipment- Land and Building	32.09	In the wrongful possession of the family member of an ex- employee for a long time	2(d)

2. The inventories of the Company have been physically verified by the management at reasonable intervals during the year. No material discrepancies were noticed on such physical verification.

3. During the year, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under section 189 of the Act. Therefore, Para 3 (iii) of the Order is not applicable to the Company.

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

5. No deposits within the meaning of directives issued by RBI (Reserve Bank of India) and Sections 73 to 76 or any other relevant provisions of the Act and rules framed thereunder have been accepted by the Company.

6. According to the information and explanations given to us, the maintenance of cost records has not been prescribed by the Central Government under Section 148 (1) of the Act for any of the products manufactured by the Company. Therefore, Para 3 (vi) of the Order is not applicable to the Company.

7. a) The Company is generally regular in depositing undisputed statutory dues including provident fund, employees'' state

insurance, income tax, sales-tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues applicable to the Company with the appropriate authorities except delays upto 52 days in payment of Excise Duty and amount involved " 395.21 Lakhs (being maximum amount) and Goods and Service Tax delays upto 22 days and amount involved " 606.76 Lakhs (being maximum amount). No undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for more than six months from the date they became payable except Excise Duty and interest thereon aggregating to " 1,515.07 Lakhs and Surcharge on VAT (State of Bihar)" 16.08 Lakhs (since paid " 13.35 Lakhs).

b) According to the records of the Company, there are no dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax which have not been deposited on account of any dispute except the following :

NAME OF THE STATUTE	NATURE OF DUES	PERIOD TO WHICH IT RELATES	DISPUTED UNPAID AMOUNT ('' IN LAKHS)	FORUM WHERE DISPUTE IS PENDING
The Kerala Value Added Tax Act, 2003	Sales Tax	2008-09 to 2011-12	83.97	Commissioner Sales Tax
The Gujarat Value Added Tax Act, 2003	Sales Tax	2013-14	11.50	Commissioner Sales Tax
The Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale therein Act, 1993	Entry Tax	2003 to 2011	1, 370.40	High Court- Bihar
The Tamilnadu Tax on Entry of Goods into Local Areas Act, 2001	Entry Tax	Various Years	303.59	Supreme Court
The Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007	Entry Tax	2006-07 to 2010-11	233.73	High Court/ Appellate Authorities
The Income Tax Act, 1961	Penalty	Assessment Year 1987-88, from 1991-92 to 1992-93 and from 1994-95 to 1995-96	1,62.11	Commissioner of Income Tax-Appeal
The Central Excise Act, 1944	Excise Duty	1979, 1997 and 1998	244.08	Supreme Court of India
		2000,2003 and 2004	79.85	High Courts
		1983,1994,1995,1999, 2002,2003,2007 and 2011	136.00	Customs, Excise, Service Tax Appellate Tribunal
		1979 to 2011	12305.04	Commissioner of Central Excise-Appeal

8. The Company has defaulted in repayment of dues to following Banks and financial institution :

Name of the Banks	Amount of Default in " (Principal and Interest) In Lakhs	Maximum period of Default
Canara Bank	2401.30	Upto 36 months
Allahabad Bank	442.70	Upto 30 months
Syndicate Bank	1217.41	Upto 36 months
State Bank of India (SBI) (State Bank of Bikaner and Jaipur merged with SBI)	960.62	Upto 39 months
Vijaya Bank	858.95	Upto 39 months
Indiabulls Housing Financial Services Limited	1,1260.49	Upto 60 months
Total	17141.47

The Company has not taken any loan from government or debenture holders during the year or in the recent past.

9. During the year, the Company has not raised any money by way of initial public offer or further public offer and term loan. Therefore, Para 3 (ix) of the Order is not applicable to the Company

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

11. In respect of excess managerial remuneration aggregating to " 22.27 Lakhs paid for the period from September 27, 2015 to September 12, 2016 for which the Company has made necessary application to the Central Government for its approval. The management, as explained, is confident of receiving the same in due course.

12. In our opinion, the Company is not Nidhi Company. Therefore, Para 3 (xii) of the Order is not applicable to the Company.

13. All transactions with the related parties are in compliance with section 177 and 188 of Act and the details have been disclosed in the Financial Statements (Refer note 40) as required by the applicable accounting standards.

14. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures or in the recent past.

15. The Company has not entered into any non-cash transactions with directors or persons connected with him under section 192 of the Act. Therefore, Para 3 (xv) of the Order is not applicable to the Company.

16. The Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934. Therefore, Para 3 (xvi) of the Order is not applicable to the Company.

	For BAGARIA and CO. LLP
	Chartered Accountants
	FRN- 113447W
	Vinay Somani
Place : Mumbai	Partner
Date : May 30, 2018	M. No. 143503

''Annexure B'' Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of Golden Tobacco Limited ("the Company") as of March 31, 2018 in conjunction with our audit of Company for the year ended on that date

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting 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 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 authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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.

Opinion

In our opinion, the Company has broadly, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 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 on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

	For BAGARIA and CO. LLP
	Chartered Accountants
	FRN- 113447W
	Vinay Somani
Place : Mumbai	Partner
Date : May 30, 2018	M. No. 143503

Mar 31, 2017

The Members of GOLDEN TOBACCO LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Golden Tobacco Limited (âthe Companyâ), which comprise the Balance Sheet as at 31^st March, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managementâs 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 (âthe Actâ) 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 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.

Auditorâs 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 financial statements are free from material misstatement.

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

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31^st March, 2017;

(ii) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date, and

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

Emphasis of Matter:

Without qualifying, we draw attention regarding appropriateness or otherwise of the preparation of these standalone financial statements, in view of the Company''s net worth had been entirely eroded. The Company has prepared these standalone financial statements on a going concern basis as the management is hopeful to turn around the Company''s business performance especially in the realty business segment where one of the project''s construction activities has commenced and is expected to be completed in stipulated time frame in due course. (Refer note no. 25.2 of the standalone financial statements for the year ended March 31, 2017).

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

(d) In our opinion, the aforesaid 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) As required by Section 143 (3) of the Act with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give in ''Annexure B'' a separate report on the same.

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

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 the standalone financial statements (Refer Note no. 25.1 (1.1) to the standalone financial statements for the year ended March 31, 2017);

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

(iii) There were no amounts which were required to be transferred, to the investor Education and Protection Fund by the Company during the year ended March 31, 2017.

(iv) The Company has disclosed in the financial statements as to holding as well as dealings in Specified Bank Notes (SBN) during the period from 8th November 2016 to 30^th December 2016 and these are in accordance with books of account maintained by the Company (Refer Note no. 13 of the standalone financial statements).

âAnnexure Aâ

(Referred to in paragraph 1 under âReport on Other Legal and Regulatory Requirementsâ section of our report of even date)

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

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

b) The Company has carried out physical verification of its fixed assets during the year. In our opinion, the frequency of verification is reasonable considering the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification except a Flat having Gross Book Value of Rs. 66,44,825 (Net Book Value: Rs. 3,373,283) as on March 31, 2017 which, as explained by the Management, is in the wrongful possession of the family member of an ex- employee for a long time. The Company had already initiated legal proceedings against the said ex- employee and on his demise; the names of his family members were substituted. The Company is pursuing litigation so that the flat can be vacated at the earliest. We are, however, unable to comment as to when the said flat would be released to the Company and on the ultimate reliability of the carrying value thereof.

c) Based on the verification and examination of records, title deeds of the immovable properties are in the name of the Company.

2. The inventories of the Company have been physically verified by the management at reasonable intervals during the year. No material discrepancies were noticed on such physical verification.

7. (a) The Company is generally regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues applicable to the Company with the appropriate authorities except delays up to 36 days in payment of Excise Duty and amount involved Rs. 6,68,00,000 (being maximum amount). No undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for more than six months from the date they became payable except Excise Duty and interest thereon aggregating to Rs. 12,32,14,466.

(b) According to the records of the Company, there are no dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax which have not been deposited on account of any dispute except the following :

NAME OF THE STATUTE	NATURE OF DUES	PERIOD TO WHICH IT RELATES	AMOUNT (IN Rs.)	FORUM WHERE DISPUTE IS PENDING
Tamilnadu General Sales Tax Act, 1959	Sales Tax	1993 to 1998	2,61,308	Sales Tax Appellate Tribunal- Coimbatore
The Kerala Value Added Tax Act, 2003	Sales Tax	2008-09 to 2011-12	84,97,126	Commissioner Sales Tax-Kochi
The Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale therein Act, 1993	Entry Tax	2003 to 2011	13,70,39,667	High Court- Bihar

The Tamilnadu Tax on Entry of Goods into Local Areas Act, 2001	Entry Tax	Various Year	3,03,59,060	Supreme Court
The Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007	Entry Tax	2006-07 to 2010-11	2,90,01,520	High Court/ Appellate Authorities
The Income Tax Act, 1961	Income Tax	1988-89 and 1992-93-1995-96	63,17,83,280	Income tax Appellate Tribunal/
The Income Tax Act, 1961	Income Tax	1991-92	28,70,55,343	Assessing Officer
The Central Excise Act, 1944	Excise Duty	1979, 1997 and 1998	3,08,33,015	Supreme Court of India
		2000,2003 and 2004	79,84,644	High Courts
		1983,1994, 1995,1999, 2002,2003, 2007 and 2011	68,95,73,363 39,89,96,358	Customs, Excise, Service Tax Appellate Tribunal
		1979 to 2011	1,23,05,03,265	Commissioner of Central Excise-Appeal
		1995 to 2011	145,01,69,472	Appellate Authority for Industrial and Financial reconstruction before abolition*

âfurther notice from the Excise Department in respect of approaching appropriate appellate authorities is awaited. Also refer note no. 25.1 (1.1) (b) (iii) of the standalone financial statements for the year ended March 31, 2017.

8. During the year, the Company has not defaulted in repayment of dues to Banks, financial institution, government or debenture holders except the following :

Name of the Banks	Amount of Default in Rs. (Principal and Interest)*	Period of Default - in Months
Canara Bank	25,22,71,114	Upto 24 months
Allahabad Bank	3,87,21,547	Upto 18 months
Syndicate Bank	10,36,20,596	Upto 24 months
State Bank of Bikaner and Jaipur	11,19,63,807	Upto 27 months
Vijaya Bank	11,09,66,124	Upto 27 months
Indiabulls Housing Financial Services Limited	146,30,42,801	Upto 48 months
Total	208,05,85,989

âPlease refer note no. 25.7 to the standalone financial statements for the year ended March 31, 2017

9. During the year, the Company has not raised any money by way of initial public offer or further public offer and term loan. Therefore, Para 3 (ix) of the Order is not applicable to the Company.

11. In respect of excess managerial remuneration aggregating to Rs. 22,27,312 paid for the period from September 27, 2015 to September 12, 2016, the Company has made necessary application to the Central Government for its approval. The Management, as explained, is confident of receiving the same in due course.

12. In our opinion, the Company is not Nidhi Company. Therefore, Para 3 (xii) of the Order is not applicable to the Company.

13. All transactions with the related parties are in compliance with section 177 and 188 of Act and the details have been disclosed in the Financial Statements (Refer note no. 25.10 to the standalone financial statements for the year ended March 31, 2017) as required by the applicable accounting standards.

14. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures or in the recent past.

16. The Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934. Therefore, Para 3 (xvi) of the Order is not applicable to the Company.

âAnnexure Bâ

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

We have audited the internal financial controls over financial reporting of Golden Tobacco Limited (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

Auditorsâ Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting 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 judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

Meaning of Internal Financial Controls Over Financial Reporting

(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

Opinion

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

For LODHA & CO.

Chartered Accountants

Firm Registration No. 301051E

R. P. Baradiya

Place : Mumbai Partner

Date : May 29, 2017 Membership No. 44101

Mar 31, 2016

Report on the Standalone Financial Statements

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

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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 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

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31^st March, 2016;

(ii) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date, and

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

Emphasis of Matter:

Without qualifying, we draw attention to the following:

1 (a) Hon''ble Supreme Court vide its order dated May 12, 2016 on the SLP filed by the Income Tax Department (Department) inter-alia held that :

(i) the scheme sanctioned by the Board for Industrial and Financial Reconstruction (BIFR) was over on March 31, 2011 and hence, the Company was out of its purview. Accordingly, the Modified Draft Rehabilitation Scheme filed by the Company is not maintainable.

(ii) the Department shall be entitled to take steps for attachment and sale of Company''s properties including Vile Parle Land against the disputed principal amount. In respect of waiver of interest and penalties, the same would be decided by the BIFR. However, such sale shall be subject to payment of undisputed excise demands and the rights of the secured creditors in respect of the mortgaged properties.

(iii) The Memorandum of Understating entered with M/s Sheth Developers Pvt. Ltd. and Suraksha Realty Ltd. in respect of its Vile Parle property loses its legal force and no right would accrue under it.

(Also Refer note no. 25 (1) (1.1) (b), 25 (5)(a) and 25 (9) (a) of the standalone financial statements for the year ended March 31, 2016)

2. The appropriateness or otherwise of the preparation of these standalone financial statements on a going concern basis, in view of the Company''s net worth having been entirely eroded. The Company has however, prepared the financial statements on a going concern basis as the management is hopeful to turn around the Company''s business performance in due course on getting necessary approval from BIFR for a fresh reference proposed to be filed shortly (Also Refer note no. 25 (5) of the standalone financial statements for the year ended March 31, 2016).

Report on Other Legal and Regulatory Requirements

2. As required by Section 143 (3) of the Act with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, we give in ''Annexure B'' a separate report on the same.

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

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

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

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

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

(f) With respect to the 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 the standalone financial statements (Refer Note no. 25 (1) to the standalone financial statements for the year ended March 31, 2016);

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

iii. There were no amounts which were required to be transferred, to the investor Education and Protection Fund by the Company during the year ended March 31, 2016.

(Referred to in paragraph 1 under "Report on Other Legal and Regulatory Requirementsâ section of our report of even date)

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

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

b) The Company has carried out physical verification of its fixed assets during the year. In our opinion, the frequency of verification is reasonable considering the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification except a Flat having Gross Book Value of'' 66,44,825 (Net Book Value: '' 35,45,971) as on March, 2016 which, as explained by the Management, is in the wrongful possession of the family member of an ex- employee for a long time. The Company had already initiated legal proceedings against the said ex- employee and on his demise; the names of his family members were substituted. The Company is pursuing litigation so that the flat can be vacated at the earliest. We are, however, unable to comment as to when the said flat would be released to the Company and on the ultimate realisability of the carrying value thereof.

c) Based on the verification and examination of records, title deeds of the immovable properties are in the name of the Company.

2. The inventories of the Company have been physically verified by the management at reasonable intervals during the year. No material discrepancies were noticed on such physical verification.

7. (a) The Company is generally regular in depositing undisputed statutory dues including provident fund, employees'' state insurance, income tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and any other material statutory dues applicable to the Company with the appropriate authorities except delays up to 30 days in payment of Excise Duty and amount involved Rs.2,66,00,000 (being maximum amount). No undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for more than six months from the date they became payable except Excise Duty and interest thereon aggregating to Rs.11,41,29,466.

NAME OF THE STATUTES	NATURE OF DUES	PERIOD TO WHICH IT RELATES	AMOUNT (IN Rs.)	FORUM WHERE DISPUTE IS PENDING
Tamilnadu General Sales Tax Act, 1959	Sales Tax	1993-98	261,308	Sales Tax Appellate Tribunal- Coimbatore
The Kerala Value Added Tax Act, 2003	Sales Tax	2008-09 to 2009-10	10,79,541	Commissioner Sales Tax-Kochi
The Bihar Tax on Entry of Goods into Local Areas for Consumption, Use or Sale therein Act, 1993	Entry Tax	2003 to 2011	13,70,39,667	High Court- Bihar

NAME OF THE STATUTES	NATURE OF DUES	PERIOD TO WHICH IT RELATES	AMOUNT (IN Rs.)	FORUM WHERE DISPUTE IS PENDING
The Tamilnadu Tax on Entry of Goods into Local Areas Act, 2001	Entry Tax	Various Year	3,03,59,060	Supreme Court
The Uttar Pradesh Tax on Entry of Goods into Local Areas Act, 2007	Entry Tax	2007-08 to 2010-11	2,57,33,561	Joint Commissioner Sales Tax
The Income Tax Act, 1961	Income Tax	1984-85	21,90,74,919	Income tax Appellate Tribunal/ Bombay High Court
		1984-85 to 1988-89, 1991-92 to 1995-96 2001 -02, 2005-06, 2007-08 and 2008-09	792,06,37,930	Income Tax Appellate Tribunal
		1991-92	2,25,25,577	Assessing Officer
		1978 to 1984	2,02,37,358	Bombay High Court
Central Excise Act, 1944	Excise Duty	1979, 1997 and 1998	421,361	Supreme Court of India
		2000,2003 and 2004 1986 and 1999-2002 1983,1994,1995,1999, 2002,2003,2007 and 2011	3,98,39,304 121,55,25,379 39,89,96,358	High Courts High Court, Guwahati Customs, Excise, Service Tax Appellate Tribunal
		1979 to 2011	122,56,64,131	Commissioner of Central Excise-Appeal
		1995 to 2011	145,01,69,472	Appellate Authority for Industrial and Financial reconstruction

8. During the year, the Company has not defaulted in repayment of dues to Banks, financial institution, government or debenture holders except the following :

Name of the Banks	Amount of Default in Rs. (Principal and Interest)*	Period of Default - in Months
Canara Bank	21,00,57,826	Up to 12 months
Allahabad Bank	3,40,31,003	Up to 6 months
Syndicate Bank	8,72,75,786	Up to 12 months
State Bank of Bikaner and Jaipur	9,46,13,602	Up to 15 months
Vijaya Bank	9,44,01,236	Up to 15 months
Indiabulls Housing Financial Services Limited	1 26,12,42,862	Up to 36 months
Total	178,16,22,315

*refer note no. 25 (6) to the standalone financial statements for the year ended March 31, 2016

9. The Company has utilized the term loan taken from a bank for the purposes for which it was raised. Further the Company has not raised any money by way of initial public offer or further public offer during the year or in the recent past.

11. In respect of managerial remuneration paid or provided during the year, the Company has made necessary application to the Central Government for its approval. The management as explained is confident of receiving the same in due course.

12. In our opinion, the Company is not Nidhi Company. Therefore, Para 3 (xii) of the Order is not applicable to the Company.

13. All transactions with the related parties are in compliance with section 177 and 188 of Act and the details have been disclosed in the Financial Statements (Refer note No.25 (10) to the standalone financial statements for the year ended March 31, 2016) as required by the applicable accounting standards.

14. During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures or in the recent past.

16. The Company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934. Therefore, Para 3 (xvi) of the Order is not applicable to the Company.

For LODHA & CO.

Chartered Accountants

Firm Registration No. 301051E

R. P. Baradiya

Place : Mumbai Partner

Date : May 23, 2016 Membership No. 44101

Mar 31, 2015

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

Managements 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 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.

Auditors Responsibility

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

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

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

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

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

(ii) in the case of the Statement of Profit and Loss, of the loss of the Company for the year ended on that date, and

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

Emphasis of Matter:

Without qualifying, we draw attention to the following:

(a) the appropriateness or otherwise of the preparation of these standalone financial statements on a going concern basis, in view the Company's net worth having been entirely eroded as also the restrictions placed by the Hon'ble Supreme Court to deal with the properties of the Company and also by the Gujarat High Court particularly in respect of Vile Parle property. The Company has however, prepared the financial statements on a going concern basis as the management is hopeful to turn around the Company's business performance and expects favourable decision by the aforesaid courts and consequential early finalization of Modified Draft Rehabilitation Scheme (MDRS), inter alia, providing for early disposal of Company's surplus properties. (Refer note no. 25.(10) of the standalone financial statements)

(b) The Company's Revised MDRS submitted to the Monitoring Agency for their consideration, which is pending and consequential impact, if any, including provisions/reliefs and payment of interest on various advances taken by the Company, etc. as and when the scheme is sanctioned (Refer note no. 25(1 )(1.1) (c) of the standalone financial statements).

(c) There is substantial diminution in the carrying value of certain long term investments, particularly in respect of quoted investments- the diminution being Rs. 2,12,32,345 (Previous year Rs. 3,55,10,361) as compared to its market value which, in the opinion of the management is temporary and no provisioning is considered necessary at this stage as the same are long term and of strategic in nature (Refer note no.9.1 of the standalone financial statements).

Report on Other Legal and Regulatory Requirements

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

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss, and the 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) On the basis of the written representations received from the directors as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to 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 no.25(1) (1.1) (a) to (e) and 25 (7) (a) of 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.

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

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF GOLDEN TOBACCO LIMITED ON THE STANDALONE FINANCIAL STATEMENTS

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

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

(b) The Company has carried out physical verification its fixed assets during the year. In our opinion, the frequency of verification is reasonable considering the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification except a Flat having Gross Book Value of Rs. 66,44,825 (Net Book Value: Rs. 37,27,501) as on March, 2015 which, as explained by the Management, is in the wrongful possession of the family member of an ex-employee for a long time. The Company had already initiated legal proceedings against the said ex- employee and on his demise; the names of his family members were substituted. The Company is pursuing litigation so that the flat can be vacated at the earliest. We are, however, unable to comment as to when the said flat would be released to the Company and on the ultimate realisability of the carrying value thereof.

2. (a) The inventories of the Company at its major locations have been physically verified by the management at reasonable intervals during the year. Inventory lying with third parties and in-transit as on 31st March, 2015 have been verified by the management with reference to confirmation or statement of account or correspondence obtained from the third parties and /or subsequent receipt of inventory.

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

(c) The Company has maintained proper records of inventory and the discrepancies noticed between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. During the year, 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 Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased and sold are of the special nature in respect of which suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control systems commensurate with the size of the Company and nature of its business for purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the aforesaid internal control systems.

5. In our Opinion and according to the information and explanations given to us, the Company has not accepted any public deposits within the meaning of Section 73 to 76 or any other relevant provisions of the Act and rules framed thereunder.

6. On the basis of records produced, we are of the opinion that prima facie, the cost records and accounts prescribed by the Central Government under Section 148 (1) of the Act have been maintained. However, we are not required to and thus have not carried out any detailed examination of such accounts and records, with a view to ascertain whether these are accurate and complete.

7. (a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employee's State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other material statutory dues applicable to the Company with the appropriate authorities. No undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the records of the Company, there are no dues of Income Tax, Sales Tax, Service tax, Duty of Customs, Wealth Tax, Duty of Excise, Value Added Tax, Cess which have not been deposited on account of any dispute except the following :

NAME OF THE STATUTES NATURE OF PERIOD TO WHICH DUES IT RELATES

Tamilnadu General Sales Tax 1993-98 Sales Tax Act, 1959

The Kerala Value Sales Tax 2008-09 to Added Tax Act, 2003 2009-10

The Bihar Tax on Entry of Entry Tax 2003 to 2011 Goods into Local Areas for Consumption, Use or Sale therein Act, 1993

The Tamilnadu Tax on Entry Entry Tax Various Year of Goods into Local Areas Act, 2001

The Uttar Pradesh Tax on Entry Tax Various Years Entry of Goods into Local Areas Act, 2007

The Income Tax Act, 1961 Income Tax 1984-85 to 2007-08

1984-85 to 1986- 87 & 2008-09

1987- 88 to 1991-92

Central Excise Act, 1944 Excise Duty 1979,1986,1997 and 1998

2000,2003 and 2004

1983,1994,1995,1999,

2002,2003,2007 and 2011

1979 to 2011

NAME OF THE STATUTES AMOUNT FORUM WHERE (IN Rs.) DISPUTE IS PENDING

Tamilnadu General 261,308 Sales Tax Sales Tax Act, 1959 Appellate Tribunal- Coimbatore

The Kerala Value 913,736 Commissioner Sales Added Tax Act, 2003 Tax- Kochi

The Bihar Tax on Entry of 13,70,39,667 High Court-Bihar Goods into Local Areas for Consumption, Use or Sale therein Act, 1993

The Tamilnadu Tax on Entry 3,03,59,060 Supreme Court of Goods into Local Areas Act, 2001

The Uttar Pradesh Tax on 70,13,122 Joint Commissioner Entry of Goods into Local Sales Tax Areas Act, 2007

The Income Tax Act, 1961 1,149,564,577 Income tax Appellate Tribunal/ Bombay High Court

829,269,559 Income Tax Commissioner (Appeals)

102,557,479 Assessing Officer

Central Excise Act, 1944 29,58,17,161 Supreme Court of India

3,39,67,596 High Court, Mumbai

39,83,07,219 Customs, Excise, Service Tax Appellate Tribunal

10,138,752 Commissioner of Central Excise

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

8. The accumulated losses of the Company at the end of the financial year are more than 50% of its net worth. The Company has incurred cash losses during the current financial year as well as in the immediately preceding financial year.

9. In our opinion and according to the information and explanations given to us and based on the documents and records produced before us there has been no default in repayment of dues to banks except for a delay ranging from 3-90 days of v69,500,000 towards principal and Interest of Rs. 1,04,76,746. There are no dues to financial institutions or debenture holders.

10. According to the information and explanations given to us, the terms and conditions on which the Company had given guarantee for loans taken by others from banks and financial institutions are, prima facie, not prejudicial to the interest of the Company.

11. Based on the information and explanations given to us by the management, the Company has not obtained any term loans during the year. Therefore, the provisions of the clause 4 (xi) of the Order are not applicable to the Company.

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

For LODHA & CO. Chartered Accountants Firm Registration No. 301051E R. P. Baradiya Place : Mumbai Partner Date : May 25, 2015 Membership No. 44101

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with the 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 the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

In our opinion and to the best of our information and according to the explanations given to us, the 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, 2014;

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

(c) in the case of the Cash Flow Statement without qualified of the cash flows for the year ended on that date.

Emphasis of Matter:

Without qualifying, we draw attention of the following:

(a) The Company''s Revised Modified Draft Rehabilitation Scheme (MDRS) submitted to the BIFR and consequential recording of reliefs etc. as and when the scheme is sanctioned (Refer note no. 25(1)(1.1) (e)).

(b) There is substantial diminution in the carrying value of certain long term investments, particularly in respect of quoted investments- the diminution being Rs. 3,55,10,361 as compared to its market value which, in the opinion of the management is temporary and no provisioning is considered necessary at this stage as the same are long term and of strategic in nature (Refer note no.9.1).

(c) Overdue advances of Rs. 9,99,70,868 and an investment of Rs. 2,31,20,000 in Western Express Industries Limited (WEIL), a wholly owned subsidiary company which has accumulated losses far in excess of its paid up capital and reserves & surplus.

As explained, the management is hopeful of recovering/realizing the same in due course of time in view of expected revival of activities/ developments in the said subsidiary (Refer note no. 10.1).

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

ANNEXURE REFERRED TO IN POINT 1 UNDER THE PARAGRAPH "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF GOLDEN TOBACCO LIMITED (''THE COMPANY'')

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

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

(b) During the year, the management has physically verified the fixed assets, except certain Plant & Machineries having Gross Book Value of Rs. 17,65,70,450 crores (Net Book Value: Nil) as on March 31, 2014 lying with third party which could neither be physically verified nor confirmed in view of dispute with the said party. The verification was in accordance with a phased programme which, in our opinion, is considered reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on such verification have been dealt with in the books of account except a Flat having Gross Book Value ofRs. 66,44,825 (Net Book Value: Rs. 39,18,323) as on March, 2014 which, as explained by the Management, is in the wrongful possession of the family member of an ex- employee for a long time. The Company had already initiated legal proceedings against the said ex- employee and on his demise; the names of his family members were substituted. The Company is pursuing litigation so that the flat can be vacated at the earliest. We are, however, unable to comment as to when the said flat would be released to the Company and on the ultimate realisability of the carrying value thereof.

(c) During the year, no substantial part of the fixed assets has been disposed off by the Company.

2. (a) The inventories of the Company at its major locations have been physically verified by the management at reasonable intervals during the year. Inventory lying with third parties and in-transit as on 31st March, 2014 have been verified by the management with reference to confirmation or statement of account or correspondence obtained from the third parties and /or subsequent receipt of inventory.

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

(c) The Company has maintained proper records of inventory and the discrepancies noticed between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. The Company has not taken / granted any loans, secured or unsecured, from / to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that purchase of certain items of fixed assets and inventory are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. 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 we have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under the said Section have been so entered .

b) In our opinion, and according to the information and explanations given to us, there are no transactions made in pursuance of contracts and arrangements referred to in (a) above exceeding the value of Rs. 5 lacs with any party during the year.

6. The Company has not accepted any fixed deposits from the public within the meaning of Sections 58A, 58AA or any other relevant provisions of the Act and rules framed thereunder.

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

8. On the basis of records produced, we are of the opinion that prima facie, the cost records and accounts prescribed by the Central Government under Section 209 (1) (d) of the Act have been maintained. However, we are not required to and thus have not carried out any detailed examination of such accounts and records, with a view to ascertain whether these are accurate and complete.

9. (a) According to the information and explanations given to us and according to the books and records as produced and examined by us and also considering the Revised Modified Draft Rehabilitation Scheme filed (awaiting sanction), the 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 material statutory dues as applicable have generally been regularly deposited by the Company during the year with the appropriate authorities and there were no arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

(b) According to the records of the Company and the information and explanations given to us by the management, there are no amounts in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute except for the amounts mentioned below:

NAME OF THE STATUTES NATURE OF PERIOD TO WHICH AMOUNT DUES IT RELATES (IN )

Tamilnadu General Sales Tax 1993-98 261,308 Sales Tax Act, 1959

The Uttar Pradesh Value Sales Tax 2007-08 & 2008-09 10,63,182 Added Tax Act, 2008

The Kerala Value Sales Tax 2009-10 10,32,670 Added Tax Act, 2003

The Bihar Tax on Entry Entry Tax 2003-2011 13,70,39,667 of Goods into Local Areas for Consumption, Use or Sale therein Act, 1993

The Tamilnadu Tax on Entry Tax Various Year 3,03,59,060 Entry of Goods into Local Areas Act, 2001

The Entry Tax Act, 1976 - Entry Tax 2006-2013 44,19,012 Madhya Pradesh

The Uttar Pradesh Tax on Entry Tax Various Year 60,66,890 Entry of Goods into Local Areas Act, 2007

The Income Tax Act, 1961 Income Tax 1984-85 to 1,148,381,207 2007-08

1984-85 to 86-87 & 829,269,559 2008-09

1987-88 to 102,557,479 1991-92

Central Excise Act, 1944 Excise Duty 1979,1986,199 29,58,17,161 and 1998 2000,2003 and 2004 5,12,64,858

1983,1994,1995, 1999, 542,52,96,632 2002,2003,2007 and 2011 1979 to 2011 10,876,096

NAME OF THE STATUTES FORUM WHERE DISPUTE IS PENDING

Tamilnadu General Sales Tax Appellate Tribunal- Coimbatore Sales Tax Act, 1959

The Uttar Pradesh Value Sales Tax Appellate Tribunal Added Tax Act, 2003

The Kerala Value Commissioner Sales Tax- Kochi Added Tax Act, 2003

The Bihar Tax on Entry High Court- Bihar of Goods into Local Areas for Consumption, Use or Sale therein Act, 1993

The Tamilnadu Tax on Supreme Court Entry of Goods into Local Areas Act, 2001

The Entry Tax Act, 1976 Supreme Court Madhya Pradesh

The Uttar Pradesh Tax on Joint Commissioner Sales Tax Entry of Goods into Local Areas Act 2007

The Income Tax Act 1961 Income tax Appellate Tribunal

Income Tax Commissioner (Appeals) Assessing Officer

Central Excise Act 1944 Supreme Court of India

High Court, Mumbai

Customs, Excise, Service Tax Appellate Tribunal

Commissioner of Central Excise

10. The accumulated losses of the Company at the end of the financial year are more than 50% of its net worth. The Company has incurred cash losses during the current financial year as well as in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks.

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

13 As the Company is not a chit fund or a nidhi /mutual benefit fund/society, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14 As the Company is not dealing or trading in shares, securities, debentures and other investments, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loan was applied for the purposes for which it was obtained.

17. According to the information and explanations given to us and on overall examination of the Cash flow statement and balance sheet of the Company and on the basis of financial position at the year end, the funds raised on short-term basis have not been used for long term investment except for long term borrowing of Rs. 81,01,28,183 taken in the past and invested in long-term assets, have now become overdue.

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

19. The Company has not raised any money by way of issue of debentures.

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

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

For LODHA & COMPANY Chartered Accountants Firm Registration No. 301051E

R. P. Baradiya Place : Mumbai Partner Date : May 27, 2014 Membership No. 44101

Mar 31, 2013

Report on the Financial Statements

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

Managements'' Responsibility for the Financial Statements

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

Auditors ''Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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, 2013;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company 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 Matter:

Without qualifying, we draw attention to the following:

(a) There is substantial diminution in the carrying value of certain long term investments, particularly in respect of quoted investments- the diminution being Rs. 3,45,31,403 as compared to its market value which in the opinion of the management, is temporary and no provisioning is considered necessary at this stage as the same are long term and of strategic in nature. (Refer note no.9.1)

b) The Company has given an advances of Rs. 9,94,60,043 and made an investment of Rs. 2,31,20,000 in Western Express Industries Limited (WEIL), a wholly owned subsidiary company which has accumulated losses far in excess of its paid up capital and reserves & surplus. As explained, the management is hopeful of recovering/realizing the same in due course of time in view of expected revival of activities/development in the said subsidiary. (Refer note no. 10.1)

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF THE GOLDEN TOBACCO LIMITED

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

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

(b) During the year, the management has physically verified the fixed assets in accordance with a phased programme which, in our opinion, is considered reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on such verification have been dealt with in the books of account except a Flat-Gross Block of Rs. 66,44,825 (Net Block Rs. 40,34,532) as on 31st March, 2013 which, as explained by the Management, is in the wrongful possession of the family member of an ex- employee fo r a long time. The Company had already initiated legal proceedings against the said ex- employee and on his demise, the names of his family members were substituted. The Company is pursuing litigation so that flat can be vacated at the earliest. We are, however, unable to comment as to when the said flat would be released to the Company and on the ultimate realisability of the carrying value thereof.

(c) During the year, no substantial part of the fixed assets has been disposed off by the Company.

2. (a) The inventories of the Company at its major locations have been physically verified by the management at reasonable intervals during the year. Inventory lying with third parties and in-transit as on 31st March, 2013 have been verified by the management with reference to confirmation or statement of account or correspondence obtained from the third parties and /or subsequent receipt of inventory.

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

(c) The Company has maintained proper records of inventory and the discrepancies noticed between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. The Company has not taken or granted any loans, secured or unsecured, from / to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that purchase of certain items of fixed assets and inventory are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods. 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 we have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under the said Section have been so entered .

b) In our opinion, and according to the information and explanations given to us, there are no transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lacs with any party during the year.

6. The Company has not accepted any fixed deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Act and rules framed thereunder.

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

8. On the basis of records produced, we are of the opinion that prima facie, the cost records and accounts prescribed by the Central Government under Section 209 (1) (d) of the Act have been maintained. However, we are not required to and thus have not carried out any detailed examination of such accounts and records, with a view to ascertain whether these are accurate and complete.

9. (a) According to the information and explanations given to us and according to the books and records as produced and examined by us and also considering the Modified Draft Rehabilitation Scheme filed (awaiting sanction), the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees ''State In surance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable have generally been regularly deposited by the Company during the year with the appropriate authorities and there were no arrears as at 31st March, 2013 for a period of more than six months from the date they became payable.

*stay granted by respective forums

10. The accumulated losses of the Company at the end of the financial year are more than 50% of its net worth. The Company has incurred cash losses during the current financial year as well as in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks.

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

13 As the Company is not a chit fund or a nidhi /mutual benefit fund/society, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14 As the Company is not dealing or trading in shares, securities, debentures and other investments, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loan was applied for the purposes for which it was obtained.

17. According to the information and explanations given to us and on overall examination of the Cash flow statement and balance sheet of the Company and on the basis of financial position at the year end, the funds raised on short-term basis have not been used for long term investment except for long term borrowing of Rs. 76,01,14,418 taken in the past and invested in long-term assets, have now become short-term as the same are falling due within one year.

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

19. The Company has not raised any money by way of issue of debentures.

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

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

For LODHA & COMPANY

Chartered Accountants

Firm Registration No. 301051E

A.M. Hariharan

Place: Mumbai Partner

Date : May 23, 2013 Membership No. 38323

Mar 31, 2012

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

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

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

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

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

(b) In accordance with the consistent practice followed by the Company, no provision has been made in the accounts in respect of the estimated total liability for future payment of gratuity of Rs. 4,87,29,868 determined on the basis of actuarial valuation as on March 31,2012. The accounting method of providing gratuity liability as and when due is not in accordance with the accounting method prescribed in Accounting Standard 15 of "Accounting for Employee Benefits" issued by Companies (Accounting Standards) Rules, 2006. (Refer Note 7.1 in notes to financial statements);

(c) Certain Trade Receivables and Loans & Advances aggregating to Rs. 6,05,07,890 which, have been classified by the Management as 'considered good' are, in our opinion, doubtful of recovery and are therefore required to be provided for as doubtful debts. (Refer Note 12.1 and 14.1 in notes to financial statements);

(d) Subject to what is stated in paragraph 4(b) above, 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;

(e) 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;

(f) Subject to what is stated in paragraph 4(b) above, 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 prescribed by Companies (Accounting Standards) Rules, 2006, to the extent applicable;

(g) On the basis of written representations received from Directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2012 from being appointed as a Director of the Company in terms of Section 274(1)(g) of the Act;

(h) We further report that, without considering the matter referred to in clause 1(b) of the Annexure to this report, the effect of which could not be determined, had the observations made by us in paragraph 4(b) and 4(c) above been considered, the loss for the year would have been Rs. 39,97,15,410 (as against reported loss figure ofRs.29,04,77,652), accumulated losses would have been Rs. 1,04,01,96,524(as against reported figure of Rs. 93,09,58,766), Assets would have been Rs. 3,44,50,50,289(as against reported figure of Rs3,50,55,58,179) and Equity and Liabilities would have been Rs. 3,55,42,88,047(as against reported figure ofRs3,50,55,58,179);

(i) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements subject to our comments in paragraph 4(h) above and read together with Note 25.1 regarding contingent liabilities, Note 10.1 regarding amount invested in and advances due from a subsidiary Company, Note 9.1 regarding carrying value of certain long term investments and other accompanying notes give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of Auditors' Report of even date on the financial statements for the year ended and as at 31st March, 2012 of Golden Tobacco Limited)

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

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

(b) During the year, the management has physically verified the fixed assets generally in accordance with a phased programme which, in our opinion needs to be strengthen to be reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on such verification have been dealt with in the books of account except a Flat-Gross Block ofRs.66,44,825 (Net Block Rs.41,50,744) as on 31st March, 2012 which, as explained by the Management, is in the wrongful possession of the family member of an ex- employee for a long time. The Company has already initiated legal proceedings against the said ex- employee and on his demise, the names of his family members were substituted. The Company is rigorously following litigation so that flat can be vacated at the earliest. We are, however, unable to comment as to when the said flat would be released to the Company and on the ultimate realisability of the carrying value thereof (Refer Note no. 8 (d) of the financial statements).

(c) During the year, no substantial part of the fixed assets has been disposed off by the Company.

2. (a) The inventories of the Company at all its locations have been physically verified by the management at reasonable intervals during the year. Inventory lying with third parties and in-transit as on 31st March, 2012 have been verified by the management with reference to confirmation or statement of account or correspondence obtained from the third parties and /or subsequent receipt of inventory.

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

(c) The Company has maintained proper records of inventory and the discrepancies noticed between the physical stocks and the book records were not material considering the operations of the Company and have been properly dealt with in the books of account.

3. The Company has not taken or granted any loans, secured or unsecured, from / to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanation given to us, having regard to the explanations that purchase of certain items of fixed assets and inventory are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. 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 we have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under the said Section 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 and arrangements referred to in (a) above and exceeding the value of Rs 5 lacs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any fixed deposits from the public within the meaning of Section 58A, 58AAorany other relevant provisions of the Act and rules framed thereunder.

7. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business with respect to coverage of area such as, human resource department, statutory dues and banks etc.

8. On the basis of records produced, we are of the opinion that prima facie, the cost records and accounts prescribed by the Central Government under Section 209 (1) (d) of the Act have been maintained. However, we are not required to and thus have not carried out any detailed examination of such accounts and records, with a view to ascertain whether these are accurate and complete.

9. (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, the 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 material statutory dues as applicable have generally been regularly deposited by the Company during the year with the appropriate authorities and there were no arrears as at 31st March, 2012 for a period of more than six months from the date they became payable.

(b) According to the records of the Company and the information and explanations given to us by the management, there are no amounts in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute except for the amounts mentioned below:

NAME OF THE NATURE OF PERIOD TO WHICH STATUTES DUES IT RELATES

Tamilnadu General Sales Sales Tax 1993-98 Tax Act, 1959

Employees'State E.S.I.C. Various Years Insurance Act, 1948

Entry Tax (Bihar) Entry Tax Various Years

Entry Tax (Madars) Entry Tax Various Year

Entry Tax - Madhya Pradesh Entry Tax Various Years

Entry Tax (Luknow) Entry Tax Various Year

Income Tax Act,1961 Income Tax Various Years

Central Excise Act, 1944 Excise Duty Various Years

NAME OF THE STATUTES AMOUNT FORUM WHERE (IN RS.) DISPUTED

Tamilnadu General Sales 6,88,531 Sales Tax Commissioner Tax Act,1959 (Appeals)

Employees' State Insurance Act,1948 19,17,978 Deputy Regional Officer

Entry Tax (Bihar) 13,70,39,667 High Court

Entry Tax (Madars) 3,03,59,060 Supreme Court

Entry Tax-Madhya Pradesh 44,19,012 Supreme Court

Entry Tax (Luknow) 68,66,890 Joint Commissioner Sales Tax

Income Tax Act,1961 74,40,52,749 Income tax Appellate Tribunal

84,42,41,328 Income Tax Commissioner (Appeals)

48,82,91,307 Assessing Officer

Central Excise Act,1944 30,17,57,160 Supreme Court

5,03,56,013 High Court

39,59,84,327 Customs, Excise, Service Tax Appellate Tribunal

2,63,74,237 Commissioner

10. The accumulated losses of the Company at the end of the financial year are more than 50% of its net worth after considering, interalia, the matters referred in para 4 (b) and 4(c) of the auditors' report and without considering the matters referred to in clause

1(b) herein above, the effect of which could not be determined. The Company has incurred cash losses during the current financial year as well as in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to banks and debenture holder.

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

13. As the Company is not a nidhi /mutual benefit fund/society, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14. As the Company is not dealing or trading in shares, securities, debentures and other investments, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loan was applied for the purposes for which it was obtained.

17. According to the information and explanations given to us and on an overall examination of the Cash Flow statement and Balance Sheet of the Company, in our opinion, the funds raised on short-term basis have, prima facie, not been used for long term investment.

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

19. The Company has not raised any money by way of issue of debentures.

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

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

For LODHA & CO.

Chartered Accountants

A. M. Hariharan

Partner

Place: Mumbai Membership No.38323

Dated: May 25,2012 Firm Registration No.: 301051E

Mar 31, 2010

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

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

3. As required by the Companies (AuditorÃs Report) Order, 2003 issued by the Central Government of India in terms of Section 227 (4A) of the Companies Act, 1956 (herein after referred to as the ÃActÃ),we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

(b) In accordance with the consistent practice followed by the Company, no provision has been made in the accounts in respect of the estimated total liability for future payment of gratuity of Rs. 11,21,23,631 determined on the basis of actuarial valuation. The accounting method of providing gratuity liability as and when due is not in accordance with the accounting method prescribed in Accounting Standard 15 of ÃAccounting for Employee BenefitsÃ issued by Companies (Accounting Standards) Rules, 2006. (Refer Note no.11(a) in Schedule ÃQÃ to the accounts);

(c) Certain Sundry Debtors and Loans & Advances aggregating to Rs.3,09,91,797 which have been classified by the management as Ãconsidered good are, in our opinion, doubtful of recovery and require to be provided for. (Refer Note no.7 in Schedule ÃQ Ãto the accounts).

(d) Subject to what is stated in paragraph 4(b) above, 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;

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

(f) Subject to what is stated in paragraph 4(b) above, in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards prescribed by Companies (Accounting Standards) Rules, 2006, to the extent applicable ;

(g) On the basis of written representations received from Directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director of the Company in terms of Section 274(1)(g) of the Act ;

(h) We further report that, without considering the matter referred to in clause 1(b) of the Annexure to this report, the effect of which could not be determined, had the observations made by us in paragraph 4(b) and 4(c) above been considered, the loss for the year would have been Rs.25,64,81,758 (as against reported loss figure of Rs.11,33,66,330), accumulated losses would have been Rs.44,47,63,067 (as against reported figure of Rs.30,16,47,639), current assets, loans & advances would have been Rs.255,26,25,130 (as against reported figure of Rs.258,36,16,927 and current liabilities would have been Rs.148,28,21,574(as against reported figure of Rs.137,06,97,943) ;

(i) We draw attention to Note no.15(a) regarding recognizing of Rs.18,57,70,353 as ÃOther IncomeÃ being the differential amount between fair market value on the date of conversion and the actual cost in respect of Land situated at Guntur, Eluru, Kanchikera, Chickpet and Martur at Andhra Pradesh and transferred from fixed assets to stock-in-trade.

(j) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements subject to our comments in paragraph 4(h) above and read together with Note no.2 regarding contingent liabilities and Note no.11(b) regarding amount invested in and advances due from Western Express Industries Limited , a subsidiary Company, Note no.24 regarding certain amount of remuneration payable to directors for which the Central Government approval is being obtained and other notes appearing in Schedule ÃQÃ of ÃSignificant Accounting Policies and Notes to accountsÃ and those appearing elsewhere in the accounts, give the information required by the Act, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March,2010 ;

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

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

ANNEXURE TO THE AUDITORS REPORT

(Referred to in paragraph 3 of AuditorsÃ Report of even date on the financial statements for the year ended and as on 31st March, 2010 of Golden Tobacco Limited)

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

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

(b) During the year, the management has physically verified the fixed assets in accordance with a phased programme which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. The discrepancies noticed on such verification have been dealt with in the books of account except a Building/Flat- Gross Block Rs.66,44,825 (Net Block Rs.43,83,159) which is under the custody of third party for a long time. In view of this, we are unable to comment as to when the said Flat would be released to the Company and on the ultimate realisability of the carrying value thereof (Refer Note no. D in Schedule ÃEÃ to the accounts).

(c) During the year, no substantial part of the fixed assets has been disposed off by the Company.

2. (a) The inventories of the Company at all its locations have been physically verified by the management at reasonable intervals during the year.

Inventory lying with third parties and in-transit as on 31st March, 2010 have been verified with reference to confirmation or statement of account or correspondence obtained from the third parties and /or subsequent receipt of inventory.

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

(c) The Company has maintained proper records of inventory and the discrepancies noticed between the physical stocks and the book records were not material considering the operations of the Company and have been properly dealt with in the books of account.

3. The Company has not taken or granted any loans, secured or unsecured, from / to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that purchase of certain items of fixed assets and inventory are of special nature for which suitable alternative sources do not exist for obtaining comparative quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. 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 we have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under the said Section have been so entered . (b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs. 5 Lakhs with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any fixed deposits from the public within the meaning of Section 58A, 58AA or any other relevant provisions of the Act and rules framed thereunder.

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

8. As per the information and explanations given to us and to the best of our knowledge, the Central Government has not prescribed the maintenance of cost records under Section 209(1)(d) of the Act for any of the products of the Company for the year under review.

9. (a) According to the information and explanations given to us and according to the books and records as produced and examined by us, the undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, EmployeesÃ State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable have generally been regularly deposited by the Company during the year with the appropriate authorities and there were no arrears as at 31st March, 2010 for a period of more than six months from the date they became payable.

(b) According to the records of the Company and the information and explanations given to us by the management, there are no amounts in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess that have not been deposited with the appropriate authorities on account of any dispute except for the amounts mentioned below :

NAME OF THE STATUTES URE OF DUES PERIOD TO AMOUNT FORUM WHERE DISPUTED

WHICH IT RELATES (IN RS.)

Tamilnadu General Sales Tax Act, 1959 Sales Tax 1993-98 6,88,531 Commissioner (Appeals)

Employees State Insurance Act, 194 ESIC Various Years 1,818,839 Deputy Regional Officer

Entry Tax (Various States) Entry Tax Various Years 165,875,886 High Court

Entry Tax - Madhya Pradesh Entry Tax Various Years 4,548,609 Supreme Court

Income Tax Act, 1961 Income Tax Various Years 1,587,428,126 Income tax Appellate Tribunal

5,893,404,418 Commissioner (Appeals)

9,18,06,199 Assessing Officer

Central Excise Act, 1944 Excise Duty Various Years 301,757,161 Supreme Court

50,356,013 High Court

327,024,952 Customs Excise Service Tax Appellate Tribunal

9,188,549 Upto Commissioner Level

1 0. The accumulated losses of the Company at the end of the financial year are more than 50% of its net worth after considering, interalia, the matters referred in para 4 (b) and 4(c) of the auditor report and without considering the matters referred to in clause 1(b) herein above, the effect of which could not be determined. The Company has incurred cash losses during the current financial year as well as in the immediately preceding financial year.

11. The Company has not defaulted in repayment of dues to financial institutions and banks.

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

13 As the Company is not a nidhi /mutual benefit fund/society, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

14 As the Company is not dealing or trading in shares, securities, debentures and other investments, the provisions of clause 4(xiv) of the Order are not applicable to the Company.

15. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are, prima facie, not prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanations given to us, the term loan was applied for the purposes for which it was obtained.

17. According to the information and explanations given to us and on an overall examination of the Cash Flow statement and Balance Sheet of the Company, in our opinion, the funds raised on short-term basis have, prima facie, not been used for long term investment.

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

19. According to the information and explanations given to us, securities have been created in respect of debentures privately placed with IFCI Ltd.

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

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

For LODHA & CO.

Chartered Accountants

A.M. Hariharan

Partner

Membership No.38323

Firm Registration No. : 301051E Place: New Delhi

Dated: 25th May, 2010

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