Auditor Report of GB Global Ltd.

Mar 31, 2016

To the members of Mandhana Industries Limited

Report on the financial statements

We have audited the accompanying financial statements of Mandhana Industries Limited ("the Company''), which comprise the balance sheet as at 31 March 2016, 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 board of directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (''the Act'') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 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. 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 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 (Auditors Report) Order, 2016 (''the Order''), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013,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 B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

(b) In our opinion, proper books of 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 accounts.

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

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

(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 has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses on long term contracts including derivative contracts; and

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

ANNEXURE B REFERRED TO THE AUDITORS'' REPORT

(Referred to in paragraph 1 under ''Report on other legal and regulatory requirements'' of our report of even date)

i) (a) The Company is maintaining proper records to show full particulars including quantitative details and situation of all fixed assets.

(b) We are informed that the Company has formulated a program of physical verification of all the fixed assets over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the physical verification of the fixed assets has been carried out by management during the year and no material discrepancies were noticed on such verification.

(c) We are informed that title deeds in respect of all the immovable properties either free hold or lease hold are held in the name of the Company except for immovable property viz. factory building situated at Sewrree, Mumbai. Company has entered into Memorandum of Understanding but registered title deed is not executed in favour of the Company.

ii) We have relied on the Inventory Audit carried out by:

M/S KPND & Co., Chartered Accountants, for verification and valuation of inventory at Tarapur plants and warehouses and at all retail stores of the Company as on 31st March, 2016 and M/S B. Choraria & Mates, Chartered Accountants, for verification and valuation of inventory at Bangalore plants and warehouses of the Company as on 31st March, 2016.

We have framed our opinion on various areas of Inventory as mentioned below based on Inventory Audit Report submitted by the above Chartered Accountants Firms:

(a) As explained to us, inventory has been physically verified by management at reasonable intervals during the year. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) The Company has granted unsecured loan to a Private Limited Company covered in the register maintained under section 2(76) of the Companies Act, 2013.

(a) The terms and conditions of the grant of such loans are not prejudicial to the company''s interest;

iv) We are informed that Company has not contravened the provisions of S. 185 and S. 186 of The Companies Act, 2013 in respect of loans, investments and guarantees granted.

vi) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

vii) (a) According to the information and explanations

given to us and as per the records of the Company examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues with the appropriate authorities except for Income Tax. According to the information and explanations given to us, there were no undisputed amounts payable in respect of provident fund, employees state insurance, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues outstanding as at 31st March, 2016 for a period of more than six months from the date they became payable except for income tax mentioned below:

Name of the Statute	Nature of the dues	Amount (Rs.in Cr)	Period to which the amount relates	Due Date
Income Tax Act, 1961	Corporate Tax	23.94	A.Y. 2015-16	Various Dates up to 31st March 2015
Income Tax Act, 1961	Corporate Advance Tax	29.47	A.Y. 2016-17	Various Dates up to 31st march 2016

(b) According to the information and explanations given to us and according to the records of the Company, there are no dues of income-tax or sales-tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited with the appropriate authorities on account of any dispute except as given below:

Name of the Statute	Nature of the disputed dues	Amount (Rs.in crores)	Period to which the amount relates	Forum where dispute is pending
Central Excise Act, 1944	Excise Duty	2.91	May''01 to May''03	Mumbai High Court & Settlement Commission

viii) According to the records of the Company examined by us and the information and explanations given to us, the Company has defaulted in repayment of dues to the banks at the balance sheet date.

Name of the Bank	Amount of Default (Rs.In Crores)	Due Date	Nature of facility
Allahabad bank	7.5	31.03.2016	Term loan
Allahabad bank	0.21	22.03.2016	Term loan
Allahabad bank	1.29	31.03.2016	Term loan
Allahabad bank	2.97	31.03.2016	Term loan
Bank of Baroda	3.00	31.03.2016	Term loan
State bank of India	0.47	31.03.2016	Term loan
Axis Bank*	2.50	31.03.2016	Term loan

*This Term loan is transferred to Mandhana Retail Venture Limited due to scheme of demerger.

ix) The term loans outstanding at the beginning of the year have been applied for the purposes for which they were raised and those raised during the year were not strictly identifiable in terms of their end use.

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

xi) Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with schedule V to the Companies Act.

xiii) Company has carried out all transactions with the related parties in compliance with Section 188 and 177 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial Statements etc as required by the accounting standards and Companies Act, 2013.

Clauses 3(iii)(b), 3(iii)(c), 3(v), 3(xii), 3(xiv) and 3(xv) of the Order are not applicable to the Company.

Annexure A referred to in paragraph 1(f) of Our Report of even date to the members of MANDHANA INDSUSTRIES LIMITED on the Financial Statements of the company for the year ended 31st March, 2016

Report on the Internal Financial Controls under Clause

(i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (''the Act'')

We have audited the internal financial controls over financial reporting of MANDHANA INDUSTRIES 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 (''the Guidance Note'') issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Act .

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting are established and maintained and whether 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 in 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

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Further, 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 owing to changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate or for other reasons.

Opinion

In our opinion, Based on representations provided to us by the Management, 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 31 March 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.

FOR VISHAL H. SHAH & ASSOCIATES

Chartered Accountants

FRN -116422W

VISHAL H. SHAH

Proprietor

Membership No.-101231

Place : Mumbai

Date : 24th May, 2016

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Mar 31, 2015

We have audited the accompanying financial statements of Mandhana Industries Limited ("the Company"), which comprise the balance sheet as at 31 March 2015, 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 board of directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under section 133 of the Act, read with rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 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.

Report on other legal and regulatory requirements

1 As required by the Companies (Auditors Report) Order, 2015 ('the Order'), issued by the central government of India in terms of sub–section (11) of section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

(b) In our opinion, proper books of 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 accounts.

(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) On the basis of the written representations received from the directors as on 31 March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2015 from being appointed as a director in terms of section 164(2) of the Act.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements;

ii. The Company has made provisions, as required under the applicable law or accounting standards, for material foreseeable losses on long term contracts including derivative contracts; and

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

Annexure to the Auditors'Report

(Referred to in paragraph 1 under 'Report on other legal and regulatory requirements'of our report of even date)

i) (a) The Company is maintaining proper records to show full particulars including quantitative details and situation of all fixed assets.

(b) We are informed that the Company has formulated a program of physical verification of all the fixed assets over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and nature of its assets. Accordingly, the physical verification of the fixed assets has been carried out by management during the year and no material discrepancies were noticed on such verification.

ii) We have relied on the Inventory Audit carried out by:

M/S Nilesh Dhamecha & Associates, Chartered Accountants, for verification and valuation of inventory at Tarapur plants and warehouses and at all retail stores of the Company as on 31st March, 2015 and M/S B. Choraria & Mates, Chartered Accountants, for verification and valuation of inventory at Bangalore plants and warehouses of the Company as on 31st March, 2015.

We have framed our opinion on various areas of Inventory as mentioned below based on Inventory Audit Report submitted by the above Chartered Accountants Firms:

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

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

(c) The company is maintaining proper records of inventory for fabric, weaving and shirting divisions and is in the process of further strengthening of inventory records for its garment division.

The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii) The Company has granted an interest free, repayable on demand loan to a Private Limited Company covered in the register maintained under section 189 of the Companies Act, 2013. The maximum amount outstanding at any time during the year was Rs.4.24 Lacs and the year-end balance of loans granted to the party was Rs.1.24 Lacs.

iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate witRs. the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

v) We have broadly reviewed the books of account and records maintained by the Company pursuant to the rules prescribed by the central government for the maintenance of cost records under section 148(1) of the Companies Act, 2013 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The contents of these accounts and records have not been examined by us.

vi) (a) According to the information and explanations given to us and as per the records of the Company examined by us, in our opinion, the Company is regular in depositing undisputed statutory dues including provident fund, employees state insurance, income- tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues with the appropriate authorities. According to the information and explanations given to us, there were no undisputed amounts payable in respect of provident fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues outstanding as at 31st March, 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us and according to the records of the Company, there are no dues of income-tax or sales-tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess have not been deposited with the appropriate authorities on account of any dispute except as given below:

Name of the Statute Nature of the Amount Period to which the Forum where dispute is disputed dues (Rs. in crore) amount relates pending

Central Excise Act, 1944 Excise Duty 2.91 May'01 to May'03 Mumbai Rs.igRs. Court & Settlement Commission

Income Tax Act, 1961 Income Tax 0.59 A.Y- 2007-08 Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Income Tax 0.16 A.Y- 2012-13 Commissioner of Income Tax (Appeals)

(c) The Company is not required to transfer any amounts to the investor education and protection fund in accordance with. the relevant provisions of the Companies Act, 2013 and rules made there under.

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

viii) According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holder as at the balance sheet date.

ix) The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

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

xi) Clauses 3(iii) (b), 3(v) and 3(x) of the Order are not applicable to the Company.



FOR VISHAL H. SHAH & ASSOCIATES

Chartered Accountants

FRN -116422W



Vishal H. Shah

PLACE: MUMBAI Proprietor

DATE: 29th May, 2015 Membership No.-101231

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Mar 31, 2014

We have audited the accompanying financial statements of Mandhana Industries Limited ("the Company"), 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 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 and 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 misstatements.

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

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

Opinion

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

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

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, the 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, the Statement of Profit and Loss, and the Cash Flow Statement comply with Accounting Standards referred ito in sub - section (3C) of section 211 of the Companies Act,1956,

e. On the basis of the 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 clause (g) of sub-section (1) of section 274 of the Companies Act 1956.

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

Referred to in Paragraph 3 of our report of even date on the financial statement of Mandhana Industries Limited for the Year ended on 31st March, 2014,

1. In respect of its fixed assets:

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

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, 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 physical verification.

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

2. In respect of its inventories:

We have relied on the Inventory Audit carried out by M/S Nilesh Dhamecha & Associates Chartered Accountants for verification and valuation of inventory of the Company as on 31st March 2014. We have framed our opinion on various areas of Inventory as mentioned below based on Inventory Audit Report submitted by the said Chartered Accountants Firm.

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 is maintaining proper records of inventory for fabric, weaving and shirting divisions and is in the process of further strengthening of inventory records for its garment division.

The discrepancies noticed on physical verification of stocks as compared to book records were not material in relation to the operations of the Company and have been properly dealt with in the books of accounts.

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

I other parties covered in the register maintained under ! Section 301 of the Companies Act, 1956:

a) The Company has granted an interest free, repayable on demand loan to a Private Limited Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding at any time during the year was Rs. 4.24 Lacs and the year-end balance of loans granted to the party was Rs. 4.24 Lacs.

b) The aforesaid loan is interest-free and other terms and conditions are not prima facie prejudicial to the interest of the company.

c) The loan has been given to associated concerns. The said loan is interest free and is repayable on demand.

d) In respect of the loans given by the company, these are repayable on demand and therefore the question of overdue amount does not arise.

e) The company has not taken any loan during the year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, the requirement of clause (iii) (f) and (iii) (g) of paragraph 4 of the order are not applicable.

4. 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 for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

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

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that need to be entered in the register maintained under Section 301 of The Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

Referred to in Paragraph 3 of our report of even date on the financial statement of Mandhana Industries Limited for the Year ended on 31st March, 2014,

6. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1 )(d) of The Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to 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, Customs Duty, Excise Duty, Cess, and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March, 2014 for a period of more than six months from the date of becoming payable.

b) The disputed statutory dues aggregating Rs. 664.28 lacs that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

sr.Name ot the statute Nature Amount Related Forum wnere dispute No. of the Rs Period pending Dues In Lacs)

1 Income Tax Act,1961 Income 54.79 A.Y Commissioner of Tax 2009-10 Income Tax (Appeal)

2 Income Tax Act,1961 Income 315.91 A.Y- Commissioner of Tax 2009-10 Income Tax (Appeal)

3 Central Excise Excise 290.58 May''01 Mumbai High Court & Act,1944 Duty to May''03 Settlement Commission

Refer Note No. 36 forming part of the Financial Statements.

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

11. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks and debenture holders.

12. In our opinion and according to the explanations 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 / nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name.

15. The Company has given guarantees for loans taken by Others from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prima facie prejudicial to the interest of the Company.

16. The Company has raised new term loans during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no

For Vishal H. Shah & Associates

Chartered Accountants FRN-116422W

Vishal H. Shah Proprietor Membership No.-101231

Place: Mumbai Date :20th May, 2014

---

Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial statement

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 principles generally accepted in India including Accounting Standards referred to in Section 211(3C) 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.

Auditor''s Responsibility

Our responsibility is to express and give opinion on these fnancial statement 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 fnancial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and 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 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 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'' the aforesaid 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 for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order'' 2003 ("the Order") issued by the Central Government of India in terms of Section 227(4A) of the Act'' we give in the Annexure a statement on the matters 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 purpose of our audit;

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

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

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

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

Referred to in Para 3 of our Report of Even Date on the Financial Statements of Mandhana Industries Limited for the year ended on 31st March'' 2013.

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

I. (a) The records showing full particulars including quantitative details and situation of fxed assets except for details of new addition which are under completion'' have been maintained.

(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 the nature of its assets. No material discrepancies were noticed on such verifcation.

(c) The Company has not disposed off substantial part of fxed Assets during the year and the going concern status of the Company is not affected.

II. (a) The inventory has been physically verifed during the year by the management. In our opinion'' the frequency of verifcation is reasonable.

(b) The procedures of physical verifcation 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 for fabric '' weaving and shirting divisions and is in the process of further strengthening of inventory records for its garment division.

The discrepancies noticed on physical verifcation of stocks as compared to book records were not material in relation to the operations of the Company and have been properly dealt with in the books of accounts.

III. (a) The Company has granted an interest free'' repayable on demand loan to a Private Limited Company covered in the register maintained under section 301 of the Companies Act'' 1956. The maximum amount outstanding at any time during the year was Rs. 3.74 lacs and the year-end balance of loans granted to the party was Rs. 3.74 lacs.

(b) The aforesaid loan is interest-free and other terms and conditions are not prima facie prejudicial to the interest of the Company.

(c) The loan has been given to associated concerns. The said loan is interest free and is repayable on demand.

(d) In respect of the loans given by the Company'' these are repayable on demand and therefore the question of overdue amount does not arise.

(e) The Company has not taken any loan during the year from companies'' frms or other parties covered in the register maintained under section 301 of the Companies Act'' 1956. Consequently'' the requirement of clause (iii) (f) and (iii) (g) of paragraph 4 of the order are not applicable.

I V. There are adequate internal control systems commensurate with the size of the Company and nature of its business for the purchases of inventory'' fxed assets and for the sale of goods and services. During the course of our audit'' we have not observed any continuing failure to correct major weaknesses in internal control system.

V. (a) The transactions that need to be entered into the register maintained under section 301 of the Companies Act'' 1956 have been so entered.

(b) The transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of The Companies Act'' 1956 and exceeding the value of rupees fve lakhs in respect of any party during the year

VI. The Company has not accepted deposits from the public in contravention of the provisions of sections 58A and 58AA of the Companies Act'' 1956 and the Companies (Acceptance of deposits) Rules'' 1975.

VII. The Company has an internal audit system commensurate with the size and nature of its business.

VIII. The central Government has prescribed maintenance of cost records under section 209(1) (d) of the Companies Act'' 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of 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 not'' however'' carried out a detailed examination of the same.

IX. (a) The Company is regular in depositing undisputed statutory dues including Provident Fund'' Investor Education and Protection Fund'' Employee''s State Insurance'' Income Tax'' Value Added Tax'' Wealth Tax'' Service Tax'' Custom Duty'' Excise Duty'' Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us'' no undisputed amounts payable in respect of the aforesaid dues were in arrears'' as at 31st March'' 2013 for a period of more than six months from the date they became payable.

X. There are no accumulated losses at the end of the fnancial year. The Company has also not suffered any cash losses during the period covered by the audit and also in the preceding period.

XI. The Company has not defaulted in repayment of dues to any fnancial institution or bank.

XII. During the year under review'' the Company has not granted any loans or advances on the basis of security by way of pledge of shares'' debentures and other securities.

XIII. The Company is not a chit fund or a nidhi / mutual beneft fund / society. Therefore'' the provisions of clause 4 (xiii) of the Companies (Auditor''s Report) Order'' 2003 are not applicable to the Company.

XIV. The Company has maintained proper records of the transactions and contracts in receipt of dealing or trading in shares'' securities'' debentures and other investments and timely entries have been made therein. All shares'' securities'' debentures and other investment have been held by the Company in its own name.

X V. The Company has not given any guarantee for loans taken by others from bank or fnancial institutions.

XVI. The term loans were applied for the purpose for which they were obtained.

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. During the year under review'' the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

XIX. According to the information & Explanation given to us during the period covered by our audit report'' the Company had issued 700 Debentures of Rs. 10 lacs each .The Company is in process to creating Security in respect of Debenture issued.

XX. During the year under review'' the Company has not raised any money by way of public issue.

XXI. No fraud on or by the Company has been noticed or reported during the year.

For Vishal H. Shah & Associates

Chartered Accountants Frn -116422W

Vishal H. Shah

Proprietor

Membership No.-101231

Place : Mumbai

Date : 7th May'' 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of MANDHANA INDUSTRIES LIMITED as at 31st March, 2012 and the Profit & Loss Account 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 opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's report) (Amendment) Order, 2004 ( together the "order") issued by the Central Government of India in terms of sub section (4A) of section 227 of The Companies Act, 1956 ('the Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 our examination of the books of accounts of the Company;

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

d) In our opinion, the Balance sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply in all material respects with the mandatory Accounting Standards referred in section 211(3C) of the Companies Act, 1956;

e) On the basis of written representations received from the directors, 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 under Section 274(1) (g) of the Companies Act, 1956.

f) In our opinion, and to the best of our information and according to the explanations given to us subject to Note no. 10 on account of retrospective change in the method of Depreciation from WDV to SLM

for Fabric Division profit for the year is overstated by Rs. 128.14 lacs, the accounts give the information required by the Companies Act, 1956 in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012 and

ii) In the case of the Profit & Loss Account, of the Profit for the year ended on that date.

iii) In the case of the Cash flow Statement, of the cash flow for the year ended on that date.

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

I. (a) The records showing full particulars including quantitative details and situation of fixed assets except for details of new addition which are under completion, have been maintained.

(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 the nature of its assets. No material discrepancies were noticed on such verification.

(c) The Company has not disposed off substantial part of fixed Assets during the year and the going concern status of the Company is not affected.

II. (a) The inventory has been physically verified during the year by the management. In our opinion, 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 nature of its business.

(c) The Company is maintaining proper records of inventory for fabric , weaving and shirting divisions and is in the process of further strengthening of inventory records for its garment division.

The discrepancies noticed on physical verification of stocks as compared to book records were not material in relation to the operations of the Company and have been properly dealt with in the books of accounts.

III. (a) The Company has granted an interest free, repayable on demand loan to a Private Limited Company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding at any time during the year was Rs. 8.39 lacs and the year-end balance of loans granted to the party was Rs. 3.74 lacs.

(b) The aforesaid loan is interest-free and other terms and conditions are not prima facie prejudicial to the interest of the Company.

(c) The loan has been given to associated concerns. The said loan is interest free and is repayable on demand.

(d) In respect of the loans given by the Company, these are repayable on demand and therefore the question of overdue amount does not arise.

(e) The Company has not taken any loan during the year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, the requirement of clause (iii) (f) and (iii) (g) of paragraph 4 of the order are not applicable.

IV. There are adequate internal control systems commensurate with the size of the Company and nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

V. (a) The transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) The transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of The Companies Act, 1956 and exceeding the value of rupees five lacs in respect of any party during the year have been made at reasonable prices having regards to prevailing market price at the relevant time.

VI. The Company has not accepted deposits from the public in contravention of the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of deposits) Rules, 1975.

VII. The Company has an internal audit system commensurate with the size and nature of its business.

VIII. The central Government has prescribed maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of 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 not, however, carried out a detailed examination of the same.

IX. (a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor

Education and Protection Fund, Employee's State Insurance, Income Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were in arrears, as at 31st March, 2012 for a period of more than six months from the date they became payable.

(b) The aggregated disputed statutory dues under Income Tax Act is amounting to Rs. 435.04 lacs.

The disputed statutory dues under the Central Excise Act are Rs. 528.13 lacs out of which a sum of Rs. 42.93 lacs has been paid by the Company. Various matters pending before appropriate authorities are as under

(Rs. in lacs)

Sr. Name of Amount the statute Nature of the (Rs.in Related Dues Lacs Period Forum where No dispute is pending

1 Income Tax Act, 1961 Income Tax 13.64 A.Y- 1999-00 Mumbai High Court

2 Income Tax Act, 1961 Income Tax 10.40 A.Y- 2001-02 Mumbai High Court

3 Income Tax Act, 1961 Income Tax 5.12 A.Y- 2003-04 Commissioner of Income Tax (Appeal)

4 Income Tax Act, 1961 Income Tax 35.18 A.Y- 2004-05 Income Tax Appellate Tribunal

5 Income Tax Act, 1961 Income Tax 54.79 A.Y- 2008-09 Commissioner of Income Tax (Appeal)

6 Income Tax Act, 1961 Income Tax 315.91 A.Y- 2009-10 Commissioner of Income Tax (Appeal)

7 Central Excise Act, 1944 Excise Duty 290.58 May'01 to May'03 Mumbai High Court & Sett lement Commission

8 Central Excise Act, 1944 Excise Duty 194.62 Dec-06 to Mar-07 Commissioner of Central Excise Bangalore III Commis sionerate

X. There are no accumulated losses at the end of the financial year. The Company has also not suffered any cash losses during the period covered by the audit and also in the preceding period.

XI. The Company has not defaulted in repayment of dues to any financial institution or bank.

XII. During the year under review, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

XIII. The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

XIV. The Company has maintained proper records of the transactions and contracts in receipt of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investment have been held by the Company in its own name.

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

XVI. The term loans were applied for the purpose for which they were obtained.

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. During the year under review, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

XIX. During the year under review, the Company has not issued any debentures.

XX. We have verified the end use of money raised by public issue as disclosed in Note 38 of the financial statement.

XXI. No fraud on or by the Company has been noticed or reported during the year.

FOR viSHAL H. SHAH & ASSOCIATES

CHARTERED ACCOUNTANTS FRN -116422W

viSHAL H. SHAH

PROPRIETOR Membership No.-101231

PLACE : MUMBAI

DATE : 28th May, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of MANDHANA INDUSTRIES LIMITED as at 31st March, 2011 and the Profit and Loss Account 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 opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standard 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 overa financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's report) (Amendment) Order, 2004 (together the "order") issued by the Central Government of India in ter of subsection (4A) of section 227 of The Companies Act, 1956 ('the Act') and on the basis of such checks o the books and records of the Company as we considered appropriate and according to the information anc explanation given to us, we enclose in the annexure a statement on the matters specified in paragraphs 4 a 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 appears from our examination of the books of accounts of the Company;

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

d) In our opinion, the Balance sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply in all material respects with the mandatory Accounting Standards referred in section 211(3C) of the Companies Act, 1956;

e) On the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2011 from being appointed as a director under Section 274(1) (g) of the Companies Act, 1956.

In our opinion, and to the best of our information and according to the explanations given to us, the accounts give the information required by the Companies Act, 1956 in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India: i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011 and ii) In the case of the Profit and Loss Account, of the Profit for the year ended on that date. iii) In the case of the Cash flow Statement, of the cash flow for the year ended on that date.

ANNEXURE REFERRED TO IN PARA 3 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF MANDH AN A INDUSTRIES UMITED FOR THE YEAR ENDED ON 31ST MARCH. 2011.

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

I. (a) The records showing full particulars including quantitative details and situation of fixed assets except for details of new addition which are under completion, have been maintained.

(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 the nature of its assets. No material discrepancies were noticed on such verification.

(c) The Company has not disposed off substantial part of fixed Assets during the year and the going concern status of the Company is not affected.

II. (a) The inventory has been physically verified during the year by the management. In our opinion, 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 nature of its business.

(c) The Company is maintaining proper records of inventory for fabric, weaving and shirting divisions and is in the process of further strengthening of inventory records for its garment division.

The discrepancies noticed on physical verification of stocks as compared to book records were not material in relation to the operations of the Company and have been properly dealt with in the books of accounts.

III. (a) The Company has granted an interest free, repayable on demand loan to a Private Limited Company

covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding at anytime during the year wasRs. 8.08 Lacs and the year-end balance of loans granted to the party was Rs. 8.08 Lacs.

(b) The aforesaid loan is interest-free and other terms and conditions are not prima facie prejudicial to the interest of the Company.

(c) The loan has been given to associated concerns. The said loan is interest free and is repayable on demand.

(d) In respect of the loans given by the Company, these are repayable on demand and therefore the question of overdue amount does not arise.

(e) The Company has not taken any loan during the year from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Consequently, the requirement of clause (iii) (f) and (iii) (g) of paragraph 4 of the order are not applicable.

IV. There are adequate internal control systems commensurate with the size of the Company and nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control

system.

V. (a) The transactions that need to be entered into the register maintained under section 301 of the

Companies Act, 1956 have been so entered. (b) The transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of The Companies Act, 1956 and exceeding the value of rupees five Lacs in respect of any party during the year have been made at reasonable prices having regards to prevailing market price at the relevant time.

VI. The Company has not accepted deposits from the public in contravention of the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of deposits) Rules, 1975.

VII. The Company has an internal audit system commensurate with the size and nature of its business.

VIII. The central Government has prescribed maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of certain manufacturing activities of the Company. We have broadly reviewed the accounts and records of 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 not, however, carried out a detailed examination of the same.

IX. (a) The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employee's State Insurance, Income Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were in arrears, as at 31st March, 2011 for a period of more than six months from the date they became payable.

(b) The aggregated disputed statutory dues under Income Tax Act is amounting to Rs. 119.13 Lacs. The disputed statutory dues under the Central Excise Act areRs. 333.51 Lacs out of which a sum of Rs. 42.93 Lacs has been paid by the Company. Various matters pending before appropriate authorities are as under:

Sr. Name of the statute Nature of the Amount Related Period No. Dues (Rs. in Lacs)

1 Income Tax Act, 1961 Income Tax 13.64 A.Y-1999-00

2 Income Tax Act, 1961 Income Tax 10.40 A.Y-2001-02

3 Income Tax Act, 1961 Income Tax 5.12 A.Y-2003-04

4 Income Tax Act, 1961 Income Tax 35.18 A.Y-2004-05

5 Income Tax Act, 1961 Income Tax 54.79 A.Y-2008-09

6 Central Excise Act, 1944 Excise Duty 290.58 May'01 to May'03

Name of the Statue Forum where dispute is pending

Income Tax Act, 1961 Mumbai High Court Income Tax Act, 1961 Mumbai High Court Income Tax Act, 1961 Commissioner of Income Tax (Appeal) Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Commissioner of Income Tax (Appeal)

Mumbai High Court and Central Excise Act, 1944 Settlement Commission

X. There are no accumulated losses at the end of the financial year. The Company has also not suffered any cash losses during the period covered by the audit and also in the preceding period.

XI. The Company has not defaulted in repayment of dues to any financial institution or bank.

XII. During the year under review, the Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

XIII. The Company is not a chit fund or a nidhi/mutual benefit fund /society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

XIV. The Company has maintained proper records of the transactions and contracts in receipt of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investment have been held by the Company in its own name.

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

XVI. The term loans were applied for the purpose for which they were obtained.

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. During the year under review, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Act.

XIX. During the year under review, the Company has not issued any debentures.

XX. We have verified the end use of money raised by public issue as disclosed in Note 16 of schedule 21 pending utilization of the fund raised issue, a sum of Rs. 575.80 Lacs has been temporarily invested in mutual funds.

XXI. No fraud on or by the Company has been noticed or reported during the year.

FOR VISHAL H. SHAH & ASSOCIATES

CHARTERED ACCOUNTANTS FRN -116422W

VISHAL H. SHAH

PROPRIETOR

Membership No:101231

PLACE: MUMBAI

DATE : 24th May, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of MANDHANA INDUSTRIES LIMITED as at 31st March, 2010 and the Profit & Loss Account 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 Companys management. Our responsibility is to express opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003, 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 (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 our examination of the books of accounts of the Company;

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

d) In our opinion, the Balance sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply in all material respects with the mandatory Accounting Standards referred in section 211(3C) of the Companies Act, 1956;

e) On the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director under Section 274(1) (g) of the Companies Act, 1956.

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

i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010 and

ii) In the case of the Profit & Loss Account, of the Profit for the year ended on that date.

iii) In the case of the Cash flow Statement, of the cash flow for the year ended on that date.

ANNEXURE REFERRED TO IN PARA 3 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF MANDHANA INDUSTRIES LIMITED FOR THE YEAR ENDED ON 31 ST MARCH. 2010

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

I. (a) The records showing full particulars including quantitative details and situation of fixed assets except for details of new addition which are under completion, have been maintained.

(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 the nature of its assets. No material discrepancies were noticed on such verification.

(c) The Company has not disposed off substantial part of fixed Assets during the year and the going concern status of the Company is not affected.

II. (a) The inventory has been physically verified during the year by the management. In our opinion, 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 nature of its business.

(c) The company is maintaining proper records of inventory for fabric ,weaving and shirting divisions and is in the process of further strengthening of inventory records for its garment division. The discrepancies noticed on physical verification of stocks as compared to book records were not material in relation to the operations of the Company and have been properly dealt with in the books of accounts.

III. (a) The Company has granted an interest free, repayable on demand loan to one Partnership concern covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding at any time during the year was Rs. 1497.85 Lacs and the year-end balance of loans granted to the party was NIL. Other terms and conditions were not prima facie prejudicial to the interests of the company.

(b) The company has taken an interest free, repayable on demand loan from one partnership concern covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding at any time during the year was Rs.499.50 lacs and the year-end balance of loans taken from the party was NIL.

(c) The other terms and conditions of loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

IV. There are adequate internal control systems commensurate with the size of the company and nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

V. (a) The transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) The transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of The Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at reasonable prices having regards to prevailing market price at the relevant time.

VI. The company has not accepted deposits from the public in contravention of the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of deposits) Rules, 1975.

VII. The company has established an internal audit system in it garment units at Bangalore and same is being extended to all other locations where the company has operations

VIII. The company has not maintained the prescribed accounts and records pursuant to the rules made by Central government for the maintenance of cost records u/s 209 (1 )(d) of the Companies Act, 1956.

IX. (a) The company is regular in depositing undisputed statutory dues

including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were in arrears, as at 31 st March, 2010 for a period of more than six months from the date they became payable.

(b) The aggregated disputed statutory dues under Income Tax Act is amounting to Rs. 103.28 lacs. The disputed statutory dues under the Central Excise Act are Rs. 333.51 Lacs out of which a sum of Rs. 42.93 Lacs has been paid by the Company. Various matters pending before appropriate authorities are as under:

Sr. Name of the statute Nature of Amount Related No. the Dues (Rs. In Lacs) Period

1 Income Tax Act, 1961 Income Tax 13.64 A.Y-1999-00

2 Income Tax Act, 1961 Income Tax 35.18 A.Y-2004-05

3 Income Tax Act, 1961 Income Tax 10.50 A.Y-2005-06

4 Income Tax Act, 1961 Income Tax 13.61 A.Y-2006-07

5 Income Tax Act, 1961 Income Tax 30.35 A.Y-2007-08

6 Central Excise Act, 1944 Excise Duty 290.58 May01 to May03

Name of the statute Forum where dispute is pending

Income Tax Act, 1961 Bombay High Court

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income Tax Appellate Tribunal

Income Tax Act, 1961 Income Tax Appellate Tribunal

Central Excise Act, 1944 Mumbai High Court & Settlement Commission

X. There are no accumulated losses at the end of the financial year. The company has also not suffered any cash losses during the period covered by the audit and also in the preceding period.

XI. The company has not defaulted in repayment of dues to any financial institution or bank.

XII. During the year under review, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

XIII. The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, 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. Accordingly, 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 institutions.

XVI. The term loans were applied for the purpose for which they were obtained.

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

XIX. During the year under review, the company has not issued any debentures.

XX. During the year under review, the company has not raised any money by way of public issue.

XXI. No fraud on or by the company has been noticed or reported during the year.

For VISHAL H. SHAH & ASSOCIATES CHARTERED ACCOUNTANTS

VISHAL H. SHAH

Place: MUMBAI PROPRIETOR Date: 15th June, 2010 Membership No.-101231

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Mar 31, 2009

1. We have audited the attached Balance Sheet of MANDHANA INDUSTRIES LIMITED as at 31st March, 2009 and the Profit & Loss Account 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 Companys management. Our responsibility • is to express opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003, 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 (the Act) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanation given to us, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 our examination of the books of accounts of the Company;

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

d)In our opinion, the Balance sheet, Profit & Loss Account and Cash Flow Statement dealt with by this report comply in all material respects with the mandatory Accounting Standards referred in section 211(3C) of the Companies Act, 1956;

e), On the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2009 from being appointed as a director under Section 274(1) (g) of the Companies Act, 1956.

In our opinion, and to the best of our information and according to the explanations given to us, the accounts give the information required by the Companies Act, 1956 in the manner so required and present a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the state of affairs of the Company as. at 31st March, 2009 and

ii) In the case of the Profit & Loss Account, of the Profit for the year ended on that date.

iii) In the case of the Cash flow Statement, of the cash flow for the year ended on that date.

ANNEXURE REFERRED TO IN PARA 3 OF OUR REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTS OF MANDHANA INDUSTRIES LIMITED FOR THE YEAR ENDED ON 31ST MARCH, 2009.

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

I. {a} The records showing full particulars including quantitative details and situation of fixed assets except for details of assets of small values which are under completion, have been maintained.

(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 the nature of its assets. No material discrepancies were noticed on such verification.

(c) The Company has not disposed off substantial part of fixed Assets during the year and the going concern status of the Company is not affected.

II. (a) The inventory has been physically verified during the year by the management. In our opinion, 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 nature of its business.

(c) The company is maintaining proper records of inventory for fabric ,weaving and shirting divisions and is in the process of further strengthening of inventory records for its garment division. The discrepancies noticed on physical verification of stocks as compared to book records were not material in relation to the operations of the Company and have been properly dealt with in the books of accounts.

III. (a) The Company has granted an interest free, repayable on demand loan to one Partnership concern covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding at any time during the year was Rs. 467.45 Lacs and the year-end balance of loans granted to the party was NIL.Other terms and conditions were not prima facie prejudicial to the interests of the company.

(b) The company has taken an interest free, repayable on demand loan loan from one partnership concern covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding at any time during the year was Rs.364.80 lacs and the year- end balance of loans taken from the party was NIL.

(c) The other terms and conditions of loans taken by the company, secured or unsecured, are not prima facie prejudicial to the interest of the company.

IV. There are adequate internal control systems commensurate with the size of the company and nature of its business for the purchases of inventory, fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

V. GO The transactions that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(bl The transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of The Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at reasonable prices having regards to prevailing market price at the relevant time.

VI. The company has not accepted deposits from the public in contravention of the provisions of sections 58A and 58AA of the Companies Act, 1956 and the Companies (Acceptance of deposits) Rules, 1975.

VII. The company has established an internal audit system in it garment units at Bangalore and same is being extended to all other locations where the company has operations

VIII. The company has not maintained the prescribed accounts and records pursuant to the rules made by Central government for the maintenance of cost records u/s 209 (l)(d) of the Companies Act, 1956.

IX. (a) The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Value Added Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were in arrears, as at 31 st March, 2009 for a period of more than six months from the date they became payable.

(b) The aggregated disputed statutory dues under Income Tax Act is amounting to Rs 74.71 lacs

The disputed statutory dues under the Central Excise Act are Rs. 333.51 Lacs out of which a sum of Rs. 20.75 Lacs has been paid by the Company. Various matters pending before appropriate authorities are as under:

(Rs. in Lacs)

Sr. Name of the statute Nature of the Amount No. Dues (Rs. In Lacs)

1 Income Tax Act, Income Tax 13.64 1961

2 Income Tax Act, Income Tax 1.78 1961

3 Income Tax Act, Income Tax 35.18 1961

4 Income Tax Act, Income Tax 10.50 1961

5 Income Tax Act, Income Tax 13.61 1961

6 Central Excise Act, Excise Duty 312.76 1944













Central Excise Act, 1944

Name of the Statue Related Forum where Period dispute is pending

Income Tax Act, 1961 A.Y- Bombay High 1999-00 Court

Income Tax Act, 1961 A.Y- Income Tax 2003-04 Appellate

Tribunal Income Tax Act, 1961 A.Y- Income Tax 2004-05 Appellate Tribunal Income Tax Act, 1961 A.Y- Income Tax 2005-06 Appellate Tribunal Income Tax Act, 1961 A.Y- Income Tax 2006-07 Appellate Tribunal Central Excise Act, 1944 May 01 Mumbai High to Court & May 03 Settlement Commission

X. There are no accumulated losses at the end of the financial year. The company has also not suffered any cash losses during the period covered by the audit and also in the preceding period.

XI. The company has not defaulted in repayment of dues to any financial institution or bank.

XII. During the year under review, the company has not granted any loans or advances on the. basis of security by way of pledge of shares, debentures and other securities.

XIII. The company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, 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. Accordingly, 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 institutions.

XVI. The term loans were applied for the purpose for which they were obtained.

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

XIX. During the year under review, the company has not issued any debentures.

XX. During the year under review, the company has not raised any money by way of public issue.

XXI. No fraud on or by the company has been noticed or reported during the year.

FOR VISHAL H. SHAH & ASSOCIATES CHARTERED ACCOUNTANTS

VISUAL H. SHAH PROPRIETOR Membership No.-101231

PLACE : MUMBAI DATE : 24th July, 2009