Auditor Report of Konark Synthetics Ltd.

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

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

Auditor's Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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 31 March 2015 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter:

We would like to draw the attention on the Company's policy of providing for gratuity as and when paid and not on the

basis of actuarial valuation as per AS 15. The same has been stated in Note 27 of Notes to Accounts.

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 the paragraph 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; and

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

(i) the Company does not have any pending litigations and therefore no impact or disclosure in relation to the same has been made in the financial statement;

(ii) the Company does not see any foreseeable losses on long-term contracts as on the balance sheet date and the Company has not entered into any derivative contracts, therefore no provision has been made in relation to the same;

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

Annexure to the Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the financial

statements for the year ended 31 March 2015, we report that:

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

(b) The Company has a programme of physical verification of its fixed assets by which fixed assets are verified. In accordance with this programme, fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, the periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) In respect of its inventories:

a) The inventories 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 inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) The Company has maintained proper records of inventories. As per the information and explanation given to us, no material discrepancies were noticed on physical verification

(iii) According to the information and explanations given to us, the Company has granted unsecured loan to companies covered in the register maintained under section 189 of the Companies Act and thus, paragraph 3

(iii) of the Order is not applicable.

a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has granted unsecured loans to its subsidiaries/step down subsidiaries, with or without interest, during the year of which details are as follows. (Rs,in Lac)

No. of Parties Loan Given* Maximum Balance Closing Balance

5 253.86 1443.83 1415.57

* includes interest amount.

b) In our opinion, interest, whenever charged and other terms and conditions of loans given by the company are not prima facie prejudicial to the interest of the company.

c) In absence of any stipulated time period we are unable to comment on the repayment of the principal amounts and interest whether paid in time or not.

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

(v) The Company has not accepted any deposits from the public and thus, paragraph 3(v) of the Order is not applicable.

(vi) The Central Government has prescribed the maintenance of cost records under section 148(1) of the Companies Act, 2013. The company has maintained such cost records which we have broadly reviewed. However no detailed analysis of such records has been done by us.

(vii) a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues such as provident fund, income tax, and others as applicable, have been regularly deposited during the year by the Company with the appropriate authorities.

b) According to the records of the Company, and information and explanations given to us there are no dues of Income tax / Sales Tax / Wealth Tax / Service Tax/ Custom Duty/ Excise Duty/ Cess which has not been deposited on account of disputes.

c) According to the audit carried by us and the information and explanations given to us, the company having no amount of unpaid dividend which is required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956.

(viii) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses in the financial year and in the immediately preceding financial year.

(ix) As per the information and explanations given to us and based on our audit, the Company has not defaulted in repayment of dues to financial institution or bank.

(x) In our opinion and according to the information and the explanations given to us, the Company has given any guarantee of Rs.5960/- Lac (P.Y-Rs.3190/- Lac) for loans taken by its subsidiaries and step down subsidiaries. In our opinion guarantee given by the company are prima facie not prejudicial to the interest of the company.

(xi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Bhuwania & Agrawal Associates Chartered Accountants Firm's registration number: 101483W

Niranjankumar Agrawal Partner Membership No. 34659

Place: Mumbai Date : 30th May, 2015

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Mar 31, 2014

We have audited the accompanying financial statements of Konark Synthetic Limited, which comprise the Balance Sheet as at 31st March, 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

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 accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section133 of the Companies Act, 2013.This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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, 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; except as dealt under Emphasis of Matter below:

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

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

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

Emphasis of Matter :

We would like to draw the attention on the Company''s policy of providing for gratuity as and when paid and not on the basis of actuarial valuation as per AS 15. The same has been stated in Note 26 of Notes to Accounts.

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 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 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, except as stated under Emphasis of Matter;

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

ANNEXURE TO THE 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 Konark Synthetic Limited, we report that:

i. In respect of the Fixed Assets:

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

(b) As per the information and explanations given to us, physical verification of fixed assets has been carried out by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

(c) No substantial part of fixed asset has been disposed off during the year.

ii. In respect of its Inventories:

(a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii. In respect of the 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, we report

a) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has granted unsecured loans to its subsidiaries / step down subsidiaries, with or without interest, during the year of which details are as follows.

(Rs. in Lac)

No. of Parties Loan Given* Maximum Balance Closing Balance 5 515.23 2016.18 1312.98

* includes interest amount.

b) In our opinion, interest, whenever charged and other terms and conditions of loans given by the company are not prima facie prejudicial to the interest of the company.

c) The Principal amounts are repayable on demand, while the interest is payable annually or stipulated if any at the discretion of Company.

d) In respect of said loan and interest thereon, there are no overdue amounts of more than Rs. One Lakh as informed to us as by the Management;

e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken interest free unsecured loans from one of such companies listed in the register maintained under Section 301 of the Companies Act, 1956.

(Rs. in Lac)

No. of Parties Loan Taken Maximum Balance Closing Balance

1 1.35 3960.31 2991.89

f) In our opinion and according to the information and explanations given to us other terms and conditions of above loan taken are not prima facie prejudicial to the interest of the company.

g) In absence of any stipulated term for repayment of principal amount we are unable to comment on whether the principal amount is due for repayment.

iv. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, we have not observed any continuing failure to correct any weaknesses in the internal controls system.

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

a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, 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) As per information & explanations given to us and in our opinion, the transaction entered into by the company with parties covered u/s 301 of the Act does not exceed five lacs rupees in a financial year and therefore requirement of reasonableness of transactions as to be reported under this clause does not arises;

vi. According to the information and explanations given to us, the Company has not accepted any deposits during the year from the public, within the meaning of the provisions of Section 58A and 58AA of the Companies Act, 1956 and rules made there under. Therefore, the provisions of Clause (vi) of paragraph 4 of the said Order are not applicable to the company.

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 Companies (Cost Accounting Records) Rule, 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 determine 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, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes.

x. The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

xi. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

xii. In our opinion and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. In our opinion, 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 Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

xiv. According to information and explanations given to us, the Company is trading in Shares, Mutual funds & other Investments. Proper records & timely entries have been maintained in this regard & further investments specified are held in their own name.

xv. According to the information and explanations given to us, the Company has given Corporate Guarantee to the banks towards the loans taken by one of its subsidiary, amounting to Rs. 3190 Lac. In our opinion and as per the information and explanation given, terms and conditions of those corporate guarantees are not prejudicial to the interest of the company.

xvi. Based on our audit procedures and on the information given by the management, we report that the company has not raised any new term loans during the year. The term loan outstanding at the beginning of the year, have been applied for the purposes for which they were raised.

xvii. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we are of the opinion that there are no funds raised on short-term basis have been used for long-term investment by the Company.

xviii. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

xix. The Company has not issued any debentures. Therefore, the provisions of Clause (xix) of paragraph 4 of the said Order are not applicable to the Company.

xx. The Company has not raised any money by public issue during the year covered by our report. Therefore, the provisions of clause (xx) of paragraph 4 of the said Order are not applicable to the Company.

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

For BHUWANIA & AGRAWAL ASSOCIATES Chartered Accountants Firm Registration No. 101483W

ABHISHEK JAIN Partner Membership No. 509839

Place: Mumbai Date : 30th May, 2014

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Konark Synthetic Limited, which comprise the Balance Sheet as at 31st March, 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 accounting principles generally accepted in India, including 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 except non provision of Gratuity as prescribed by (AS-15) exact quantum are unascertained refer Note Number 26:

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

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

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

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 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 sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable except for the non provision of Gratuity as referred in Note No. 26 of the Notes on Account;

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

ANNEXURE TO THE AUDITORS'' REPORT

Referred to in Paragraph 1 under the heading of "Report on other Legal and Regulatory Requirements" of our report of even date, we report that:

1. In respect of its Fixed Assets:

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

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

(c) In our opinion and according to the information and explanations given to us, no fixed asset has been disposed during the year and therefore does not affect the going concern assumption.

2. In respect of its Inventories:

(a) As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

(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 on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. In respect of the 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) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has granted unsecured loans to its subsidiaries with or without interest during the year of which details are as follows.

* includes interest amount.

b) In our opinion, interest where charged and other terms and conditions of loans given by the companies are prima facie not prejudicial to the interest of the Company.

c) The Principal amounts are repayable over a period of three to five years, while the interest is payable annually or stipulated if any at the discretion of Company.

d) In respect of said loan and interest thereon, there are no over due amounts.

e) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has taken interest free unsecured loans from ssociate Company listed in the register maintained under Section 301 of the Companies Act, 1956.

f) In our opinion and according to the information and explanations given to us other terms and conditions of above loan taken is prima facie not prejudicial to the interest of the Company.

g) In absence of any stipulated term for repayment of principal amount we are unable to comment on whether the principal amount is due for repayment.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, we have not observed any continuing failure to correct any weaknesses in the internal controls system.

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

a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, 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) As per information and explanations given to us and in our opinion, the transaction entered into by the Company with parties covered u/s 301 of the Act does not exceeds five lacs rupees in a financial year therefore requirement of reasonableness of transactions does not arises.

6. The Company has not accepted any deposits from the public covered under Section 58A and 58AA of the Companies Act, 1956.

7. As per information and explanations given by the management, the Company has an internal audit system commensurate with its size and the nature of its business.

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rule, 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 determine whether they are accurate or complete.

9. In respect of statutory dues:

(a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there is no amounts payable in respect of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty and Excise Duty which have not been deposited on account of any disputes.

10. The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

12. According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund or a nidhi /mutual benefit fund/society. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

14. According to information and explanations given to us, the Company is trading in Shares, Mutual funds & other Investments. Proper records & timely entries have been maintained in this regard & further investments specified are held in their own name.

15. According to the information and explanations given to us, the Company has given Corporate Guarantee to the banks towards the loans taken by one of its subsidiary, amounting to Rs. 2706.00 Lac. In our opinion and as per the information and explanation given, terms and conditions of those corporate guarantees are not prejudicial to the interest of the Company.

16. Based on our audit procedures and on the information given by the management, we report that the Company has not raised any new term loans during the year except vehicles and property loans. The term loan outstanding at the beginning of the year, have been applied for the purposes for which they were raised.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2013, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. The Company has no outstanding debentures during the period under audit.

20. The Company has not raised any monies by public issue during the year.

21. Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For BHUWANIA & AGRAWAL ASSOCIATES

Chartered Accountants

Firm Registration No. 101483W

N. K. AGRAWAL

Partner

Membership No. 34659

Place: Mumbai

Date : 30th May, 2013

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Mar 31, 2012

1. We have audited the attached Balance Sheet of Konark Synthetic Limited ("the Company") as at 31st March, 2012, and the related Statement Profit and Loss and Cash Flow Statement of the Company for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors' Report) Order, 2003 (CARO), and 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, we give in the Annexure hereto a statement on the matters specified in paragraphs 4 & 5 of the said Order.

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

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

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

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

d) In our opinion, the attached Balance Sheet, Statement of Profit and Loss dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) ofthe Companies Act, 1956 to the extent applicable except for the non provision of Gratuity as referred in note no. 26 of notes on account.

e) On the basis of written representations received from the Directors, as on 31stMarch, 2012 and taken on record by Board of Directors, none ofthe Directors are disqualified as on 31st March, 2012from being appointed as Directors in term of clause (g) of sub-section (1) of Section 274 ofthe Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanation given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and give a true & fair view in conformity with the accounting principle generally accepted in India:

i. In the case of Balance Sheet ofthe state of affairs ofthe Company as at 31st March, 2012;

ii. In the case of the Statement of Profit and Loss of the Profits for the year ended on that date and

Hi. In the case ofthe Cash Flow Statement, ofthe cash flows ofthe Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in paragraph 3 of our report of even date to the members of Konark Synthetic Limited on the accounts for the year ended 31st March, 2012)

i. In respect of the Fixed Assets,

a) The company has maintained proper records showing full particulars, including quantitative details and situations of fixed assets.

b) As per the information and explanations given to us, physical verification of fixed assets has been carried out by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable, having regard to the size of the Company and nature of its business.

c) No substantial part of fixed assets has been disposed off during the year under review, which could affect the going concern status of the company.

ii. In respect of the inventories:

a) As per the information furnished, the inventories have been physically verified during the year by the management. In our opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

b) In our opinion and according to the information and explanations given to us, procedures of physical verification of inventory 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 inventory. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii. a) In respect of loans granted, secured or unsecured, to the companies, firms or other parties, which are its subsidiaries, covered in the Register maintained under section 301 of the Companies Act, 1956, we report as per the information and explanations provided to us, that, there are three parties to whom interest free unsecured loans have been given and total amount of such loan given was Rs. 1389.81 Lacs during the year. Details of the same are provided as under:

(Rs. in Lac)

No. of Parties Relationship with Company Loan Given Closing Balance

3 Subsidiaries 1389.80 1172.69

b) In our opinion, other terms and conditions of loans given by the companies are prima facie not prejudicial to the interest of the company.

c) In the absence of any stipulated term for repayment of principal amount we are unable to comment on whether the payment of the principal amount is regular.

d) As stated above in the absence of any stipulated term for repayment of principal amount, we are unable to comment on whether there has been any overdue amount of Rs. One Lac for more than one year.

e) In respect of loans taken, secured or unsecured, from the companies, firms or other parties covered in Register maintained under Section 301 of Companies Act, 1956, we report as per the information and explanations provided to us, that, there is one party from whom interest free unsecured loans has been taken, details of the which has been given below:

(Rs. in Lac)

No.of Parties Relationship with Company Loan Given Closing Balance

1 Associate Concern 1068.37 2108.71

f) In our opinion and according to the information and explanations given to us other terms and conditions of above loan taken is prima facie not prejudicial to the interest of the company.

g) In absence of any stipulated term for repayment of principal amount we are unable to comment on whether the principal amount is due for repayment.

iv. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size ofthe Company and the nature of its business with regard to purchase of fixed assets. The Company has not started its operations and therefore internal control in respect of purchase of inventory and sale of goods and services does not arise. During the course of our audit, we have not come across any continuing failure to correct major weaknesses in internal control system.

v. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we report that the transactions that need to be entered into a register in pursuance of section 301 of the Act, have been so entered.

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

vi. According to the information and explanations given to us, the Company has not accepted any deposits during the year from the public, within the meaning of the provisions of Sections 58A and 58AA of the Companies Act, 1956 and rules made there under. Therefore, the provisions of clause (vi) of paragraph 4 ofthe said Order are not applicable to the Company.

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. The Central Government has prescribed maintenance of the cost records under section 209(1)(d) of the Companies Act, 1956 in respect of textile manufacturing activity of the company. We have broadly reviewed the books of accounts and records maintained by the Company in this connection and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination ofthe records with a view to determining whether they are accurate or complete.

ix. a) According to the information and explanations given to us and the records examined by us, the company has been regular in depositing with appropriate authorities undisputed statutory dues including Income Tax, Provident Fund, Sales Tax and any other statutory dues wherever applicable. According to the information and explanations given to us, no undisputed arrears of statutory dues were outstanding as at 31st March, 2012 for a period of more than six months from the date they became payable.

b) According to the records ofthe Company, and information and explanations given to us there are no dues of Income tax / Sales Tax/ Wealth Tax/ Service Tax/ Custom Duty/ Excise Duty/ Cess which has not been deposited on account of disputes.

x. There are no accumulated losses ofthe Company as on 31st March, 2012. The Company has not incurred any cash losses during the financial year covered by our audit and the immediately preceding financial year.

xi. As per the information and explanations given to us and based on our audit, the Company has not defaulted in repayment of dues to financial institution or bank.

xii. Based on our examination of the records and the information given to us, the Company has not granted any loans and/or advances on the basis of security byway of pledge of shares, debentures and other securities. Therefore, the provisions of clause (xii) of paragraph 4 ofthe said Order are not applicable to the Company.

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 ofthe said Order are not applicable to the Company.

xiv. Based on our examination ofthe records and the information given to us, the Company has not dealt or traded in shares, securities, debentures and other investments. Therefore, the provisions of clause (xiv) of paragraph 4 ofthe said Order are not applicable to the Company.

xv. According to the information and explanations given to us, the Company has given corporate guarantees to the banks for loans taken by one of its subsidiary, amounting to Rs. 2706.00 Lac. In our opinion and as per the information and explanations given, terms and conditions of these corporate guarantees are not prejudicial to the interest ofthe Company.

xvi. The company has not taken any term loans during the year. Therefore, the provisions of clause (xvi) of paragraph 4 ofthe said Order are not applicable to the Company.

xvii. In our opinion and according to information and explanations made available to us, no short term funds have been utilized for long term purposes during the year.

xviii. During the year, the Company has not made any preferential allotment of shares to the parties and companies covered in the Register maintained under Section 301 ofthe Companies Act, 1956.

xix. The Company has not issued any debentures. Therefore, the provisions of clause (xix) of paragraph 4 of the said Order are not applicable to the Company.

xx. The Company has not raised any money by public issues during the year covered by our report. Therefore, the provisions of clause (xx) of paragraph 4 ofthe said Order are not applicable to the Company.

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

For Bhuwania & Agrawal Associates

Chartered Accountants

(Firm Registration No. 101483W)

Abhishek Jain

Place: Mumbai Partner

Date : 30th May 2012 Membership No. 509839

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Mar 31, 2010

1. We have audited the attached Balance Sheet of KONARK SYNTHETIC LIMITED as at 31st March 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. 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 & 5 of the said order.

4. M/s India Denim Limited a subsidiary company of the Company has been audited separately by the Auditors appointed by the subsidiary company and their report of the same has been considered by us for the consolidated Balance Sheet and Profit & loss Account forthe year ended as on 31st March 2010.

5. Further to our comments in the annexure referred to 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 purpose 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 my examination of the books.

c. The Balance Sheet, the Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with Books of Account.

d. In our opinion the attached Balance Sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956 to the extent applicable except non provision of Gratuity as referred in Note No. 2 of Schedule 17.

e. On the basis of written representations received from the Directors, as on March 31st, 2010 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31s1, 2010 from being appointing as Directors in term of Clause (g) of Sub-Section (1) of Section 274 of the Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with significant accounting policies and along with Note No. 2 of the Notes on Accounts regarding non provision of Gratuity as the exact amount of such provision is not ascertainable due to unavailability of information required and other notes thereon give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

i. in case of Balance Sheet of the state of affairs of the Company as at 31st March 2010;

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

iii. In the case of the Cash Flow Statement of the Cash Flow for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Statement referred to in paragraph (3) of the Auditors Report of even date to the Members of KONARK SYNTHETIC LIMITED on the accounts forthe year ended 31 "March 2010.

As required by the Companies (Auditors Report) Order 2003, issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as consider appropriate and as per the information and explanations given to us during the course of the audit.

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

ii) As per the information and explanations given to us, physical verification of fixed assets has been carried out by the Company and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification is reasonable and adequate in relation to the size of the Company and nature of its business.

iii) In our opinion and according to the information & explanation given to us, the Company has not dfeposed off substantial part of fixed assets during the year and the going concern status of the Company is not affected.

2 i) As per the information furnished, the inventories have been physically verified during the year by the management. Incur opinion, having regard to the nature and location of stocks, the frequency of the physical verification is reasonable.

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

iii) The company is maintaining proper records of inventory. In our opinion, discrepancies noticed on physical verification of stocks were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3. a) As informed to us, during the year the Company has not given any secured / unsecured loans to the persons covered in the register maintained u/s 301 of the Companies Act 1956. Hence othersub-clause (b), (c) and (d) are not applicable for the year under reivew.

b) As per information furnished, during the year the company has taken interest free unsecured loans from companies under same management and the parties covered in the register maintained u/s 301 of The Companies Act, 1956. Details are as follows:

(Amt. in Lac)

No. of Accounts Amount of Loan Taken Maximum Outstanding CI. Balance

2 403.00 202.75 2.00

c) Otherterms & conditions of the loans taken are prima facie not prejudicial to the interest of the company.

d) The company is regular in repayments of principal dues if any.

e) There was no overdue amount of Rs. 1.00 Lac more than one year as stipulated if any.

4. In ouropinion 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 and fixed assets and forthe sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal controls.

5. In respect of transaction entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956:

i) To the best of our knowledge & belief and according to the information and explanations given to us, transactions that need to be entered in the Register have been so entered.

ii) According to the information and explanations given to us, these contracts or transactions have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. According to the information and explanation given to us, the company has not accepted any deposits during the year from the public within the meaning of the provision of the Section 58 A and Section 58 AA of the Companies Act, 1956 and the rules framed there under. Hence clause 4(vi) of the Orderis 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. The Central Government has prescribed maintenance of the cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of textile manufacturing activity of the company. We have broadly reviewed the books of accounts and records maintained by the Company in this connection and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete.

9. According to the information & explanation given to us in respect of statutory and other dues:

i) The company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Investor Education & Protection Fund, and Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year.

ii) According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31s March 2010 for a period of more than six months from the date they became payable except C.S.T. amounting to Rs. 10800/-which was paid by company on 29.04.2010.

iii) According to the information and explanation given to us, that there is no disputed statutory dues outstanding as on 31st March 2010.

10. The Company does not have any accumulated losses at the end of the financial year. The company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanation given by the Management, we are of the opinion that the Company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders during the year.

12. In our opinion and according to the explanation given to us and based on the information available, 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.

13. In our opinion, the Company is not a chit fund or nidhi / mutual benefit fund / societies. Therefore clause 4 (xiii) of the Companies (Auditor report) order, 2003 is not applicable to the Company.

14. During the year the company has not made any dealing or trading in shares, securities, debentures and other investment.

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

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

17. 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.

18. During the year the Company has not made any preferential allotment of equity shares.

19. During the year covered by our audit report, the company has not issued any secured debentures.

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

21. 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 has been noticed or reported during the year.

For, BHUWANIA & AGRAWAL ASSOCIATES

Chartered Accountants

(Firm Registration No. 101483W)

PLACE: MUMBAI. (N.K.AGRAWAL)

DATE : 29th May 2010. Partner

M. NO. 34659