Auditor Report of Gujarat Raffia Industries Ltd.

Mar 31, 2015

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

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 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 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 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 misstatements.

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 an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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 31st March, 2015, 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 obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

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

d. In our opinion, 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 written representations received from the directors as on 31 March, 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

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

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 derivatives contracts for which there were any material foreseeable losses.

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

Annexure to Auditors' Report

Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' of our Report of even date to the members of Gujarat Raffia Industries Limited on the accounts of the company for the year ended 31st March, 2015.

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

i. In respect of its fixed assets :

a) The company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets on the basis of available information.

b) As explained to us, the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, apportion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book stock and the physical inventory have been noticed.

ii. In respect of its Inventories :

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

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and 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 inventories. As explained to us, there was no material discrepancy noticed on physical verification of inventories as compared to the book records.

iii. In respect of loans, secured or unsecured, granted or taken by company to/from companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013:

a) The principal amounts are repayable over varying periods and interest is payable annually, both at the discretion of the Company.

b) In respect of the said loans and interest thereon, there are no overdue amounts.

iv. In our opinion and according to the information & explanations given to us, there are adequate internal control systems which commensurate with the size of the company & nature of its business for purchase of inventory,

- fixed assets and also for the sales of goods and services. Further, on the basis of our examination of our books and records of the Company, and according to the information and explanation given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of Clause (v) of paragraph 3 of the CARO 2015 are not applicable to the Company.

vi. According to the information and explanations given to us, the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148(1 )(d) of the Companies Act, 2013 are not applicable to the company for the year under review.

vii. In respect of Statutory Dues :

(a) According to the records of the company and information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, employees state insurance (ESI), Investor Education and Protection Fund Income-tax, Tax deducted at sources, Tax collected at source, Professional Tax, Sales Tax, value added tax (VAT), Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it, with the appropriate authorities.

(b) According to the information and explanations given to us, there were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, sales tax, VAT, Cess and other material statutory dues in arrears /were outstanding as at 31 March, 2015 for a period of more than six months from the date they became payable except the followings:

Sr. Nature of the Statute Nature of Dues No.

1. The industrial Dispute Labour Matter Act, 1947

2. Employee's State Insurance ESIC Act, 1948

Sr. Nature of the Statute Forum where the Unpaid No. matter is pending Amt.(Rs.)

1. The industrial Dispute Labour Court, Ahmedabad 35,000/- Act, 1947

2. Employee's State Insurance ESI Tribunal, Ahmedabad 2,00,000/- Act, 1948

(c) According to the information and explanations given to us, There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. Therefore, the question of reporting delay in transferring such sums does not arise as at 31st March, 2015, hence, clause 3(vii)(c) of the Order is not applicable to it.

viii. On the basis of information and explanations given to us and on the basis of records produced before us, the company does not have any accumulated loss at the end of the year and has not incurred cash losses in the relevant financial year and in the immediately preceding financial year.

ix. According to the records of the company examined by us and on the basis of the information and explanations given to us, the company has not defaulted in repayment of dues to any bank as at the balance sheet date. The company has not taken loans from financial institutions and has not issued debentures during the period under review.

x. In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loan taken by others from bank or financial institution hence the provision of this clause is not applicable to the company.

xi. In our opinion and according to the information and explanation given to us, the term loans were applied for the purpose for which the loans were obtained.

xii. To the best-ef'our knowledge and according to the information and explanations given to us, no fraud by the Company and.no material fraud on the Company has been noticed or reported during the year.

For P G T & Associates Chartered Accountants (Firm Reg. No.: 116277W)

(Pradeep G Tulsian) Place : Ahmedabad Partner Date : 27/05/2015 Membership No.: 100968

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Mar 31, 2014

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

MANAGEMENT''S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS :

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under 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 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 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 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, 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 management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

OPINION :

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

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

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

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

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS :

1. As required by the Companies (Auditor''s Report) Order, 2003 (the Order) issued by the Central Government of India in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with Accounting Standards notified under 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, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of Section 274(1)(g) of the Act.

ANNEXURE TO AUDITORS'' REPORT Referred to in Paragraph 3 of our report of even date

i. In respect of its fixed assets:

a) The company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets on the basis of available information.

b) As explained to us, the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, apportion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book stock and the physical inventory have been noticed.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

ii. In respect of its Inventories:

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

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and 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 inventories. As explained to us, there was no material discrepancy noticed on physical verification of inventories as compared to the book records.

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

a) According to information and explanations given to us and on the basis of the records produced before us, the company has not granted any loan, secured or unsecured to the companies or firms or other parties covered in the register maintained under section 301 of the Companies Act 1956 and hence sub-clause b, c and d are not applicable.

b) According to information and explanation given to us and on the basis of records produced before us the company has taken loan from four parties covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved during the year was Rs. 5,52,23,932/- and year end balance of loans taken from such party is Rs. 4,86,60,655/-

c) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions on which loan has been taken from company listed in the register maintained under section 301 of the Act are not prima facie prejudicial to the interest of the company.

d) The company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

iv. In our opinion and according to the information & explanations given to us, there are adequate internal control systems which commensurate with the size of the company & nature of its business for purchase of inventory, fixed assets and also for the sales of goods and services. Further, on the basis of our examination of our books and records of the Company, and according to the information and explanation given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v In respect of the Contracts and 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 transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained referred to in section 301 of the companies Act, 1956 have been so entered.

b) In our opinion, and according to information and explanation given to us, the transactions 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 Rupees Five Lacs or in respect of any party during the period have been made at prices which appears reasonable, having regard to the prevailing market prices at the relevant time.

vi. In our opinion, and according to information and explanation given to us, the company has neither accepted nor reviewed any deposit from the public during the period covered by audit report, attracting the provisions of section 58A and 58AA or other provisions of the companies Act, 1956 and the Companies (Acceptance of Deposit) Rules,1975. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

vii. The company has appointed internal auditors and has carried out internal audit during the year. In our opinion based on size, nature and extent of the business the internal audit system of the company is commensurate with the size and nature of the business.

viii. W have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determined whether they are accurate or complete.

ix. In respect of Statutory Dues:

a) According to the records of the Company, undisputed statutory dues including provident fund, investor education and protection fund, ESI, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at March 31,2014 for a period of more than six months from the date of becoming payable.

b) According to the records of the company and according to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom duties, excise duty and cess which have been deposited on account of any dispute except the followings:

No. Nature of the Statute Nature of Forum where Unpaid Dues the matter Amount (Rs.) is pending

1. The Industrial Dispute Act, 1947 Labour Matter Labour Court 2,35,000/-

2. Employee''s State Insurance Act, 1948 ESIC ESI Tribunal, Ahmedabad 2,00,000/-

x. On the basis of information and explanations given to us and on the basis of records produced before us, the company does not have any accumulated loss at the end of the year and has not incurred cash losses in the relevant financial year and in the immediately preceding financial year.

xi. According to the records of the company examined by us and on the basis of the information and explanations given to us, the company has not defaulted in repayment of dues to any bank as at the balance sheet date. The company has not taken loans from financial institutions and has not issued debentures during the period under review.

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

xiii. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the company.

xiv. According to the information and explanation given to us, the company is not dealing in or trading in shares. Accordingly the provisions of clause (xiv) are not applicable to the company.

xv. In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loan taken by others from bank or financial institution hence the provision of this clause is not applicable to the company.

xvi. In our opinion and according to the information and explanation given to us, the term loans were applied for the purpose for which the loans were obtained.

xvii. According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we are of the opinion that there are no funds raised on short term basis that have been used for long term investment by the company.

xviii. During the period covered under audit report, 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.

xix. During the period covered under audit report the company has not issued any debentures and does not have any debenture outstanding as at the year end. Accordingly the provisions of clause (xix) of the Companies (Auditors Report) Order are not applicable to the Company.

xx. During the period covered under audit report the company has not raised any money by way of public issue during the year.

xxi. 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 and based on management representation, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For P G T & Associates Chartered Accountants (Firm Reg. No.: 116277W)

(Pradeep G Tulsian) Place : Ahmedabad Partner Date : 27.05.2014 Membership No.: 100968

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Mar 31, 2013

We have audited the accompanying financial statements of Gujarat Raffia Industries Limited ("the Company"), 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 ("the Act"). 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 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 Profit and Loss Account, 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

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-secticn (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.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

Annexure to Auditors'' Report Referred to in Paragraph 3 of our report of even date

i. In respect of its fixed assets:

a) The company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets on the basis of available information.

b) As explained to us, the fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, apportion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book stock and the physical inventory have been noticed.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

ii. In respect of its Inventories:

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

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and 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 inventories. As explained to us, there was no material discrepancy noticed on Physical Verification of Inventories as compared to the book records.

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

a) According to information and explanations given to us and on the basis of the records produced before us, the company has not granted any loan, secured or unsecured to the companies or firms or other parties covered in the register maintained under section 301 of the Companies Act 1956 and hence sub-clause b, c and d are not applicable.

b) According to information and explanation given to us and on the basis of records produced before us the company has taken loan from three companies covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved during the year was Rs. 44154810/- and year end balance of loans taken from such party is Rs. 41945310/-

c) In our opinion and according to the information and explanation given to us, the rate of interest and other terms and conditions on which loan has been taken from company listed in the register maintained under section 301 of the Act are not prima facie prejudicial to the interest of the company.

d) The company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

iv. In our opinion and according to the information & explanations given to us, there are adequate internal control systems which commensurate with the size of the company & nature of its business for purchase of inventory, fixed assets and also for the sales of goods and services. Further, on the basis of our examination of our books and records of the Company, and according to the information and explanation given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. In respect of the Contracts and 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 transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained referred to in section 301 of the companies Act, 1956 have been so entered.

b) In our opinion, and according to information and explanation given to us, the transactions 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 Rupees Five Lacs or in respect of any party during the period have been made at prices which appears reasonable, having regard to the prevailing market prices at the relevant time.

vi. In our opinion, and according to information and explanation given to us, the company has neither accepted nor reviewed any deposit from the public during the period covered by audit report, attracting the provisions of section 58A and 58AA or other provisions of the companies Act, 1956 and the Companies (Acceptance of Deposit) Rules,1975. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

vii. The company has appointed internal auditors and has carried out internal audit during the year. In our opinion based on size, nature and extent of the business the internal audit system of the company is commensurate with the size and nature of the business.

viii. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determined whether they are accurate or complete.

ix. In respect of Statutory Dues:

a) According to the records of the Company, undisputed statutory dues including provident fund, investor education and protection fund, ESI, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at March 31, 2013 for a period of more than six months from the date of becoming payable.

b) According to the records of the company and according to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom duties, excise duty and cess whiGh have been deposited on account of any dispute except the fpllowings:



Sr. Nature of the Nature of Forum where the Unpaid No. Statute Dues matter is pending Amount (Rs)

1. The Industrial Labour Matter Labour Court, 35,000/- Dispute Act, 1947 Ahmedabad.

2. Employee''s State ESIC ESI Tribunal, 2,00,000/- Insurance Act, 1948 Ahmedabad.



x. On the basis of information and explanations given to us and on the basis of records produced before us, the company does not have any accumulated loss at the end of the year and has not incurred cash losses in the relevant financial year and in the immediately preceding financial year.

xi. According to the records of the company examined by us and on the basis of the information and explanations given to us, the company has not defaulted in repayment of dues to any bank as at the balance sheet date. The company has not taken loans from financial institutions and has not issued debentures during the period under review.

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

xiii. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the company.

xiv. According to the information and explanation given to us, the company is not dealing in or trading in shares. Accordingly the provisions of clause (xiv) are not applicable to the company.

xv. In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loan taken by others from bank or financial institution hence the provision of this clause is not applicable to the company.

xvi. During the year under report, Company has not taken any term loan. Hence, the provisions of this clause are not applicable to the company.

xvii. According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we are of the opinion that there are no funds raised on short term basis that have been used for long term investment by the company.

xviii. During the period covered under audit report, 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.

xix. During the period covered under audit report the company has not issued any debentures and does not have any debenture outstanding as at the year end. Accordingly the provisions of clause (xix) of the Companies (Auditors Report) Order are not applicable to the Company.

xx. During the period covered under audit report the company has not raised any money by way of public issue during the year.

xxi. 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 and based on management representation, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have we been informed of any such case by the Management.



For P G T & Associates

Chartered Accountants

(Firm Reg. No.:116277W)



Date : 30.05.2013 (Pradeep G Tulsian)

Place : Ahmedabad. Partner

Membership No.: 100968

---

Mar 31, 2012

1) We have audited the attached Balance Sheet of GUJARAT RAFFIA INDUSTRIES LIMITED (The "Company") as at 31st March 2012 and the Statement of Profit and Loss Account and Cash-flow Statement for the period ended on that date annexed thereto. These financial statements are the responsibility of the Company' 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 statement. 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, as amended by the Companies (Auditors 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 Companies Act, 1956' of India (the "Act") and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

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

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

b) In our opinion, proper books of accounts as required by Law have been kept by the Company so far as appears from our examination of the books;

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

d) In our opinion the Balance Sheet, the statement of Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting standards referred to in sub section (3C) of Section 211 of the Act;

e) On the basis of the written representation received from the directors, as on March 31, 2012 and taken on record by the Board of Directors, we report that none of the directors of the company are disqualified as on March 31, 2012 from being appointed as director in terms of clause (g) of sub- section (1) of Section 274 of the Act;

f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements read together with the significant accounting policies and notes attached thereto 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, 2012;

ii. In the case of the Statement of Profit and Loss Account, of the profit of the Company for the period ended on that date;

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

Annexure to Auditors' Report Referred to in Paragraph 3 of our report of even date

i. In respect of its fixed assets:

a) The company has maintained proper records showing full particulars including quantitative details and situation of the fixed assets on the basis of available information.

b) As explained to us, the fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, apportion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book stock and the physical inventory have been noticed.

c) In our opinion, the Company has not disposed off a substantial part of its fixed assets during the year and the going concern status of the company is not affected.

ii. In respect of its Inventories:

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

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and 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 inventories. As explained to us, there was no material discrepancy noticed on Physical Verification of Inventories as compared to the book records.

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

a) According to information and explanations given to us and on the basis of the records produced before us, the company has not granted any loan, secured or unsecured to the companies or firms or other parties covered in the register maintained under section 301 of the Companies Act 1956 and hence sub-clause b, c and d are not applicable.

b) According to information and explanation given to us and on the basis of records produced before us the company has taken loan from three companies covered in the register maintained under section 301 of the companies Act, 1956. The maximum amount involved during the year was Rs. 25000/- and year end balance of loans taken from such party is Rs. 41727651/-

c) In our opinion and according to the information and explanation given to us, the rate of interest

and other terms and conditions on which loan has been taken from company listed in the register maintained under section 301 of the Act are not prima facie prejudicial to the interest of the company.

d) The company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

iv. In our opinion and according to the information & explanations given to us, there are adequate internal control systems which commensurate with the size of the company & nature of its business for purchase of inventory, fixed assets and also for the sales of goods and services. Further, on the basis of our examination of our books and records of the Company, and according to the information and explanation given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v. In respect of the Contracts and 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 transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained referred to in section 301 of the companies Act, 1956 have been so entered.

b) In our opinion, and according to information and explanation given to us, the transactions 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 Rupees Five Lacs or in respect of any party during the period have been made at prices which appears reasonable, having regard to the prevailing market prices at the relevant time.

vi. In our opinion, and according to information and explanation given to us, the company has neither accepted nor reviewed any deposit from the public during the period covered by audit report, attracting the provisions of section 58A and 58AA or other provisions of the companies Act, 1956 and the Companies (Acceptance of Deposit) Rules,1975. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

vii. The company has appointed internal auditors and has carried out internal audit during the year. In our opinion based on size, nature and extent of the business the internal audit system of the company is commensurate with the size and nature of the business.

viii. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determined whether they are accurate or complete.

ix. I n respect of Statutory Dues:

a) According to the records of the Company, undisputed statutory dues including provident fund, investor education and protection fund, ESI, income tax, sales tax, service tax, wealth tax, custom duty, excise duty, cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at March 31, 2012 for a period of more than six months from the date of becoming payable.

b) According to the records of the company and according to the information and explanations given to us, there are no dues of income tax, sales tax, wealth tax, service tax, custom duties, excise duty and cess which have been deposited on account of any dispute except the followings:

Sr. Nature of the Nature of Forum where Unpaid

No. Statute Dues the matter pending Amount (Rs)

1. The Industrial Labour Matters Labour Court, 5,00,000/- Dispute Act, 1947 Ahmedabad.

2. Employee's State ESIC ESI Tribunal, 7,00,000/- Insurance Act, 1948 Ahmedabad.

x. On the basis of information and explanations given to us and on the basis of records produced before us the company does not have any accumulated loss at the end of the year and has not incurred cash losses in the relevant financial year and in the immediately preceding financial year.

xi. According to the records of the company examined by us and on the basis of the information and explanations given to us, the company has not defaulted in repayment of dues to any bank as at the balance sheet date. The company has not taken loans from financial institutions and has not issued debentures during the period under review.

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

xiii. In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the company.

xiv. According to the information and explanation given to us, the company is not dealing in or trading in shares. Accordingly the provisions of clause (xiv) are not applicable to the company.

xv. In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loan taken by others from bank or financial institution hence the provision of this clause is not applicable to the company.

xvi. During the year under report, Company has not taken any term loan. Hence, the provisions of this clause are not applicable to the company.

xvii. According to the information and explanation given to us and on an overall examination of the balance sheet of the company, we are of the opinion that there are no funds raised on short term basis that have been used for long term investment by the company.

xviii. During the period covered under audit report, 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.

xix. During the period covered under audit report the company has not issued any debentures and does not have any debenture outstanding as at the year end. Accordingly the provisions of clause (xix) of the Companies (Auditors Report) Order are not applicable to the Company.

xx. During the period covered under audit report the company has not raised any money by way of public issue during the year.

xxi. 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 and based on management representation, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have we been informed of any such case by the Management.

For P G T & Associates

Chartered Accountants

(Firm Reg. No.: 116277W)

Date : 30.05.2012 (Pradeep G Tulsian)

Place : Ahmedabad. Proprietor

Membership No.: 100968

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of GUJARAT RAFFIA INDUSTRIES LIMITED as at 31st March 2010, the Profit and Loss Account and the cash flow statement for the 15 months 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 from 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) 0rder,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 purpose 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 those books;

iii. The Balance Sheet and 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 and Profit and Loss Account and Cash Flow statement dealt with this Report comply with the Accounting S:andards referred to in Sub-section (3C) of section 211 of the Companies Act, 1956;

v. On the basis of written representations received from the Directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2010 from being appointed as a Director in terms of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to the explanations given to us, subject to the provision for the Leave Encashment benefits as required by the Accounting Standard - 15 'Employee Benefits' issued by the Institute of Chartered Accountants of India, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

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

(b) In the case of the Profit and Loss Account, of the profit for the 15 months ended on that date,

(c) In the case of the Cash Flow statement, of the cash flows for the 15 months ended on that date.

Referred to in paragraph 3 of our report of even date.

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

(b) As explained to us, majority of the assets have been physically verified by the management during the period and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the period under audit, the company has not disposed off any major part of the Fixed Assets.

(ii) (a) As explained to us the inventory has been physically verified during the period 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 inventories 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 is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to size of operations of the company.

(iii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or Other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence the provisions of clause (a),(b),(c), and (d) are not applicable to the company.

(e) The Company has taken loans from three Companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum balance outstanding during the period is Rs.19,322 196/- and year end balance is Rs.18,972,675/-.

(f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions on which loans have been taken from companies listed in the register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

(g) The company is regular in repaying the principal amounts as stipulated and has been regular in the payment of interest.

(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 with regard to the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the interns I controls.

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the registers maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rupees five lakhs in respect of any ' party, have been made at prices which are reasonable having regard to prevailing market-prices for such services and items have been made with other parties.

(vi) In our opinion and according to the information and explanations given to us, the company has neither accepted nor renewed any deposit from the public during the period covered by our audit report, attracting the provisions of Section 58A and 58AA or other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) The Company has appointed a firm of Chartered Accountants as its Internal Auditors for the period under review. The Internal Audit for the period is, therefore, carried out by the said firm. In our opinion, the internal audit system is commensurate with the size and nature of its business.

(viii) The Central Government has not prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956. Hence the provision of this, clause is not applicable to the company.

(ix) (a) According to the records of the company, the Company is generally regular in depositing undisputed statutory dues including Investor Education and Protection Fund, Income Tax, Wealth Tax, Service Tax, Custom duty, Excise' duty, cess and other statutory dues with the appropriate authorities.

(b)According to the records of the company, there are no dues of income tax, sales tax, wealth tax, service tax, custom duty, Excise duty and cess which have not been deposited on account of any dispute except the following:

Sr. Name of the Nature of Forum where Unpaid No. Statute Dues dispute is Amount pending (Rs)

1 The Industrial Labour Labour Court, 370,469/- Dispute Act, Matters Ahmedabad 1947

2 Employee's State ESIC ESI Tribunal, 600,000/- Insurance Act, Ahmedabad 1948

(x) The Company does not have any accumulated losses for the 15 months' period ending on 31st March 2010. The Company has not incurred any cash loss during the financial period covered by our audit and in the immediately preceding 15 months ended 31st December 2008.

(xi) According to the records of the Company examined by us and on the basis of information and explanations given to us, the Company has not defaulted in repayment of dues to bank during the year. The Company has not taken loans from financial institutions and has not issued debentures during the period under review.

(xii) The company has n3t granted any loans against security by way of pledge of shares, debentures and other securities.

(xiii) The company is net a chit fund or a nidhi mutual benefit fund/society. Therefore, the provisions of this clause of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion and according to the information and explanation given to us, the company is dealing in or trading in shares. The Company has maintained proper records of the transactions and timely entries have been made therein.

(xv) In our opinion and according to the information and explanation given to us, the company has not given any guarantee for loans taken by others from bank or financial institution hence the provision of this clause is not applicable to the company.

(xvi) During the period under report, Company has not taken any term loan.

(xvii) In our opinion and according to information and explanations given to us and on an overall examination of the balance sheet of the company, we are of the opinion that ;here is no funds raised on short-term basis have been used for long-term investment by the company.

(xviii) The company has not made any preferential allotment of shares to any parties and companies covered under the register maintained u/s 301 of the Act.

(xix) During the period covered by our audit report, the company has not issued any debentures.

(xx) During the period covered by our audit report, the company has not raised any money out of public issue.

(xxi) In our opinion and according to information and explanations given to us no material fraud on of by the company has been noticed or reported during the course of our audit.

For TALATI & TALATI

Chartered Accountants

(Firm Reg No. 110758W)



AHMEDABAD (UMESH H.TALATI)

DATE: 04/05/10 Partner

Mem.No. 34834