Auditor Report of Kunststoffe Industries Ltd.

Mar 31, 2016

To

The Members

KUNSTSTOFFE INDUSTRIES LIMITED

Mumbai

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of KUNSTSTOFFE INDUSTRIES LIMITED (''the Company''), which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year on that date, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

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

Auditor''s Responsibility

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

We 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 sub-section 10 of Section 143 of the Act and other applicable authoritative pronouncements 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 the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, and subject to Note nos. 20, 21, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements:

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

2. As required by sub section 3 of Section 143 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, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2016 from being appointed as a director in terms of sub-section 2 of Section 164 of the Act.

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

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

(i) The Company does not have any pending litigations which would impact its financial position.

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

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

Annexure A

The Annexure A referred to in Para 1 - Report on Other Legal Regulatory Requirements of our Independent Auditor''s

Report to the members of the Company on the standalone financial statements for the year ended 31 March 2016, we report that:

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

(b) As explained to us, the fixed assets have been physically verified by the management at reasonable intervals during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. No material discrepancies were noticed on such verification;

(c) In our opinion and according to the information and explanations given to us, substantial part of the fixed assets has not been disposed off by the company, during the year;

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the company;

ii) As the company has not purchased / sold goods during the year nor is there any opening stock, requirement of reporting on physical verification of stock or maintenance of inventory records, in our opinion, does not arise;

iii) The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013;

iv) The Company has not given loans, or made investments, or given guarantees and provided security in terms of provisions of section 185 and 186 of The Companies Act, 2013.

v) The Company has not accepted deposits and hence the directives issued by the Reserve Bank of India and the provisions of the sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under are not required to be complied with by the Company.

vi) We have been informed that the Company is not required to maintain cost record under sub-section (1) of section 148 of the Companies Act, 2013.

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 including provident fund, employee''s state insurance, income tax, sales tax, custom Duty, service tax, value added tax, cess and any other statutory dues have been regularly deposited during the year by the Company with the appropriate authorities and no undisputed amounts payable were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable

(b) According to the information and explanations given to us, there are no disputed amounts of income tax, sales tax, custom duty, service tax or value added tax which have not been deposited with the concerned authorities;

viii) In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to a bank. The Company has not obtained any borrowing from any financial institutions, Government or by way of debentures;

ix) On the basis of records examined by us and the information and explanations given to us, the Company has not raised money by way of initial public offer or further public offer during the year

x) In our opinion and according to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

xi) In our opinion and according to the information and explanations given to us, and based on our examination of the records of the Company, the Company has paid managerial remuneration as per Section 197 read with Schedule V to the Companies Act, 2013.

xii) In our opinion and according to the information and explanations given to us, the company is not a Nidhi company. Accordingly paragraph 3(12) is not applicable.

xiii) In our opinion and according to the information and explanations given to us, and based on our examination of the records of the Company, all transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable and the details of the same have been disclosed in the financial statements as required by the applicable accounting standards;

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

xv) According to the information and explanations given to us, and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with them. Accordingly paragraph 3(15) of the order is not applicable.

xvi) The Company is not required to be registered under section 45-1A of the Reserve Bank of India, 1934.

Annexure B

The Annexure B referred to in Para 2(f) - Report on other Regulatory requirements of our Independent Auditor''s Report to the Members of the Company on the Internal Financial Controls under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 ("the act") for the year ended 31st March, 2016

We have audited the internal financial controls over financial reporting of FIBERWEB (INDIA) LIMITED ("the company") as of 31st March, 2016 in conjunction with our audit of the financial statements of the company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of internal financial controls over financial Reporting issued by the institute of Chartered Accountants of India." These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors. The accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the companies Act, 2013.

Auditor''s Responsibility

Our responsibility is to express an opinion on the company''s internal financial controls over financial reporting based on our audit in accordance with the Guidance Note on Audit of internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

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

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

In our opinion, the company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

FOR A. V. Jobanputra & Co.

CHARTERED ACCOUNTANTS

Firm Registration No.: 104314W

A. V. Jobanputra

PROPRIETOR

(MEMBERSHIP NO : 016352)

Place:- Mumbai

Date: - 04/08/2016

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Mar 31, 2015

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

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 at rue and fair view of he 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 oft he Act for safeguarding oft he 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 at rue and fair view and are free from material misstatement,whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions oft he Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions oft he 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 oft he risks of material misstatement oft he financial statements, weathered to fraud or error. In making those risk assessments,the auditor considers internal financial control relevant tot he Company's preparation oft he financial statements that give at rue and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors,as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according tot he explanations given to us and subject to Note no.21 (IV)(B), (IV)(C), 22(I), (II), (III), (IV), (V), (VI),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, and its Loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

I. As required by 'the Companies (Auditor's Report) Order, 2015', issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the "Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

II. As required by Section 143 (3) of the Act, were port that:

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

(b) In our opinion,proper books of account as required bylaw have been kept by the Company so far as it appears from our examination oft hose 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 financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) In our opinion, the company, based on the facts of its case and its background is a going concern.

(f) 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.

(g) Since the central Government has not issued any notification as to the rate at which the cess is to be paid under Section 441 of the Act, 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 REFERRED TO IN PARAGRAPH I OF OUR REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS OUR AUDITORS' REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31st MARCH, 2015 OF KUNSTSTOFFE INDUSTRIES LIMITED

On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that: -

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

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such verification;

(c) In our opinion and according to the information and explanations given to us, substantial part of the fixed assets has not been disposed off by the Company, during the year;

(ii) As the company has not purchased / sold goods during the year nor is there any opening stock, requirement of reporting on physical verification of stocks or maintenance of inventory records, in our opinion, does not arise;

(iii) The Company had neither taken nor granted any loans, secured or unsecured from / to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956. Hence, the question of reporting whether the rate of interest and other terms and conditions of such loans are prima facie prejudicial to the interest of the company, whether reasonable step for recovery / payment of the over dues of such loans are taken does not arise;

(iv) The company has an internal audit system commensurate with the size of the company and nature of its business

(v) The Company has not accepted any deposits from the public during the year, Therefore the provisions of clause 3 (v) of the Companies (Auditors Report) Order, 2015 are not applicable to the Company;

(vi) We are unable to offer any comment on the clause no. (vi) pertaining to maintenance of cost records as the cost auditor has not completed cost audit till date;

(vii) (a) According to the records of the Company, it has been generally regular in depositing, wherever applicable, undisputed statutory dues including Investor Education and Protection Fund, Wealth Tax, Custom Duty, Cess and other statutory dues with the appropriate authorities.

(b) No Un-disputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty and Cess were in arrears, as at 31st March, 2015, for a period of more than six months from the date they became payable;

(c) There are no dues of sales tax , income tax, custom tax , wealth tax, excise duty and Cess which have not been deposited on account of any dispute;

(viii) The accumulated losses of the company are more than 50% (Fifty Percent) of its Net Worth and hence the company has filed a reference with the BIFR, New Delhi Under the SICA 1985 which has been registered by the BIFR. the company registered under the Sick Unit vide BIFR's order dated 18.01.2007. The company has earned Cash Profit of Rs. 42,84,600/- in the current financial year and of Rs. 72,53,433/- in the immediate preceding financial year. In arriving at the accumulated loss and net worth, we have considered the qualifications which are quantifiable in the Audit Report of the year to which these losses pertain;

(ix) On the basis of records examined by us and the information and explanations given to us, the Company has not accepted any loans from any financial institution or banks or issued debentures. Therefore the provisions of clause 3 (ix) of the Companies (Auditors Report) Order, 2015 are not applicable to the Company ;

(x) According to the information and explanations given to us, and the representations made by the management, the Company has not given any guarantee for loans taken by others from banks or financial institutions;

(xi) On the basis of the records examined by us, we have to state that, the Company has not obtained any term loans during the year;

(xii) According to the information and explanations given to us, and to the best of our knowledge and belief, no fraud on or by the Company, has been noticed or reported by the Company during the year;

For P.M.Turakhia & Associates For A.V. Jobanputra & Co. Chartered Accountants Chartered Accountants Firm Registration No: 111086W Firm Registration No: 104314W

M.D.Turakhia A.V.Jobanputra Partner Proprietor Membership No. 017399 Membership No. 016352

Place : Mumbai

Date : 30.05.2015

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Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us and subject to Note 21(VI)(C), 22(I), (II), (III), (IV), (V), (VI), 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 31st March, 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 sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

(c) The company does not have any Branch office and accordingly this clause is not applicable to the company;

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

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

(f) On the basis of the written representations received from the directors as on 31st March, 2014 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.

(g) Since the central Government has not issued any notification as to the rate at which the cess is to be paid under Section 441 of the Act, 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 THE AUDITOR''S REPORT

The Annexure referred to in our report to the members of KUNSTSTOFFE INDUSTRIES LIMITED for the year ended 31 March, 2014. We report that:-

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

(b) All the Assets have not been physically verified by the Management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its Fixed Assets. No material discrepancies were noticed on such verification;

(c) During the year, the Company has not disposed off a major or substantial part of fixed assets so as to affect the going concern status of the Company;

ii) As the company has not purchased/sold goods during the year nor is there any opening stock, requirement of reporting on physical verification of stocks or maintenance of inventory records, in our opinion, does not arise;

iii) The Company had neither taken nor granted any loans, secured or unsecured from/to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956. Hence, the question of reporting whether the rate of interest and other terms and conditions of such loans are prima facie prejudicial to the interest of the company, whether reasonable step for recovery/payment of the over dues of such loans are taken does not arise;

iv) There is adequate inventory control procedure commensurate with the size of the company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in internal control;

v) Based on the audit procedures applied by us and the information and explanations provided by the management, we are of the opinion that there were no transactions during the year that need to be entered in the register maintained under section 301 of the Companies Act, 1956;

vi) Based on our scrutiny of the company''s records and according to the information and explanations provided by the management, in our opinion, the company has not accepted any public deposits so far upto 31st March, 2014;

vii) The company has an internal audit system commensurate with the size of the company and nature of its business;

viii) We are unable to offer any comment on the clause no. (viii) pertaining to maintenance of cost records as the cost auditor has not completed cost audit till date;

ix) (a) The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax Wealth Tax, Custom Duty, Excise Duty, and Cess any other material statutory dues applicable to it;

(b) No Un-disputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Custom Duty, Excise Duty and Cess were in arrears, as at 31st March, 2014, for a period of more than six months from the date they became payable;

(c) There are no dues of sales tax, income tax, custom tax, wealth tax, service tax, excise duty and Cess which have not been deposited on account of any dispute;

x) The accumulated losses of the company exceeds 50% (fifty percent) of its Net Worth and hence the Company has filed a reference with BIFR,New Delhi under the SICA 1985 which has been registered by the BIFR vide ordered passed dated 18/01/2007. The Company has incurred Cash Profit of Rs. 72,53,433/- in the Current Financial Year and a Cash Profit of Rs. 38,69,925/- in the immediately preceding financial Year. In arriving at the accumulated loss and net worth, we have considered the qualifications, which are quantifiable in the Audit Reports of the year to which these losses pertain;

xi) The Company has not granted any Loans & Advances on the basis of Security by way Pledge of Shares, Debentures and other securities. Hence, the provisions as to whether the adequate documents and records are maintained and to point out the deficiencies, if any in this regard are not applicable;

xii) The Company is not a Chit Fund or Nidhi/Mutual Benefit Fund/Society. Hence, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the Company;

xiii) The Company is not dealing in or trading in Shares, Securities, Debentures and other investments. Hence, the provisions of Clause 4 (xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company;

xiv) The company has not given any guarantee for loans taken by others from Bank or Financial Institution. Accordingly, the provisions as to whether the terms & conditions in respect thereof are prejudicial to the interest of the Company are not applicable to the company;

xv) The company has not recorded, obtained any terms loans. Hence, comments under the clause are not called for the provisions as to whether the price at which shares have been issued is prejudicial to the interest of the company are not applicable;

xvi) No funds raised on short term basis have been used for the long term investment by the company;

xvii) The company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956. Hence the provisions as to whether the price at which shares have been issued is prejudicial to the interest of the company are not applicable;

xviii) According to the records of the company, the company has not issued any Debentures;

xix) The company has not raised any money by public issue. Hence the provisions as to whether the management has disclosed on the end use of money raised by public issue and the same has been verified are not applicable;

xx) No fraud on or by the company has been noticed or reported during the course of our Audit;

For P.M. Turakhia & Associates Chartered Accountants Firm Registration No: 111086W

M.D. Turakhia Partner Membership No: 017399

Place: Mumbai Date: 30.05.2014

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Mar 31, 2013

Report on the Financial Statements

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

Management’s Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us and subject to Notes B.2, B.3, B.4, B.5 and B.6, the fnancial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

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

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

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

(c) The Balance Sheet, Statement of Proft 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, Statement of Proft and Loss, and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act.

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

ANNEXURE TO THE AUDITOR’S REPORT

The Annexure referred to in our report to the members of Kunststoffe Industries Ltd (''the Company’) for the year ended 31 March 2013. We report that: -

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

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

(c) During the year, the Company has not disposed off major or substantial parts of fxed assets so as to affect the going concern status of the Company.

ii) As the company has not purchased / sold goods during the year nor is there any opening stocks, requirement of reporting on physical verifcation of stocks or maintenance of inventory records, in our opinion, does not arise.

iii) The Company had neither taken nor granted any loans, secured or unsecured from / to Companies, frms or other parties covered in the register maintained under section 301 of the Companies Act 1956. Hence, the question of reporting whether the rate of interest and other terms and conditions of such loans are prima facie prejudicial to the interest of the company, whether reasonable step for recovery / payment of the overdues of such loans are taken does not arise.

iv) There is adequate inventory control procedure commensurate with the size of the company and nature of its business, for the purchase of inventory and fxed assets and for the sale of goods. There is no continuing failure to correct major weaknesses in internal control.

v) Based on the audit procedures applied by us and the information and explanations provided by the management, we are of the opinion that there were no transactions during the year that need to be entered in the register maintained under section 301 of the Companies Act,1956.

vi) Based on our scrutiny of the company’s records and according to the information and explanations provided by the management, in our opinion, the company has not accepted any public deposits so far upto 31st March, 2013.

vii) The company has an internal audit system commensurate with the size of the company and nature of its business.

viii) We are unable to offer any comment on the clause no. (viii) pertaining to maintenance of cost records as the cost auditor has not completed cost audit till date.

ix) (a) The company is regular in depositing with appropriate authority undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues applicable to it.

(b) No un-disputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty and Cess were in arrears, as at 31st March, 2013 for a period of more than six months from the date they became payable.

(c) There are no dues of sales tax / income tax / custom tax / wealth tax / excise duty / Cess which have not been deposited on account of any dispute.

x) The accumulated losses of the company exceeds 50% (ffty percent) of its Net Worth and hence the Company has fled a reference with BIFR,New Delhi under the SICA 1985 which has been registered by the BIFR vide ordered passed dated 18/01/2007. The Company has incurred Cash Proft of Rs.38,69,925/- in the Current Financial Year and a Cash Proft of Rs.3,80,105 /- in the immediately preceding Financial Year. In arriving at the accumulated loss and net worth, we have considered the qualifcations, which are quantifable in the Audit Reports of the year to which these losses pertain.

xi) Based on the 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 fnancial institution, bank or debenture holders.

(xii) The Company has not granted any Loans & Advances on the basis of Security by way Pledge of Shares, Debentures and other securities. Hence, the provisions as to whether the adequate documents and records are maintained and to point out the defciencies, if any in this regard are not applicable.

xiii) The Company is not a Chit Fund or Nidhi / Mutual Beneft Fund/Society. Hence the provisions of clause 4(xiii) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

xiv) The Company is not dealing in or trading in Shares, Securities, Debentures and other investments. Hence, the provisions of Clause 4 (xiv) of the Companies (Auditor’s Report) Order, 2003 are not applicable to the Company.

xv) The company has not given any guarantee for loans taken by others from Bank or Financial Institution. Accordingly, the provisions as to whether the terms & conditions in respect thereof are prejudicial to the interest of the Company are not applicable.

xvi) According to the record of the company, the company has not obtained any term loans. Hence, comments under the clause are not called for.

xvii) On an overall examination of the Balance Sheet of the Company, we report that, no funds raised on short-term basis have been used for long-term investment.

xviii) The company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act.1956. Hence the question whether the price at which shares have been issued is prejudicial to the interest of the company are not applicable.

xix) As the Company has not issued any Debentures, the provisions as to whether securities or charge have been created in respect of Debentures issued are not applicable.

xx) The company has not raised any money by public issue. Hence the provisions as to whether the management has disclosed on the end use of money raised by public issue and the same has been verifed are not applicable.

xxi) No fraud on or by the company has been noticed or reported during the course of our Audit.

FOR P.M. TURAKHIA &ASSOCIATES

Firm Registration No: 111086w

Place: MUMBAI (M.D. TURAKHIA)

Date : 30.05.2013 Membership No: 017399

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Mar 31, 2012

1) We have audited the attached Balance Sheet of KUNSTSTOFFE INDUSTRIES LTD., as at 31st March 2012 and also the Profit and Loss Account for the year ended on that date annexed thereto. These Financial Statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these Financial Statements based on our Audit.

2) We conducted our Audit in accordance with the Auditing Standards generally accepted in India. These 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 includes assessing the Accounting Principles used and significant estimates made by management, as well as evaluating the overall Financial Statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the companies (Auditors' Report) Order, 2003 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a Statement on the matters specified in Paragraph 4 and 5 of the said Order.

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

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

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

(iii) The Balance Sheet, Profit & Loss Account dealt with by this Report are in agreement with the Books of Account.

(iv) In our opinion, the Balance Sheet & Profit & Loss Account dealt with by this Report complies with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

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

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts give the information required by the Companies Act, 1956 in the manner so required and subject to notes on accounts in general and in particular Note B.2,B.3,B.4 & B.5 of Notes forming part of the accounts for the year ended 31.3.2012 give a True and Fair view in conformity with the generally accepted Accounting Principles in India.

a) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March 2012.

b) In the case of the Profit and Loss Account, of the loss for the year ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF "M/S KUNSTSTOFFE INDUSTRIES LTD." ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2012.

On the basis of the presentations received from the management and according to the explanation given, information furnished to us and on the basis of scrutiny of books & records, we are of the opinion that: -

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

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

(c) During the year, the Company has not disposed off major or substantia] parts of fixed assets so as to affect the going concern status of the Company

ii) As the company has not purchased / sold goods during the year nor is there any opening stocks, requirement of reporting on physical verification of stocks or maintenance of inventory records, in our opinion, does not arise.

iii) The Company had neither taken nor granted any loans, secured or unsecured from / to Companies, firms or other parties covered in the register maintained under section 301 of the Companies Act 1956.Hence, the question of reporting whether the rate of interest and other terms and conditions of such loans are prima facie prejudicial to the interest of the company, whether reasonable step for recovery / payment of the overdues of such loans are taken does not arise.

iv) There is adequate inventory control procedure commensurate with the size of the company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. There is no continuing failure to correct major weaknesses in internal control.

v) Based on the audit procedures applied by us and the information and explanations provided by the management, we are of the opinion that there were no transactions during the year that need to be entered in the register maintained under section 301 of the Companies Act, 1956.

vi) Based on our scrutiny of the company's records and according to the information and explanations provided by the management, in our opinion, the company has not accepted any public deposits so far upto 31st March,2012.

vii) The company has an internal audit system commensurate with the size of the company and nature of its business.

(viii) We are unable to offer any comment on the clause no.

(viii) pertaining to maintenance of cost records as the cost auditor has not completed cost audit till date.

ix) (a) The company is regular in depositing with appropriate authority undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues applicable to it.

(b) No un-disputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty and Cess were in arrears, as at 31 st March, 2009 for a period of more than six months from the date they became payable.

(c) There are no dues of sales tax / income tax / custom tax / wealth tax / excise duty / Cess which have not been deposited on account of any dispute.

x) The accumulated losses of the company exceeds 50% (fifty percent) of its Net Worth and hence the Company has filed a reference with BIFR,New Delhi under the SICA 1985 which has been registered by the BIFR vide ordered passed dated 18/01/2007. The Company has incurred Cash Profit of Rs.3,80,105/- in the Current Financial Year and a Cash Profit of Rs.68,47,398 /- in the immediately preceding Financial Year. In arriving at the accumulated loss and net worth, we have considered the qualifications, which are quantifiable in the Audit Reports of the year to which these losses pertain.

xi) Based on the 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) The Company has not granted any Loans & Advances on the basis of Security by way pledge of Shares, Debentures and other securities. Hence, the provisions as to whether the adequate documents and records are maintained and to point out the deficiencies, if any in this regard are not applicable.

xiii) The Company is not a Chit Fund or Nidhi/Mutual Benefit Fund/Society. Hence the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

xiv) The Company is not dealing in or trading in Shares, Securities, Debentures and

other investments. Hence, the provisions of Clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

xv) The company has not given any guarantee for loans taken by others from Bank or Financial Institution. Accordingly, the provisions as to whether the terms & conditions in respect thereof are prejudicial to the interest of the Company are not applicable.

xvi) According to the record of the company, the company has not obtained any term loans. Hence, comments under the clause are not called for.

xvii) On an overall examination of the Balance Sheet of the Company, we report that, no funds raised on short-term basis have been used for long-term investment.

xviii) The company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act. 1956. Hence the question whether the price at which shares have been issued is prejudicial to the interest of the company are not applicable.

xix) As the Company has not issued any Debentures, the provisions as to whether securities or charge have been created in respect of Debentures issued are not applicable.

xx) The company has not raised any money by public issue. Hence the provisions as to whether the management has disclosed on the end use of money raised by public issue and the same has been verified are not applicable.

xxi) No fraud on or by the company has been noticed or reported during the course of our Audit.

FOR P. M. TURAKHTA & ASSOCIATES

Chartered Accountants

(PRAGNA PATEL)

Partner

PLACE: Mumbai DATE: 30.07.2012

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Mar 31, 2010

1) We have audited the attached Balance Sheet of KUNSTSTOFFE INDUSTRIES LTD., as at 31st March 2010 and also the Profit and Loss Account 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. These 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 includes assessing the Accounting Principles used and significant estimates made by management, as well as evaluating the overall Financial Statements presentation. We believe that our audit provides a reasonable basis for our opinion.

3) As required by the companies (Auditors Report) Order, 2003 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a Statement on the matters specified in Paragraph 4 and 5 of the said Order.

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

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

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

(iii) The Balance Sheet, Profit & Loss Account dealt with by this Report are in agreement with the Books of Account.

(iv) In our opinion, the Balance Sheet & Profit & Loss Account dealt with by this Report complies with the Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

(v) On the basis of the 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 31sl March 2010 from being appointed as a director in terms of Section 274 (1) (g) of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said Accounts give the information required by the Companies Act, 1956 in the manner so required and subject to notes on accounts in general and in particular Note "A" point No.2 and Note "C" point No.3 of Schedule 18 give a True and Fair view in conformity with the generally accepted Accounting Principles in India.

a) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31s1 March 2010.

b) In the case of the Profit and Loss Account, of the loss for the year ended on that date.



ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF "M/S KUNSTSTOFFE INDUSTRIES LTD." ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2010.



On the basis of the presentations received from the management and according to the explanation given, information furnished to us and on the basis of scrutiny of books & records, we are of the opinion that:

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

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

(c) During the year, the Company has not disposed off major or substantial parts of fixed assets so as to affect the going concern status of the Company.

ii) (a) The Inventory has been physically verified during the year by the management. The frequency of verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The Company has maintained proper records of inventory. The material discrepancies noticed on physical verification have been properly dealt with in the books of accounts.

iii) (a) The Company had 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.

(b) Hence the provisions as to whether the rate of interest and other terms and conditions of loans given or taken by the company, secured or unsecured, are prima facie prejudicial to the interest of the company are not applicable.

(c) So also the provisions as to whether the receipt/ payment of principal and interest are also regular are not applicable.

(d) Similarly the provisions as to whether reasonable step have been taken by the Company for recovery / payment of the principal and interest, if the overdue amount is more than one lakh are not applicable.

(e) The Company has not taken any Loans, secured or unsecured from the Companies, firm or other parties covered in the register maintained under section 301 of the Act.

(f) Hence the provision as to whether the rate of interest and other terms and conditions of loans taken by the Company, secured or unsecured are prima facie Prejudicial to the interest of the Company are not applicable.

(g) So also the provisions as to whether the payment of the Principal amount and interest are also regular are not applicable.

iv) There is adequate inventory control procedure commensurate with the size of the company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. There is no continuing failure to correct major weaknesses in internal control.

v) (a) No transactions need to be entered in to a register in pursuance of section 301 of the Companies act 1956.

(b) The provisions that each of these transactions in pursuance of such Contracts or Arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time are not applicable.

vi) As the company has not accepted deposits from the public. The provision as to whether the directives issued by Reserve Bank of India and provision of section 58A and 58AA or any other relevant provisions of the act and rules framed there under, where applicable, have been complied with and in case of non-compliance, stating of nature of contraventions and whether the company has complied with the order of the Company Law board or National Company law Tribunal or Reserve Bank of India or any Court or any other Tribunal are not applicable.

vii) The company has an internal audit system commensurate with the size of the company and nature of its business.

viii) No maintenance of Cost Records has been prescribed by the Central Government under section 209 (1) (d) of the Companies Act 1956. Hence the provision as to whether such Accounts and Records have been made and maintained is not applicable.

ix) (a) The company is regular in depositing with appropriate authority undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues applicable to it.

(b) No un-disputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty and Cess were in arrears, as at 31st March, 2010 for a period of more than six months from the date they became payable.

(c) There are no dues of sales tax / income tax / custom tax / wealth tax / excise duty / Cess which have not been deposited on account of any dispute.

x) The accumulated losses of the company exceeds 50% (fifty percent) of its Net Worth and hence the Company has filed a reference with BIFR,New Delhi under the SICA 1985 which has been registered by the BIFR vide ordered passed dated 18/01/2007. The Company has incurred Cash Profit of Rs.50,88,504/- in the Current Financial Year a Cash Profit of Rs.23,78,398 /- in the immediately preceding Financial Year. In arriving at the accumulated loss and net worth, we have considered the qualifications, which are quantifiable in the Audit Reports of the year to which these losses pertain.

xi) The Company has defaulted in repayment of dues to the following financial Institution/s and /or Bank/s and / or Debenture holders in respect of the following amounts and the period mentioned there against :

Sr. No. Name of the Financial Principal Interest Period Institution / Banks Amount Amount

1. Bank of Baroda 2,54,55,888 - 14 Years

2. Gayatri Pipes & Fittings 28,74,50,443 - -

The Company has approached for one time settlement and has also submitted scheme for rehabilitation as per BIFR Order. BIFR has declared the company as Sick Company and as there is no default at present. Bank Of Baroda has assigned the debt to International Asset Reconstruction Co. Pvt. Ltd.

(xii) The Company has not granted any Loans & Advances on the basis of Security by way Pledge of Shares, Debentures and other securities. Hence, the provisions as to whether the adequate documents and records are maintained and to point out the deficiencies, if any in this regard are not applicable.

xiii) The Company is not a Chit Fund or Nidhi/Mutual Benefit Fund/Society. Hence, the provisions of clause 4(xiii) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xiv) The Company is not dealing in or trading in Shares, Securities, Debentures and other investments. Hence, the provisions of Clause 4 (xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

xv) The company has not given any guarantee for loans taken by others from Bank or Financial Institution. Accordingly, the provisions as to whether the terms & conditions in respect thereof are prejudicial to the interest of the Company are not applicable.

xvi) The Term Loans have been applied for the purpose for which they were obtained /raised.

xvii) On an overall examination of the Balance Sheet of the Company, We report that, no funds raised on short-term basis have been used for long-term investment.

xviii) The company has not made any preferential allotment of shares to parties and Companies covered in the Register maintained under section 301 of the Companies Act.1956. Hence the question whether the price at which shares have been issued is prejudicial to the interest of the company are not applicable.

xix) As the Company has not issued any Debentures, the provisions as to whether securities or charge have been created in respect of Debentures issued are not applicable.

xx) The company has not raised any money by public issue. Hence the provisions as to whether the management has disclosed on the end use of money raised by public issue and the same has been verified are not applicable.

xxi) No fraud on or by the company has been noticed or reported during the course of our Audit.

For P.M. TURAKHIA & COMPANY

Chartered Accountants

M.D. TURAKHIA

Proprietor

Place : Daman

Date : 30th July, 2010