Auditor Report of Gujarat Craft Industries Ltd.

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in 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 of the assets of the Company and for preventing and detecting the 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 internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of 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 as adequate internal financial controls system over financial reporting and the 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 financial statements, give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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 does not have any pending litigations which would impact its financial position.

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

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

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF GUJARAT CRAFT INDUSTRIES LIMITED, ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2015

i. [a] Fixed Assets register is under compilation.

[b] We are informed by the management that they have verified the fixed assets during the year. However, in absence of proper fixed assets register material discrepancies if any, could not be noticed between physical verification and book records. Hence, the fixed assets as appearing in books of account are carried in financial statements.

ii. In respect of Inventories:

[a] As explained to us, the inventory have been physically verified during the year by the management. In respect of inventories lying with third parties, inventories have been confirmed by them. In our opinion, the frequency of verification is reasonable.

[b] In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

[c] The company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on such physical verification of inventory as compared to the book records.

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

iv. In our opinion and according to the information and explanations given to us, there exists an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and with regard to the sale of goods and services. On the basis of our examination of the books of accounts and other records, we are of the opinion that there is no major weakness in the internal control system in respect of these areas.

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

vi. As per the information and explanation given to us, the cost accounting records as prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 is not applicable to the company.

vii. [a] The Company is regular in depositing undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess and any other material statutory dues with the appropriate authorities applicable to it.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess and any other material statutory dues, outstanding statutory dues except for Income tax amounting to Rs. 1,290 ('000) as at 31st March, 2015 for a period of more than six months from the date they become payable.

[b] The disputed statutory dues aggregating to Rs. 30,272 ('000) have not been deposited on account of matters pending before appropriate authorities are as under:

(Rs. in '000)

Department Amount Forum where dispute is pending

Income Tax Act 30,272 Commissioner (A)

[c] According to the information and explanations given to us, no such amounts which were required to be transferred to investor education and protection fund with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under has been transferred to such fund within time.

viii. The Company neither has any accumulated losses nor has incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

ix. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks. The company has not obtained any borrowings from financial institutions or by way of debentures.

x. The company has not given any guarantee for loans taken by others from bank or financial institutions.

xi. The company has not obtained any term loans during the year.

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

For KANTILAL PATEL & CO. Chartered Accountants Firm Registration No. 104744W

Place : Ahmedabad [Gopal S. Baldi] Date : May 30, 2015 Partner Membership No.: 125930

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Mar 31, 2014

We have audited the accompanying financial statements of Gujarat Craft Industries Limited which comprise the Balance Sheet as at March 31,2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (the Act), read with General Circular 15/ 2013 dated 13th September, 2013 issued by the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013 and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 Profit and Loss, of the "Profit" for the year ended on that date; and

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the companies ("Auditor''s Report) (Amendment) order, 2004 (together 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 purpose of our audit;

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

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

d. In our opinion, the Balance Sheet and Statement of Profit and Loss comply with the accounting standards notified under the Companies Act, 1956, read with General Circular 15/2013 dated 13 September, 2013 issued by the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013;

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

Annexure to independent auditors'' report

Referred to in Paragraph 1 under the heading of "report on other legal and regulatory requirements" of our report of even date

1. (a) Fixed Assets register is under compilation.

(b) We are informed by the management that they have verified the fixed assets during the year. However, in absence of proper fixed assets register material discrepancies if any, could not be noticed between physical verification and book records. Hence, the fixed assets as appearing in books of account are carried in financial statements.

(c) The Company has not disposed off any major part of the fixed assets during the year and as such the going concern concept is not affected.

2. (a) As explained to us, the inventory have been physically verified during the year by the management.

In respect of inventories lying with third parties, inventories have been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and the discrepancies noticed on such physical verification between physical stocks and book records were not material and have been adequately dealt with in the books of account.

3. In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms

or other parties covered in the register maintained under section 301 of the Companies Act, 1956 :

(a) The company has granted unsecured demand loan, to company listed in the register maintained under section 301 of the Act. The number of company to whom loan granted during the year is one. The maximum amount involved during the year was Rs. 844 (Rs.000) and year-end balance of loans given to such companies is Rs. Nil.

(b) The company has taken unsecured loans, from parties listed in the register maintained under section 301 of the Act. The number of parties from whom loans taken during the year is nine. The maximum amount involved during the year was Rs. 95,354 (Rs.000) and the year-end balance of loans taken from such companies is Rs. 92,543 (Rs.000).

(c) In our opinion, the rate of interest and other terms and conditions of such loans given to and taken by the company, are prima facie not prejudicial to the interest of the company. Interest and principal amount is paid to / by the companies as agreed in contract.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act, have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us where each such transaction made in pursuance of such contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5 lakhs in respect of each party during the year have been made at the prices which are prima facie appear reasonable having regard to prevailing market prices at the relevant time.

6. The company has not accepted deposits from public during the year under audit hence the directives issued by Reserve Bank of India and provisions of section 58A & 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable.

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed records have been made and maintained. We have not, however made a detailed examination of records with a view to determine whether they are accurate or complete.

9. (a) The company is generally regular in depositing undisputed investor education & protection fund,

employees state insurance, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities, except slight delay in a few cases of provident fund under the Provident Fund Act and Income Tax under the Income Tax Act 1961.

(b) According to the information and explanations given to us, no undisputed amount in respect of aforesaid statutory dues were outstanding except for Income tax amounting to Rs. 628 (Rs.000) as at 31st March, 2014 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, there are no dues of sales tax/ income tax/ custom duty/ wealth tax/ excise duty/ service tax/ cess which have not been deposited on account of any dispute.

10. The company has no accumulated losses and has not incurred any cash losses during the current financial year or for immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks. The company has not obtained any borrowings from financial institutions or by way of debentures.

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

13. The Company is not a chit fund / Nidhi / Mutual benefit fund / society to which the provisions of special statute relating to chit fund are applicable and hence paragraph 4(xiii) of the Order is not applicable.

14. The Company is not dealing in or trading in shares, securities, debentures, and other investments and hence paragraph 4(xiv) of the order is not applicable.

15. The Company has not given guarantee for loans taken by others from bank or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the term loans raised during the year were prima facie been used for the purpose for which they were raised.

17. According to the cash flow statement and other records examined by us and the information and explanations given to us, on over all basis funds raised on short-term basis, prima facie, has not been used during the year for long-term investment (fixed assets etc.).

18. During the year, the company has made preferential allotment of shares to parties and companies covered in register maintained under section 301 of the companies Act 1956. In our opinion the price at which shares have been issued is not prejudicial to the interest of the company.

19. During the year, the company has not issued any debentures and hence paragraph 4 (xix) of the order is not applicable.

20. During the year, the company has not raised any money by way of public issue and hence paragraph 4(xx) of the Order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the company was noticed or reported during the year.



For KANTILAL PATEL & CO. Chartered Accountants Firm Registration No. 104744W

Place : Ahmedabad [Gopal S. Baldi] Date : May 28, 2014 Partner Membership No.: 125930

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Gujarat Craft Industries Limited which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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. 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.

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 Profit and Loss, of the "Profit" for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the companies ("Auditor''s Report) (Amendment) order, 2004 (together 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 purpose of our audit;

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

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

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

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

ANNEXURE REFERRED TO IN INDEPENDENT AUDITORS'' REPORT OF EVEN DATE TO THE MEMBERS OF GUJARAT CRAFT INDUSTRIES LIMITED, ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH 2013.

1. (a) Fixed Assets register is under compilation.

(b) We are informed by the management that they have verified the fixed assets during the year. However, in absence of proper fixed assets register material discrepancies if any, could not be noticed between physical verification and book records. Hence, the fixed assets as appearing in books of account are carried in financial statements.

(c) The Company has not disposed off any major part of the fixed assets during the year and as such the going concern concept is not affected.

2. (a) As explained to us, the inventory have been physically verified during the year by the management.

In respect of inventories lying with third parties, inventories have been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and the discrepancies noticed on such physical verification between physical stocks and book records were not material and have been adequately dealt with in the books of account.

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

(a) The company has granted unsecured demand loans, to companies listed in the register maintained under section 301 of the Act. The number of companies to whom loans granted during the year is two. The maximum amount involved during the year was Rs. 2,961 (‘000) and year-end balance of loans given to such companies is Rs. 389 (‘000).

(b) The company has taken unsecured loans, from companies listed in the register maintained under section 301 of the Act. The number of companies from whom loans taken during the year is nine. The maximum amount involved during the year was Rs. 78,735 (‘000) and the year-end balance of loans taken from such companies is Rs. 42,183 (‘000).

(c) In our opinion, the rate of interest and other terms and conditions of such loans given to and taken by the company, are prima facie not prejudicial to the interest of the company. Interest and principal amount is repaid / repayable by the companies as agreed in contract.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

(a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act, have been entered in the register required to be maintained under that section.

(b) According to the information and explanation given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act during the year.

6. The company has not accepted deposits from public during the year under audit hence the directives issued by Reserve Bank of India and provisions of section 58A & 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable.

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed records have been made and maintained. We have not, however made a detailed examination of records with a view to determine whether they are accurate or complete.

9. (a) The company is generally regular in depositing undisputed provident fund, investor education & protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities, except slight delay in a few cases of provident fund under the Provident Fund Act and Income Tax under the Income Tax Act 1961.

(b) According to the information and explanations given to us, no undisputed amount in respect of aforesaid statutory dues were outstanding except for Income tax amounting to " 837 (‘000) as at 31 st March, 2013 for a period of more than six months from the date they become payable.

(c) The disputed statutory dues aggregating to " 9,024 (‘000) have not been deposited on account of matters pending before appropriate authorities are as under:

(~ in ‘000)

Department Amount Forum where dispute is pending

Income Tax Act 9,024 Commissioner (A)

10. The company has no accumulated losses and has not incurred any cash losses during the current financial year or for immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks. The company has not obtained any borrowings from financial institutions or by way of debentures.

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

13. The Company is not a chit fund / Nidhi / Mutual benefit fund / society to which the provisions of special statute relating to chit fund are applicable and hence paragraph 4(xiii) of the Order is not applicable.

14. The Company is not dealing in or trading in shares, securities, debentures, and other investments and hence paragraph 4(xiv) of the order is not applicable.

15. The Company has not given guarantee for loans taken by others from bank or financial institutions.

16. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the term loans raised during the year were prima facie been used for the purpose for which they were raised.

17. According to the cash flow statement and other records examined by us and the information and explanations given to us, on over all basis funds raised on short-term basis, prima facie, has not been used during the year for long-term investment (fixed assets etc.).

18. During the year, the company has made preferential allotment of shares to parties and companies covered in register maintained under section 301 of the companies Act 1956. In our opinion the price at which shares have been issued is not prejudicial to the interest of the company.

19. During the year, the company has not issued any debentures and hence paragraph 4 (xix) of the order is not applicable.

20. During the year, the company has not raised any money by way of public issue and hence paragraph 4(xx) of the Order is not applicable.

21. To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the company was noticed or reported during the year.

For KANTILAL PATEL & Co.

Chartered Accountants

Firm Registration No. 104744W

Place : Ahmedabad [Gopal S. Baldi]

Date :30th May, 2013 Partner

Membership No.: 125930

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Mar 31, 2012

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

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

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

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

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

(iii) The balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account.

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

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and subject to non-provision of doubtful debts of Rs. 868 (in Rs.000), (refer note 32) and its consequential effects on profit and loss statement and reserves, 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 & loss, of the 'Profit' of the company for the year ended on that date;

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR AUDITORS' REPORT TO THE MEMBERS OF GUJARAT CRAFT INDUSTRIES LIMITED, ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2012.

(i) Fixed Assets register is under compilation. We are informed by the management that they have verified the fixed assets during the year. However, in absence of proper fixed assets register material discrepancies if any, could not be noticed between physical verification and book records. Hence, the fixed assets as appearing in books of account are carried in financial statements.

The company has not disposed off substantial part of fixed assets during the year.

(ii) (a) As explained to us, the inventory have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and the discrepancies noticed on such physical verification between physical stocks and book records were not material and have been adequately dealt with in the books of account.

(iii) (a) The company has granted as well as taken unsecured, interest free demand loans, to and from companies listed in the register maintained under section 301 of the Act. The number of companies to whom loans granted during the year is one. The maximum amount involved during the year was Rs. 515 (in Rs.000) and year-end balance of loans given to such companies is Nil. The number of companies from whom loans taken during the year is ten. The maximum amount involved during the year was 95,642 (in Rs.000) and the year-end balance of loans taken from such companies is 68,811 (in Rs.000).

(b) In our opinion, the rate of interest and other terms and conditions of such loans taken by the company, are prima facie not prejudicial to the interest of the company. The principal amount is repayable by the company as agreed in contract.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act during the year.

(vi) According to the information and explanations given to us, the company has not accepted any deposits from the public falling within the purview of section 58A of the Companies Act, 1956 and the rules framed there under.

(vii) In our opinion, the company has an internal audit system commensurate with the size of the company and the nature of its business.

(viii) We have broadly reviewed the cost records maintained by the company pursuant to the rules made by the Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed records have been made and maintained. We have not, however made a detailed examination of records with a view to determine whether they are accurate or complete.

(ix) (a) The company is generally regular in depositing undisputed provident fund, investor education & protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities, except Income Tax under the Income Tax Act 1961.

(b) According to the information and explanations given to us, no undisputed amount in respect of aforesaid statutory dues were outstanding except for Income tax amounting to 410 (in Rs.000) as at 31st March, 2012 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, as at the balance sheet date there were no dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of dispute.

(x) The company has no accumulated losses and has not incurred any cash losses during the current financial year or for immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks. The company has not obtained any borrowings from financial institutions or by way of debentures.

(xii) In our opinion and according to the information and explanation given to us, no loans and advances have been granted on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) According to information and explanation given to us, the company has not given guarantee for loans taken by others from banks or financial institutions.

(xiv) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the term loans raised during the year were prima facie been used for the purpose for which they were raised.

(xv) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

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

(xvii)The company has not issued any debentures during the year.

(xviii) The company has not raised any money by way of public issue during the year.

(xix) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

(xx) In our opinion and according to the information and explanations given to us, the nature of the company's business/activities during the year are such that clause; 4(xiii) provisions of any special statute applicable to chit fund, 4(xiv) dealing or trading in shares, securities, debentures and other investments of Company (Auditors' Report) Order, 2003 are not applicable to the company.



For KANTILAL PATEL & Co. Chartered Accountants Firm Registration No. 104744W

(Gopal S. Baldi) Partner Membership No.: 125930

Place : Ahmedabad Date : 30th May, 2012

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Mar 31, 2011

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

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

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

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

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

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account.

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

(v) On the basis of the written representations received from directors, as on 31st March 2011, and taken on record by the Board of directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956, on the said date.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and subject to non-provision of doubtful debts of Rs.24.05 Lacs, (refer note 2(l) of schedule 18) and its consequential effects on profit and loss statement and reserves, 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, 2011;

(b) in the case of the profit & loss account, of the 'Profit' of the company for the year ended on that date;

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

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR AUDITORS' REPORT TO THE MEMBERS OF GUJARAT CRAFT INDUSTRIES LIMITED, ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31ST MARCH, 2011.

(i) Fixed Assets register is under compilation. We are informed by the management that they have verified the fixed assets during the year. However, in absence of proper fixed assets register material discrepancies if any, could not be noticed between physical verification and book records. Hence, the fixed assets as appearing in books of account are carried in financial statements.

The company has not disposed off substantial part of fixed assets during the year.

(ii) (a) As explained to us, the inventory have been physically verified during the year by the management. In respect of inventory lying with third parties, inventory has been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of inventory and the discrepancies noticed on such physical verification between physical stocks and book records were not material and have been adequately dealt with in the books of account.

(iii) (a) The company has not granted loans to any company and hence paragraphs 4(iii) (a), (b), (c), and (d) of Company (Auditors' Report) Order, 2003 are not applicable to the company. The company has taken unsecured, interest free demand loans, from companies listed in the register maintained under section 301 of the Act. The number of companies from whom loans taken during the year is Nine. The maximum amount involved during the year was Rs. 495.64 lakhs and the year-end balance of loans taken from such companies is Rs. 472.86 lakhs.

(b) In our opinion, the rate of interest and other terms and conditions of such loans taken by the company, are prima facie not prejudicial to the interest of the company. The principal amount is paid by the company when demanded.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

(v) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act during the year.

(vi) According to the information and explanations given to us, the company has not accepted any deposits from the public falling within the purview of section 58A of the Companies Act, 1956 and the rules framed there under.

(vii) In our opinion, the company has an internal audit system commensurate with the size of the company and the nature of its business.

(viii) To the best of our knowledge and as informed, the Central Government has not prescribed under section 209 [1][d] of the Companies Act, 1956, maintenance of cost records for the products manufactured by the company.

(ix) (a) The company is generally regular in depositing undisputed provident fund, investor education & protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and other material statutory dues, wherever applicable, have been generally regularly deposited with the appropriate authorities, except Income Tax under the Income Tax Act 1961.

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

(b) According to the information and explanations given to us, no undisputed amount in respect of aforesaid statutory dues were outstanding for Income tax amounting to Rs. 7.81 Lakhs as at 31st March, 2011 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, as at the balance sheet date there were no dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess which have not been deposited on account of dispute.

(x) The company has no accumulated losses and has not incurred any cash losses during the current financial year or for immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks. The company has not obtained any borrowings from financial institutions or by way of debentures.

(xii) In our opinion and according to the information and explanation given to us, no loans and advances have been granted on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) According to information and explanation given to us, the company has not given guarantee for loans taken by others from banks or financial institutions.

(xiv) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, the term loans raised during the year were prima facie been used for the purpose for which they were raised.

(xv) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

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

(xvii)The company has not issued any debentures during the year.

(xviii) The company has not raised any money by way of public issue during the year.

(xix) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

(xx) In our opinion and according to the information and explanations given to us, the nature of the company's business/activities during the year are such that clause;

4(xiii) provisions of any special statute applicable to chit fund,

4(xiv) dealing or trading in shares, securities, debentures and other investments of Company (Auditors' Report) Order, 2003 are not applicable to the company.

For KANTILAL PATEL & Co. Chartered Accountants Firm Registration No. 104744W

[Gopal S. Baldi] Partner Membership No.: 125930

Place : Ahmedabad Date : 30th May, 2011

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Mar 31, 2010

1. We have audited the attached balance sheet of Gujarat Craft industries Limited as atMarch 31, 2010, the profit & 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 Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

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

(iii) the balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account.

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

(v) On the basis of the written representations received from 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 31stMarch, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956, on the said date.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and subject to non-provision of doubtful debts of Rs. 14.97 Lacs, (refer note 2(1) of schedule 18) and its consequential effects on profit and loss statement and reserves, 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 31stMarch, 2010;

(b) In the case of the profit & loss account, of the Profit 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.



ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR AUDITORS REPORT TO the MEMBERS OF GUJARAT CRAFT INDUSTRIES LIMITED, ON the FINANCIAL STATEMENTS FOR the YEAR ENDED 31st March, 2010.



(i) Fixed Assets register is under compilation. We are informed by the management that they have verified [the fixed assets during the year.However, in absence of proper fixed assets register material discrepancies if any, could not be noticed between physical verification and book records. thence, the fixed assets as appearing in books of account are carried in financial statements. the company has not disposed off substantial part of fixed assets during the year.

(ii) (a) As explained to us, the inventory have been physically verified during the year by the management. In respect of inventory lying with third parties, inventory have been confirmed by them. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion and according to the information and explanations given to us. the company has maintained proper records of inventory and the discrepancies noticed on such physical verification between physical stocks and book records were not material and have been adequately dealt with in the books of account.

(iii) (a) the company has not granted loans to any company and thence paragraphs 4(iii) (a), (b), (c), and (d) of Company (Auditors Report) Order, 2003 are not applicable to the company. the company has taken unsecured, interest free demand loans, from companies listed in the register maintained under section 301 of the Act. the number of companies from whom loans taken during the year is eleven. the maximum amount involved during the year was Rs. 529.41 lakhs and the year-end balance of loans taken from such companiesis Rs, 442.43 lakhs.

(b) In our opinion-, the rate of interest and other terms and conditions of sucth loans granted or taken by the company, are prima facie not prejudicial to the interest of the company. the principal amount is received wthen demanded by the company and paid by the company wthen demanded.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate witth the size of the company and the nature of its business witth regard to purcthase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we thave not observed any continuing failure to correct major weaknesses in internal controls-

(v) According to the information and explanations given to us, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act during the year.

(vi) According to the information and explanations given to us, the companyhas not accepted any deposits from the public falling within the purview of section 58A of the Companies Act, 1956 and the rules framed there under.

(vii) In our opinion, the company has an internal audit system commensurate with the size of the company and the nature of its business.

(viii) To the best of our knowledge and as informed, the Central Government has not prescribed under section 209 [1 ] [d] of the Companies Act, 1956, maintenance of cost records lor the products manufactured by the company.

(ix) (a) the company is generally regular in depositing undisputed provident fund, investor education & protection fund, employees state insurance, income tax, sales tax wealth tax. service tax, custom duty, excise duty, cess and other material statutory dues.

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

(b) According to the information and explanations given to us, no undisputed amount in respect of aforesaid statutory dues were outstanding for Income tax amounting to Rs. 3.75 Lakhs as at 31 st March, 2010 for a period of more than six months from the date they become payable.

(c) According to the information and explanations given to us, as at the balance sheet date there were no dues of sales tax, income tax, custom duty, wealth tax, service tax, excise duty and cess whicth have not been deposited on account of dispute,

(x) the company has no accumulated losses and has not incurred any cash losses during the current financial year or tor immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the company has not defaulted in repayment of dues to banks. the companyhas not obtained any borrowings from financial institutions or by way of debentures.

(xii) In our opinion and according to the information and explanation given to us. no loans and advances have been granted on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) According to information and explanation given to us, the companyhas not given guarantee for loans taken by others from banks or financial institutions.

(xiv) To the best of our knowledge and belief and according to the information and explanations given to us. in our opinion, the term loans raised during the year were prima facie been used for the purpose for whicth they were raised.

(xv) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment.

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

(xvii) The company has not issued any debentures during the year.

(xviii) the companyhas not raised any money by way of public issue during the year,

(xix] To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year.

(xx) In our opinion and according to the information and explanations given to us, the nature of the companys business/activities during the year are such that clause;

(xiii) provisions of any special statute applicable to chit fund,

(xiv) dealing or trading in sthares, securities, debentures and other investments of Company (Auditors Report) Order, 2003 are not applicable to the Company.



For KANTILAL PATEL & Co.

Cthartered Accountants Firm Registration No. 104744W

Place : Athmedabad [Gopal S. Baldi]

Date : May 29, 2010 Partner

Membersthip No.: 12S930