Auditor Report of Modi Rubber Ltd.

Mar 31, 2021

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying financial statements of Modi Rubber Limited, (“the Company”) which comprise the Balance Sheet as at March 31, 2021, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity for the year ended, and a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“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 2021, and profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial statements.

Emphasis of Matter

Without qualifying our opinion, we draw attention Note 44 of the financial statements wherein it is stated that due to impact of Covid-19 on the business of the joint venture of the company, the joint ventures has incurred cash losses during the year and has significant accumulated losses as at 31^st March 2021. Given effect to same and in view of the prudence concept, the company has provided provision for impairment in the value of investment amounting to Rs 748.54 lacs to the extent of its share in net accumulated losses of joint venture at 31st March 2021.

Key Audit Matters

Key audit matters (‘KAM’) are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters | How our audit addressed the key audit matter
Evaluation of contingencies & uncertain tax positions
Prior to closure of operations by illegal strikes of the workers in August 2001, and thereafter sanction of Rehabilitation Scheme under the provisions of SICA by BIFR on 21.04.2008 (refer note 41 & 42 of financial statements), the Company operated in multiple jurisdictions and subjected to periodic challenges by local tax authorities, income tax authorities, labour law authorities & other statutory authorities on a range of various tax & other matters during the normal course of business. These involve significant management judgment to determine the possible outcome of the uncertain tax positions & other contingencies consequently having an impact on related accounting and disclosures in the standalone financial statements. Refer Note 2(m) ,Note 24(a) & Note 40 to the standalone financial statements.	Our audit procedures include the following substantive procedures: • Obtained understanding of key contingencies & uncertain tax positions and ; • We along with our internal legal experts - > Read and analysed select key correspondences, external legal opinions / consultations by management for key contingencies & uncertain tax positions; > Discussed with appropriate senior management and evaluated management’s underlying key assumptions in estimating the tax provisions; and > Assessed managements estimate of the possible outcome of the disputed cases.

Other Information

The Company’s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company’s annual report, but does not include the standalone financial statements and our auditors’ report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information; we are required to report that fact. We have nothing to report in this regard.

Management’s Responsibility for the Standalone Financial Statements

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

In preparing the financial statements, management and Board of Directors are responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, if applicable we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure “A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

c. the Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with rules 7 of the Companies (Accounts) Rules, 2014;

e. The matter described in Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company

f. on the basis of written representations received from the directors as on 31 March 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2021, from being appointed as a director in terms of Section 164(2) of the Act.

g. 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 B”; and;

h. In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

i. 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 litigation on its financial position in its financial statements- Refer Note 40 to the financial statements;;

ii. the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

iii. there is no amount required to be transferred, to the Investor Education and Protection Fund by the Company.

FOR SURESH SURANA & ASSOCIATES LLP

Chartered Accountants

Firm’s Registration No. 121750 W / W-100010

Ravinder Pal Singh

PARTNER

Membership No.

UDIN:

Place: New Delhi

Dated: 30^th June 2021

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Mar 31, 2018

Report on the Standalone Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Modi Rubber Limited, (“the Company”) which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and Statement of Changes in Equity for the year ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive Income, cash flows and Statement of changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act, read with relevant rules issued thereunder. 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of the material misstatement of the standalone Ind AS financial statements, whether due to error or fraud. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Ind AS 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 accounting policies used and the reasonableness of the accounting estimates made by the Company’s Board of Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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, 2018, and its loss, total comprehensive income, its cash flows and changes in equity for the year ended on that date.

Other Matters

The financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were not audited by us. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (‘the Order’), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

c. the Balance Sheet, the Statement of Profit and Loss (including other comprehensive income), the Cash Flow Statement and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

d. in our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with relevant rules issued thereunder;

e. on the basis of written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018, 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 B”; and;

g. with respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, 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 litigation on its financial position in its financial statements- Refer Note 42 to the financial statements;

ii. the Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

iii. there is no amount required to be transferred, to the Investor Education and Protection Fund by the Company.

ANNEXURE A TO INDEPENDENT AUDITORS’ REPORT (Referred to in paragraph 1 under the heading of “Report on other legal and regulatory requirements” of our report of even date)

1. (a) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The Company has regular programme of physical verification of its fixed assets by which all fixed assets (except the assets which the Company has no access) of respective locations are verified in a phased manner over a period of three years. Accordingly, physical verification of fixed Assets was carried out in financial year 2017-18. In our opinion, this periodicity of physical verification 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) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company except the following cases (Refer Note 2).

S.No.	Nature of Property	Gross Block (Rs. Lacs)	Net Block (Rs. Lacs)
1	Building on lease hold land	27.49	24.97
2	Building on free hold land	18.96	17.16

2. As explained to us, the physical verification of inventory has not been conducted during the year due to no access to such inventory.

3. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability partnerships or other parties covered in the register maintained under Section 189 of the Act. Accordingly, paragraph 3(iii) (a), 3(iii) (b) and 3(iii) (c) of the Order are not applicable.

4. The Company has not granted any loans, investments, guarantees and securities during the year. Accordingly, paragraph 3(iv) of the order is not applicable.

5. In our opinion, and according to the information and explanations given to us, the Company has not accepted any deposits during the year within the meaning of Sections 73 to 76 of the Act and the rules framed there under, to the extent notified.

6. In our opinion, and accounting to the information and explanations given to us, the requirement for maintenance of cost records pursuant to the companies (cost records and audit) Rules, 2014 specified by the Central Government of India under Section 148 of the Act are not applicable to the Company for the year under audit.

7. (a) According to the information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employee’s state insurance, income tax, sales tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues, with the appropriate authorities during the year. According to the information and explanations given to us, there are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 31 March 2018 for a period of more than six months from the date they became payable except sales tax dues of various state authorities amounting to Rs.1,878.35 lacs. (Refer Note 25(a))

(b) According to the information and explanations given to us, there are no dues in respect of income tax, sales tax, service tax, goods and service tax, duty of customs, duty of excise and value added tax which have not been deposited on account of any dispute other than the following:

Name of the Statute	State	Amount Rs. Lacs	Forum Where Dispute is pending	Period Which It Relates to
Central Excise Act, 1944	Excise Duty	30.85	2000-01 & 2001-2002	Assistant Commissioner, Meerut
Central Excise Act, 1944	Excise Duty	77.38	1977-78	Allahabad High Court
Central Excise Act, 1944	Excise Duty	23.65	April, 1981	Allahabad High Court

Foreign Trade Development and Regulation Act, 1992	Custom Duty	200.00	1995-1996	Additional DGFT Commissioner (A)
Custom Act, 1962	Custom Duty	383.53	1996 to 2001	CESTAT
Income Tax Act, 1961	Income Tax	1376.07	2003-2004	Income Tax Appellate Tribunal
PGST ACT, 1948	Sales Tax	17.53	1992 to 2002	Deputy Excise & Taxation Commissioner, Jalandhar
Bihar Sales Tax Act	Sales Tax	101.23	2001-2001	Commercial Taxes Tribunal, Patna
UP Trade Tax Act	Sales Tax	36.50	1977-1989	Allahabad High Court
UP Trade Tax Act	Sales Tax	118.02	2000-2001	Tribunal, Ghaziabad
UP Trade Tax Act	Sales Tax	116.11	2001-2002	Tribunal, Ghaziabad

8. In our opinion and according to the information and explanation given to us, the Company has not defaulted in repayments of loans and borrowings from any financial institution, banks, government or debenture holders during the year.

9. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). The term loan raised by the company was applied for the purpose for which it was raised.

10. 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 instance of material fraud by the Company or any fraud on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

11. The Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V of the Act.

12. In our opinion and according to the information and explanation given to us, the Company is not a nidhi company. Accordingly paragraph 3(xii) of the Order is not applicable.

13. Based on our audit procedures and as per the information and explanations given by the management, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

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

15. Based on our audit procedures and as per the information and explanations given by the management, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly, paragraph 3(xv) of the Order is not applicable.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

ANNEXURE B TO INDEPENDENT AUDITORS’ REPORT

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Modi Rubber Limited, (“the Company”) as on 31 March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

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

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised 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. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

For SURESH SURANA & ASSOCIATES LLP

Chartered Accountants

Firm’s Registration No. 121750 W / W-100010

(Rahul Singhal)

Place : New Delhi PARTNER

Dated : 29th May, 2018 Membership No. 096570

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Mar 31, 2016

NDEPENDENT AUDITORS’ REPORT

To the members of

Modi Rubber Limited

Report on the Financial Statements

We have audited the accompanying standalone financial statements of Modi Rubber Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Principles generally accepted in India, including 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 and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of subsection (11) of section 143 of 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 give in the Annexure ‘A’ a statement of the matters specified in paragraphs 3 and 4 of the Order.

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 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 it appears from our examination of those books;

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

d. in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. on the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 ‘B’; and;

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

- the Company has disclosed the impact of pending litigations as at March 31, 2016 on its financial position in its financial statements;

- the Company has made provision, as required under applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and;

- there has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2016

ANNEXURE ‘A’ REFERRED IN OUR REPORT ON STANDALONE FINANCIAL STATEMENTS TO THE MEMBERS OF MODI RUBBER LIMITED FOR THE YEAR ENDED 31^st MARCH 2016

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

b) The fixed assets (except the assets which the company has no access) have been physically verified by the management during the year. Material discrepancy noticed during such verification, have been properly dealt with in the books of accounts.

c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of all the immovable properties are held in the name of the Company except the following cases:-

S.No.	Nature of	Gross Block	Net Block
	Property	(Rs. Lacs)	(Rs. Lacs)
1	Building (Flat)	165.00	27.49
2	Building	98.73	18.96

(ii) Physical verification of the inventories of the company has been conducted at reasonable intervals. However in some cases, physical verification has not been conducted due to non-access of the inventory. As explained to us, material discrepancies noticed on physical verification of inventories as compared to book records have been properly dealt with in the books of accounts.

(iii) The Company has granted an unsecured loan to one of its wholly owned subsidiary company, covered in the register maintained under section 189 of the Act.

a) The terms and conditions of the aforesaid loan are not prejudicial to interest of the Company;

b) The loan granted was repaid as per schedule; and;

c) There is no overdue amount in respect of such loan.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act in respect of loans, investments, guarantees and securities.

(v) According to the information and explanation given to us, the company has not accepted any deposits within the meaning of sections 73 and 76 of the Act and the rules framed thereunder to the extent notified. Accordingly, paragraph 3(v) of the Order is not applicable.

(vi) The Central Government has prescribed maintenance of Cost Records under clause (d) of sub-section (1) of Section 148 of the Act. However no Cost Records are maintained due to the suspension of manufacturing operations.

(vii) a) According to the information and explanation given to us,

the company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees’ State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities except amount of Rs. 126.26 lacs due to various Sales Tax Authorities as at the last day of the financial year concerned for a period of more than six months from the date they become payable.

b) According to information and explanations given to us, the dues of Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise or Value Added Tax which have not been deposited on account of any dispute and the forum where the dispute is pending, are as under :-

S. No.	Name of the Statute	State	Amount Rs. Lacs	Forum Where Dispute is pending	Period Which It Relates to
I. EXCISE/DGFT LIABLITY
1	Central Excise Act, 1944	Central Excise Act, 1944	1,604.72	High Court and Appelate Tribunals	1992-2002
2	Foreign Trade Development and Regulation Act, 1992	Delhi	200.00	Additional DGFT Commissioner (A)	1995-1996
3	Custom Act, 1962		551.42	Commissioner (A)	1996, 2000, 2001
II. SALES TAX LIABILITY
1	U.P Trade/VAT Act	Uttar Pradesh	323.82	Tribunal, Add. Comm.(A), D.C. (A)	1977-2002
2	Bihar Finance Act	Bihar	374.85	Jt. Comm. (A)	1990-2002
3	Delhi ST Act	Delhi	337.08	D.C. (A)	1976-2002
4	Maharashtra ST Act	Mumbai	790.52	D.C. (A)	1975-2002
5	Jharkand ST Act	Jamshedpur	65.42	D.C. (A)	2000-2002
6	Jharkand ST Act	Ranchi	27.96	D.C. (A)	2000-2002
7	A.P GST Act	Andhra Pradesh	95.58	Comm. (A)	1999-2002
8	Haryana CST Act	Haryana	63.05	Jt. Comm. (A)	1999-2003
9	J & K ST Act	Jammu & Kashmir	42.33	D.C. (A)	2001-2002
10	M.P Comm. Tax Act	Madhya Pradesh	134.40	D.C. (A)	1993-2002
11	Uttaranchal ST Act	Uttranchal	20.29	Jt. Comm. (A)	2000-2002
12	Pondicherry ST Act	Puducherry	0.73	D.C. (A)	1999-2000

(viii) The Company does not have any loans or borrowings from any financial institutions, banks, government or debenture holders during the year. Accordingly, paragraph 3(viii) of the Order is not applicable.

(ix) The Company did not raise any money by way of initial offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3(ix) of the Order is not applicable.

(x) According to the information and explanation given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and on the basis of our examination of the records, the Company has paid managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

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

(xiii) According to the information and explanations given to us and on the basis of our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and the details of such transactions have been disclosed in the financial statements as required by applicable accounting standards.

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

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

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

ANNEXURE ‘B’ REFERRED IN OUR REPORT ON STANDALONE FINANCIAL STATEMENTS TO THE MEMBERS OF MODI RUBBER LIMITED FOR THE YEAR ENDED 31st MARCH 2016

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Modi Rubber Limited (“the Company”) as at March 31, 2016 in conjunction with our audit of the standalone 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 controls stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting 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 for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that

a) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

b) 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;

c) 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. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

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

For P D M and Company

(Firm Registration No. 007966N)

Chartered Accountants

Place : New Delhi CA. Prabhat Jain

Date : 27.05.2016 Partner

(M. No. 086756)

---

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Principles generally accepted in India, including 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 and other applicable authoritative pronouncements issued by the institute of Chartered Accountants of India.. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate Internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2015 and its profit and the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub- section (11) of section 143 of 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 give in the Annexure a statement of the matters specified in paragraphs 3 and 4 of the Order.

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 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 it appears from our examination of those books;

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

d. in our opinion, the aforesaid financial statement comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e. on the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 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 the best of information and according to the explanations given to us:

- the Company has disclosed the impact of pending litigations as at March 31, 2015 on its financial statements;

- the Company has made provision, as required under applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts; and;

- there has been no delay in transferring amounts required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2015.

ANNEXURE REFERRED IN OUR REPORT ON STANDALONE FINANCIAL STATEMENTS TO THE MEMBERS OF MODI RUBBER LIMITED FOR THE YEAR ENDED 31st MARCH 2015

1. a) The Company has maintained proper records to show full

particulars including quantitative details and situation of its fixed assets. b) The fixed assets (except the assets which the company has no access) have been physically verified by the management during the year. Material discrepancy noticed during such verification, have been properly dealt with in the books of accounts.

2. a) Physical verification of the inventories of the company has been

conducted at reasonable intervals. However in some cases, physical verification has not been conducted due to non-access of the inventory.

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

c) The company has maintained proper records of inventories. As explained to us, material discrepancies noticed on physical verification of inventories as compared to book records have been properly dealt with in the books of accounts.

3. The Company has granted an unsecured loan to one of its wholly owned subsidiary company, covered in the register maintained under section 189 of the Act. The aforesaid loan is interest free and whole of the principal amount has been received back during the current year.

4. In our opinion and according to the information and explanations provided to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and services. We have not observed any continuing failure to correct major weaknesses in the aforesaid internal control system during the course of audit.

5. According to the information and explanation given to us, the company has not accepted any deposits within the meaning of sections 73 and 74 of the Act and the rules framed thereunder to the extent notifed. Therefore, the provision of Clause (v) of paragraph 3 of the Order is not applicable to the Company.

6. The Central Government has prescribed maintenance of Cost Records under clause (d) of sub-section (1) of Section 148 of the Act. However no Cost Records are maintained due to the suspension of manufacturing operations.

7. a. The company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues with the appropriate authorities except amounts of Rs. 139.66 lacs due to various Sales Tax Authorities and Rs. 247.75 lacs payable to Gratuity Trust as at the last day of the financial year concerned for a period of more than six months from the date they become payable. b. According to information and explanations given to us, the dues of Income Tax, Sales Tax, Wealth Tax, Customs Duty, Service Tax, Excise Duty Value Added Tax and Cess which have not been deposited on account of any dispute and the forum where the dispute is pending, are as under :-

Sl.Name of the Statute State Amount No. Rs. Lacs

I EXCISE/DGFT LIABLITY

1 Central Excise Act, 1944 Central Excise Act, 1944 1,604.72

2 Foreign Trade Development Delhi 200.00 and Regulation Act, 1992

3 Custom Act, 1962 379.89

II SALES TAX LIABILITY

1 U.P Trade/VAT Act Uttar Pradesh 323.82

2 Bihar Finance Act Bihar 374.85

3 Delhi ST Act Delhi 337.08

4 Maharashtra ST Act Mumbai 790.52

5 Jharkand ST Act Jamshedpur 65.42

6 Jharkand ST Act Ranchi 27.96

7 A.P GST Act Andhra Pradesh 95.58

8 Haryana CST Act Haryana 63.05

9 J & K ST Act Jammu & Kashmir 42.33

10 M.P Comm. Tax Act Madhya Pradesh 134.40

11 Uttaranchal ST Act Uttranchal (Haldwani) 20.29

12 Pondicherry ST Act Puducherry 0.73

Sl.Name of the Statute Forum Where Dispute is pending Period Which It Relates to

I EXCISE/DGFT LIABLITY

1. Central Excise Act 1944 High Court and Appellate Tribunals 1992-2002

2. Foreign Trade Development Additional DGFT and Regulation Act1992 Commissioner (A) 1995-1996

3. Custom Act 1962 Commissioner (A) 1996, 2000, 2001

II SALES TAX LIABLITU

1. U.P Trade/VAT Act Tribunal, Add. Comm. (A), D.C. (A) 1977-2002

2. Bihar Finance Act Jt. Comm. (A) 1990-2002

3. Delhi ST Act D.C. (A) 1976-2002

4. Maharashtra ST Act D.C. (A) 1975-2002

5. Jharkand ST Act D.C. (A) 2000-2002

6. Jharkand ST Act D.C. (A) 2000-2002

7. A.P.GST Act Comm. (A) 1999-2002

8. Haryana CST Act Jt. Comm. (A) 1999-2003

9. J & K ST Act D.C. (A) 2001-2002

10.M.P.Comm.Tax Act D.C. (A) 1993-2002

11.Uttaranchal ST Act Jt. Comm. (A) 2000-2002

12.Pandicherry ST Act D.C. (A) 1999-2000

c. The amount required to be transferred to Investor Education and Protection Fund has been transferred within the stipulated time in accordance with the provisions of the Companies Act, 1956 (1 of 1956) and the rules made thereunder.

8. There are no accumulated losses at the end of the financial year. The Company has not incurred any Cash Loss during the year and immediately preceding financial year.

9. In our opinion and according to information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions, banks or debenture holders.

10. On the basis of information and explanations given to us the company has not given any guarantee for loan taken by others from bank or financial institutions.

11. As per information and explanations given to us, we report that the company has taken a term loan during the year. This loan has been applied for the purpose for which it was obtained.

12. Based on the audit procedures performed and information and explanations given to us by the management, we report that no fraud on or by the company has been noticed or reported during the course of our audit.

For P D M AND COMPANY

Chartered Accountants

(Firm Registration No. 007966N)

Place : New Delhi CA. Prabhat Jain

Date : 29.05.2015 Partner

(M. No. 086756)

---

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, we report that subject to:-

i) Serial No. 5 of Note No. 24 regarding non availability of information of unpaid balances to Micro, Small and Medium Enterprises;

ii) Serial No. 9 of Note No. 24 regarding non ascertainment of value of intangible assets and value of impairment loss on Assets as per AS 26 & 28 respectively;

the total impact of which, is presently not ascertainable, the aforesaid financial statements give the information required by the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditors'' Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as "the Order"), 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 and 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 Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

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

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

The Annexure referred to in the main Auditors Report of even date:-

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

b) The fixed assets (except the assets which the company has no access) have been physically verified by the management during the year. Material discrepancy noticed during such verification, have been properly dealt with in the books of accounts.

c) In our opinion and according to the information and explanation given to us the Company has not disposed off a substantial part of its fixed assets during the year.

ii) a) Physical verification of the inventories of the company has been conducted at reasonable intervals. However in some cases, physical verification has not been conducted due to non-access of the inventory.

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

c) The company has maintained proper records of inventories. As explained to us, material discrepancies noticed on physical verification of inventories as compared to book records have been properly dealt with in the books of accounts.

iii) a) The Company has not granted any secured/unsecured loan to any party listed in the register maintained under section 301 of the Companies Act, 1956.

b) The Company has taken interest free unsecured loans from one company listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs. 220 lacs and the balance outstanding as at 31st March, 2014 is Rs. Nil.

c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans granted/taken are not prima facie prejudicial to the interest of the company.

d) No loan is outstanding at the year end, as the outstanding amount at the beginning of the year has duly been repaid during the year.

iv) In our opinion and according to the information and explanations provided to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for sale of goods and services. We have not observed any continuing failure to correct major weaknesses in the aforesaid internal control system during the course of audit.

v) a) As per information and explanations provided to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.

b) As per information and explanations provided to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any public deposits. Therefore provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the directions issued by Reserve Bank of India are not applicable and therefore not commented upon.

vii) As informed to us, the company has an internal audit system commensurate with its size and nature of its business. However, due to suspension of operations, there is no designated team for internal audit.

viii) The Central Government has prescribed maintenance of Cost Records under clause (d) of sub-section (1) of Section 209(1)(d) of the Act. However no Cost Records are maintained due to the suspension of manufacturing operations.

ix) (a) The company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities except amounts of Rs. 86.90 lacs due to various Sales Tax Authorities and Rs. 233.14 lacs payable to Gratuity Trust as at the last day of the financial year concerned for a period of more than six months from the date they become payable.

(b) According to information and explanations given to us, the dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute and the forum where the dispute is pending, are as under :-

S. Name of the Statute State Amount No. Rs. Lacs

I EXCISE/DGFT LIABLITY

1 Central Excise Act, 1944 Central Excise 1,653.97 Act, 1944

2 Foreign Trade Development Delhi 200.00 and Regulation Act, 1992

3 Custom Act, 1962 563.16

II SALES TAX LIABILITY

1 U.P Trade/VAT Act Uttar Pradesh 323.82

2 Bihar Finance Act Bihar 374.85

3 Delhi ST Act Delhi 337.08

4 Maharashtra ST Act Mumbai 790.52

5 W.B State Act Kolkatta 131.17

6 Jharkand ST Act Jamshedpur 65.42

7 Jharkand ST Act Ranchi 27.96

8 A.P GST Act Andhra Pradesh 95.58

9 Haryana CST Act Haryana 63.05

10 J & K ST Act Jammu & Kashmir 42.33

11 M.P Comm. Tax Act Madhya Pradesh 134.40

12 Uttaranchal ST Act Uttranchal 20.29 (Haldwani)

13 Pondicherry ST Act Pondicherry 0.73





S. Name of the Statute Forum Where Dispute Period Which It No. is pending Relates to

I EXCISE/DGFT LIABLITY

1 Central Excise Act, 1944 High Court and 1992-2002 Appellate Tribunals

2 Foreign Trade Development Additional DGFT 1995-1996 and Regulation Act, 1992 Commissioner (A)

3 Custom Act, 1962 Commissioner (A) 1996, 2000, 2001

II SALES TAX LIABILITY

1 U.P Trade/VAT Act Tribunal, Add. 1977-2002 Comm.(A), D.C. (A)

2 Bihar Finance Act Jt. Comm. (A) 1990-2002

3 Delhi ST Act D.C. (A) 1976-2002

4 Maharashtra ST Act D.C. (A) 1975-2002

5 W.B State Act D.C. (A) 1975-2002

6 Jharkand ST Act D.C. (A) 2000-2002

7 Jharkand ST Act D.C. (A) 2000-2002

8 A.P GST Act Comm. (A) 1999-2002

9 Haryana CST Act Jt. Comm. (A) 1999-2003

10 J & K ST Act D.C. (A) 2001-2002

11 M.P Comm. Tax Act D.C. (A) 1993-2002

12 Uttaranchal ST Act Jt. Comm. (A) 2000-2002 13 Pondicherry ST Act D.C. (A) 1999-2000



x) There are no accumulated losses at the end of the financial year. The Company has not incurred any Cash Loss during the year and immediately preceding financial year.

xi) In our opinion and according to informations and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions, banks or debenture holders.

xii) As informed to us the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not carrying on the business of Chit Fund, Nidhi or Mutual Benefits Fund / Societies.

xiv) The Company is not dealing or trading in Shares, Securities and other Investments.

xv) The Company has not given any guarantee for loan taken by others from banks or financial institutions.

xvi) The Company has not taken any term loan during the financial year.

xvii) The Company has not raised any loan during the year.

xviii) The Company has neither issued any fresh share capital nor made any preferential allotment during the year.

xix) The Company has not issued any debenture during the year.

xx) The Company has not raised any money by way of Public Issue during the year.

xxi) As informed by the company, no case of any fraud on or by the Company has been noticed or reported during the year.



For: P D M AND COMPANY Chartered Accountants (Firm Regn. No. 007966N)

Place : New Delhi CA. Prabhat Jain Date : 28.05.2014 Partner (M. No. 086756)

---

Mar 31, 2013

Report of the Auditors to the Shareholders

1. We have audited the attached Balance Sheet of Modi Rubber Limited as at 31st March 2013, the Statement of Proft and Loss and the Cash Flow Statement of the Company for the period ended on that date, annexed thereto. These fnancial statements are the responsibility of the Company''s Management. Our responsibility is to express an opinion on these fnancial 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 fnancial statements are free of any material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the fnancial statements. An audit also includes assessing the accounting principles used and signifcant estimates made by management, as well as evaluating the overall fnancial 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 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specifed in paragraphs 4 & 5 of the said order.

4. Further to our comments in the annexure referred to in paragraph 3 above, we report that :-i) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

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

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

iv) In our opinion, the Statement of Proft and Loss, Balance Sheet and Cash Flow Statement comply with the requirements of the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956; and;

v) On the basis of the written representations received from the directors on 31st March, 2013 and taken on record by the Board of Directors, we report that none of the Director as at 31st March, 2013 is disqualifed from being appointed as director of the company under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

5. In our opinion and to the best of our information and according to the explanations given to us, we further report that subject to:-i) Serial No. 5 of Note No. 25 regarding non availability of information of unpaid balances to Micro, Small and Medium Enterprises;

ii) Serial No. 10 of Note No. 25 regarding non ascertainment of value of intangible assets and value of impairment loss on Assets as per AS 26 & 28 respectively; the total impact of which, is presently not ascertainable, the said accounts read with other notes thereon, give the information required by the Companies Act ,1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-i) in the case of Balance Sheet, of the state of the Company''s affairs as at 31st March, 2013;

ii) in the case of Statement of Proft and Loss, of the Proft of the Company for the period ended on that date; and;

iii) in the case of Cash Flow Statement, of the Cash Flows for the period ended on that date.

ANNEXURE TO THE AUDITORS'' REPORT

The Annexure referred to in the main Auditors Report of even date:-i) a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fxed assets.

b) The fxed assets (except the assets which the company has no access) have been physically verifed by the management at the period end. No material discrepancy has been noticed on such verifcation.

c) In our opinion and according to the information and explanation given to us the Company has not disposed off a substantial part of its fxed assets during the period.

ii) a) Physical verifcation of the inventories of the company has been conducted at reasonable intervals. However in some cases, physical verifcation has not been conducted due to non-access of the inventory.

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

c) The company has maintained proper records of inventories. As explained to us, material discrepancies noticed on physical verifcation of inventories as compared to book records have been properly dealt with in the books of accounts.

iii) a) The Company has not granted any secured/unsecured loan to any party listed in the register maintained under section 301 of the Companies Act, 1956.

b) The Company has taken interest free unsecured loans from two companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs. 530 lacs and the balance outstanding as at 31st March, 2013 is Rs. 220 lacs.

c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans granted/taken are not prima facie prejudicial to the interest of the company.

d) Such loans outstanding at the period end are at call and have not been recalled during the period.

iv) In our opinion and according to the information and explanations provided to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fxed assets and for sale of goods and services. We have not observed any continuing failure to correct major weaknesses in the aforesaid internal control system during the course of audit.

v) a) As per information and explanations provided to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.

b) As per information and explanations provided to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any public deposits. Therefore provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the directions issued by Reserve Bank of India are not applicable and therefore not commented upon.

vii) As informed to us, the company has an internal audit system commensurate with its size and nature of its business. However, due to suspension of operations, there is no designated team for internal audit.

viii) The Central Government has prescribed maintenance of Cost Records under clause (d) of sub-section (1) of Section 209(1) (d) of the Act. However no Cost Records are maintained due to the suspension of manufacturing operations.

ix) (a) The company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities except amounts of Rs. 86.90 lacs due to Sales Tax Authorities and Rs. 232.16 lacs payable to gratuity trust as at the last day of the fnancial year concerned for a period of more than six months from the date they become payable.

(b) According to information and explanations given to us, the dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute and the forum where the dispute is pending, are as under :-

S. Name of the Statute State Amount No. Rs. Lacs

EXCISE/DGFT LIABLITY

1 Central Excise Act, 1944 Central Excise Act, 1944 1,653.97

2 Foreign Trade Development and Delhi 200.00

Regulation Act, 1992 II SALES TAX LIABILITY

1 U.P Trade/VAT Act Uttar Pradesh 1077.04

2 Bihar Finance Act Bihar 374.85

3 Delhi ST Act Delhi 337.08

4 Maharashtra ST Act Mumbai 790.52

5 W.B State Act Kolkatta 131.17

6 Jharkand ST Act Jamshedpur 65.42

7 Jharkand ST Act Ranchi 27.96

8 A.P GST Act Andhra Pradesh 95.58

9 Haryana CST Act Haryana 63.05

10 J & K ST Act Jammu & Kashmir 42.33

11 M.P Comm. Tax Act Madhya Pradesh 134.40

12 Uttaranchal ST Act Uttranchal (Haldwani) 20.29

13 Pondicherry ST Act Puducherry 0.73

Name Forum Where Dispute is pending Period Which It Relates to

Central Excise Act, 1944 High Court and Appelate Tribunals 1992-2002

Foreign Trade Development Additional DGFT Commissioner (A) 1995-1996

U.P Trade/VAT Act Tribunal, Add. Comm. (A), D.C. (A) 1977-2002

Bihar Finance Act Jt. Comm. (A) 1990-2002

Delhi ST Act D.C. (A) 1976-2002

Maharashtra ST Act D.C. (A) 1975-2002

W.B State Act D.C. (A) 1975-2002

Jharkand ST Act D.C. (A) 2000-2002

Jharkand ST Act D.C. (A) 2000-2002

A.P GST Act Comm. (A) 1999-2002

Haryana CST Act Jt. Comm. (A) 1999-2003

J & K ST Act D.C. (A) 2001-2002

M.P Comm. Tax Act D.C. (A) 1993-2002

Uttaranchal ST Act Jt. Comm. (A) 2000-2002

Pondicherry ST Act D.C. (A) 1999-2000

x) There are no accumulated losses at the end of the fnancial year. The Company has not incurred any Cash Loss during the year and immediately preceding fnancial year.

xi) In our opinion and according to informations and explanations given to us, the Company has not defaulted in repayment of dues to any fnancial institutions, banks or debenture holders.

xii) As informed to us the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not carrying on the business of Chit Fund, Nidhi or Mutual Benefts Fund / Societies.

xiv) The Company is not dealing or trading in Shares, Securities and other Investments.

xv) The Company has not given any guarantee for loan taken by others from banks or fnancial institutions.

xvi) The Company has not taken any term loans during the fnancial year.

xvii) The Company has not raised any loans during the period. xviii) The Company has neither issued any fresh share capital nor made any preferential allotment during the period. xix) The Company has not issued any debenture during the period. xx) The Company has not raised any money by way of Public Issue during the period. xxi) As informed by the company, no case of any fraud on or by the Company has been noticed or reported during the period.

For P D M and Company Chartered Accountants

(Firm''s Reg. No. 007966N)

CA. Prabhat Jain

Place: New Delhi Partner

Date: 28.05.2013 (M. No. 086756)

---

Sep 30, 2011

1. We have audited the attached Balance Sheet of Modi Rubber Limited as at 30th September 2011, the Profit & Loss Account and the Cash Flow Statement of the Company for the period ended on that date, annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of any 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 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 & 5 of the said order.

4. Further to our comments in the annexure referred to in paragraph

3 above, we report that :-

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

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

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

iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Row Statement comply with the requirements of the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956; and;

v) On the basis of the written representations received from the directors on 30th September, 2011 and taken on record by the Board of Directors, we report that none of the Director as at 30th September, 2011 is disqualified from being appointed as director of the company under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

5. In our opinion and to the best of our information and according to the explanations given to us, we further report that subject to:-

i) Note No. 7 regarding non availability of information of unpaid balances to Micro, Small and Medium Enterprises;

ii) Note No. 13 regarding non ascertainment of value of intangible assets and value of impairment loss on Assets as per AS 26 & 28 respectively;

the total impact of which, is presently not ascertainable, the said accounts read with other notes thereon, give the information re- quired by the Companies Act ,1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:-

i) in the case of Balance Sheet, of the state of the Company's affairs as at 30th September, 2011;

ii) in the case of Profit and Loss Account, of the Profit of the Company for the period ended on that date; and;

iii) in the case of Cash Flow Statement, of the Cash Flows for the period ended on that date.

ANNEXURE TO THE AUDITORS REPORT

The Annexure referred to in the main Auditors Report of even date:-

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

b) The fixed assets (except the assets which the company has no access) have been physically verified by the management at the period end. No material discrepancy has been noticed on such verification.

c) In our opinion and according to the information and explanation given to us the Company has not disposed off a substantial part of its fixed assets during the period.

ii) a) The physical verification of the inventories of the company has been conducted at reasonable intervals. However in some cases, physical verification has not been conducted due to non-access of the inventory.

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

c) The company has maintained proper records of inventories.

As explained to us, material discrepancies noticed on physical verification of inventories as compared to book records have been properly dealt with in the books of accounts.

iii) a) The Company has granted an interest free unsecured loan to a company listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount of loan granted during the year and the balance outstanding as at SO"1 September, 2011 is Rs. 3542.61 lacs.

b) The Company has taken interest free unsecured loans from two companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs. 5790.32 lacs and the balance outstanding as at 30lh September, 2011 is Rs. Nil.

c) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of the loans granted/taken are not prima facie prejudicial to the interest of the company.

d) Such loans outstanding at the period end are at call and have not been recalled during the period.

iv) In our opinion and according to the information and explanations ' provided to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. We have not observed any continuing failure to correct major weaknesses in the aforesaid internal control system during the course of audit.

v) a) As per information and explanations provided to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section, b) As per information and explanations provided to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any public deposits. Therefore provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the directions issued by Reserve Bank of India are not applicable and therefore not commented upon.

vii) As informed to us, the company has an internal audit system commensurate with its size and nature of its business. However, due to suspension of operations, there is no designated team for internal audit.

viii) No Cost Records were maintained due to the suspension of manufacturing operations.

ix) (a) The company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities except an amount of Rs. 86.90 lacs due to Sales Tax Authorities, as at the last day of the financial year concerned for a period of more than six months from the date they become payable.

(b) According to information and explanations given to us, the dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute and the forum where the dispute is pending, are as under

S. Name of the Statute State Amount Rs. Forum Where Dispute is pending Period Which No. Lacs It Relates to

1 EXCISE/DGFT LIABLITY

1 Central Excise Act, 1944 Central Excise Act,1944 1,653.97 High Court and Appelate Tribunals 1992-2002

2 Foreign Trade Development and Delhi 1,161.20 Additional DGFT Commissioner (A) 1996-2000 Regulation Act, 1992

II SALES TAX LIABI LITY

1 U.P Trade /VAT Act Uttar Pradesh 1079.89 Tribunal, Add. Comm.(A),D.C. (A) 1977-2002

2 Bihar Finance Act Bihar 374.85 Jt. Comm. (A) 1990-2002

3 Delhi ST Act Delhi 337.08 D.C. (A) 1976-2002

4 Maharashtra ST Act Mumbai 790.52 D.C. (A) 1975-2002

5 W.B State Act Kolkatta 287.96 D.C. (A) 1975-2001

6 Jharkand ST Act Jamshedpur 65.42 D.C. (A) 2000-2002

7 Jharkand ST Act Ranchi 27.96 D.C. (A) 2000-2002

8 A.PGSTAct Andhra Pradesh 95.58 Comm. (A) 1999-2002

9 Haryana CST Act Haryana 63.05 Jt. Comm. (A) 1999-2003

10 J & K ST Act Jammu & Kashmir 42.33 D.C. (A) 2001-2002

11 M.P Comm. Tax Act Madhya Pradesh 134.40 D.C. (A) 1993-2002

12 Uttaranchal ST Act Uttranchal (Haldwani) 20.29 Jt. Comm. (A) 2000-2002

13 Pondicherry ST Act Puducherry 0.73 D.C. (A) 1999-2000

14 Karnataka Entry Tax Karnataka 2.92 D.C. 2000-2002

x) There are no accumulated losses at the end of the financial year. The Company has not incurred any Cash Loss during the year and immediately preceding financial year.

xi) In our opinion and according to information's and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions, banks or debenture holders.

xii) As informed to us the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not carrying on the business of Chit Fund, Nidhi or Mutual Benefits Fund / Societies.

xiv) The Company is not dealing or trading in Shares, Securities and other Investments.

xv) The Company has given corporate guarantees for loans taken by subsidiary companies. According to the information and explanation given to us, we are of the opinion that the terms and conditions thereof are not prejudicial to the interest of the company. There is no guarantee at the year end.

xvi) The Company has obtained term loans during the financial year which were utilized for the purpose for which they were taken.

xvii) The Company has raised loans on long term basis during the year which were utilized for the purpose for which they were raised.

xviii) The company has neither issued any fresh share capital nor made any preferential allotment during the period.

xix) The Company has not issued any debenture during the period.

xx) The Company has not raised any money by way of Public Issue during the period.

xxi) As informed by the company, no case of any fraud on or by the Company has been noticed or reported during the period.

for P D M & Co. (Firm Registration No. 07966N) CHARTERED ACCOUNTANTS

CA. PRABHATJAIN

Date : 02.12.2011 Partner

Place : New Delhi M.No. 086756

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Modi Rubber Limited as at 31a March 2010, the Profit & Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

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

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

iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement comply with the requirements of the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956; and;

v) On the basis of the written representations received from the directors and taken on record by the Board of Directors, we report that none of the Director as on 31st March, 2010 is disqualified from being appointed as director as on 31s March, 2010 of the company under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

5. In our opinion and to the best of our information and according to the explanations given to us, we further report that subject to:-

i) Note No. 1 regarding non acceptance of terms/reliefs/ concessions as per BIFR scheme SS08, by some authorities/ parties.

ii) Note No. 4(c) regarding non-provision of Deferred Tax Asset/ Liability;

iii) Note No. 7 regarding non availability of information of unpaid balances to Micro, Small and Medium Enterprises; iv) Note No. 8 regarding non confirmation/ reconciliation of various balances of Suppliers, Customers, Advances etc; and;

v) Note No. 12 regarding non ascertainment of value of intangible assets and value of impairment loss on Assets as per AS 26 & 28 respectively;

the total impact of which, is presently not ascertainable, the said accounts read with other notes thereon, give the information required by the Companies Act ,1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :-

i) in the case of Balance Sheet, of the state of the Companys affairs as at 31* March 2010;

ii) in the case of Profit and Loss Account, of the Profit of the Company for the year ended on that date; and;

iii) in the case of Cash Flow Statement, of the Cash Flows for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT The Annexure referred to in the main Auditors Report of even date :

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

b) The fixed assets have not been physically verified by the management during the year. In view of non verification, it is not possible for us to comment, if there is any serious discrepancy.

c) In our opinion and according to the information and explanation given to us the Company has not disposed off a substantial part of its fixed assets during the year.

ii) a) The physical verification of the inventories of the company has been conducted at reasonable intervals. However in some cases, physical verification has not been conducted due to non-access of the inventory

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

c) The company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to book records.

iii) a) The Company has granted an interest free unsecured loan to a company listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount of loan granted during the year and the balance outstanding as at March 31, 2010 is Rs. 1063.15 lacs.

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

c) Such loan outstanding at the year end is at call and has not been recalled during the year.

d) The Company has taken interest free unsecured loans from two companies listed in the register maintained under section 301 of the Companies Act, 1956. The maximum amount of loans taken during the year was Rs. 6354.34 lacs and the balance outstanding as at March 31, 2010 is Rs. 5790.31 lacs.

e) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of loans taken are not prima facie prejudicial to the interest of the company.

f) Such loans outstanding at the year end are at call and have not been recalled during the year.

iv) Inouropinionand accordingtothe information and explanations provided to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. We have not observed any continuing failure to correct major weaknesses in the aforesaid internal controls system during the course of audit.

v) a) As per information and explanations provided to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that Section.

b) As per information and explanations provided to us, the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

vi) The Company has not accepted any public deposits. Therefore provisions of section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the directions issued by Reserve Bank of India are not applicable and therefore not commented upon.

vii) No system of Internal Audit was operational during the year due to suspension of operations.

viii) No Cost Records were maintained due to the suspension of manufacturing operations.

ix) (a) The company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Service Tax, Custom Duty, Excise Duty and any other statutory dues with the appropriate authorities except an amount of Rs. 1009.06 lacs (including interest) due to Sales Tax Authorities, as at the last day of the financial year concerned for a period of more than six months from the date they become payable.

(b) According to information and explanations given to us, the dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute and the forum where the dispute is pending are as under :-

S. Name of the State Amount Forum Where Period to

No. Statute Rs. Lacs Dispute is Which it

pending Relates

1 EXCISE LIABILITY

I Central Excise Central 3,239.10 High Court 1992-2002 Act, 1944 Excise Act, and Appellate 1944 Tribunals

II SALES TAXT LIABILITY

1 Bihar Finance Bihar 1,469.35 Jt. Comm. (A) 1990-2002 Act

2 Delhi ST Act Delhi 1,049.36 D.C. (A) 1976-2002

3 Maharashtra Mummbai 1,793.54 D.C. (A) 1975-2002 ST Act

4 Maharashtra Nagpur 13053 D.C. (A) 1994-2000 ST Act

5 W.B State Act Kolkatta 1,078.27 D.C. (A) 1975-2001

6 Gujarat S. Tax Gujarat 279.43 Jt. Comm. (A) 1996-2002 Act

S. Name of the State Amount Forum Where Period to

No. Statute Rs. Lacs Dispute is Which It

pending Relates

7 Kerala GST Act Kerala 427.97 D.C. (A) 1980-2002

8 Jharkand ST Jamshed- 180.89 D.C. (A) 2000-2002 Act pur

9 Jharkand ST Ranchi 84.83 D.C. (A) 2000-2002 Act

10 A.P GST Act Andhra 298.02 Comm. (A) 1999-2002 Pradesh

11 Haryana CST Haryana 137.62 Jt. Comm. (A) 1999.-2003 Act

12 J & K ST Act Jammu & 254.34 D.C. (A) 1999-2002 Kashmir

13 Orissa ST Act Orissa 6.44 D.C. (A) 1999-2002

14 M.P Comm. Madhya 178.43 D.C. (A) 1993-2002 Tax Act Pradesh

15 Chattisgarh ST Chattisgarh 81.59 D.C. (A) 2001-2002 Act

16 Uttaranchal ST Uttranchal 39.52 Jt. Comm. (A) 2000-2002 Act (Haldwani)

17 Pondicherry Pondicherry 2.34 D.C. (A) 1999-2000 ST Act

18 UP Trade Tax Uttar 3,435.58 Addl. Comm. 1977-2001 Act/CST Pradesh (A)

x) The accumulated losses at the end of the financial year are less than 50% of the net worth of the Company. The Company has not incurred any Cash Loss during the year and immediately preceding financial year.

xi) In our opinion and according to informations and explanations given to us, the Company has not defaulted in repayment of dues to any financial institutions, banks or debenture holders.

xii) As informed to us the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii) The Company is not carrying on the business of Chit Fund, Nidhi or Mutual Benefits Fund / Societies.

xiv) The Company is not dealing or trading in Shares, Securities and other Investments.

xv) The Company has given corporate guarantees for loans taken by associated companies. According to the information and explanation given to us, we are of the opinion that the terms and conditions thereof are not prejudicial to the interest of the company.

xvi) The Company has not obtained any fresh term loan during the financial year.

xvii) The Company has not raised any funds during the year, thus the question of use of short term funds for long term investments does not arise.

xviii) The company has neither issued any fresh share capital nor made any preferential allotment during the year.

xix) The Company has not issued any debenture during the year.

xx) The Company has not raised any money by way of Public Issue during the year.

xxi) As informed by the company, no case of any fraud on or by the Company has been noticed or reported during the year.



for P D M & Co.

(Firm Registration No. 07966N)

CHARTERED ACCOUNTANTS

Date ; 18.09.2010 CA. PRABHAT JAIN

Place : New Delhi Partner

M.No. 86756