Auditor Report of Schablona India Ltd.

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of SCHABLONA INDIA LIMITED, which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss, 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 and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

a) In the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2015,

b) In the case of Statement of Profit & Loss,of the loss 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. In our opinion and to the best of our information and according to the explanations given to us, the Companies (Auditor's Report) Order, 2015("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure a statement on the matters Specified in paragraphs 3 and 4 of the Order.

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

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 2.1 to the financial statements;

ii. The Company does not require any provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long term contracts including derivative contracts;

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

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

I. In respect of its fixed assets:

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

(b) As explained to us, fixed assets have been physically verified by the management during the year in accordance with the phased programme of verification adopted by the management which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification and the same have been properly dealt with in the books of accounts.

II. In respect of its inventory:

a) As explained to us, the inventories of finished goods, semi-finished goods, stores, spare parts and raw materials were physically verified at regular intervals by the Management.

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

c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification of stocks as compared to book records.

III. According to the information and explanations given to us, the Company has not granted any loans to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013; and therefore paragraph 3(iii) of the Order is not applicable.

IV. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods. During the course of our Audit, we have not observed any continuing failure to correct major weaknesses in internal control.

V. The Company has not received any public deposits covered under section 73 to 76 of the Companies Act, 2013 during the year, hence clause 3(v) is not applicable.

VI. The maintenance of cost records has not been prescribed by the Central Government under section 148(1) of the Companies Act, 2013 read with Companies (Cost Records and Audit) Rules, 2014 for the goods/products manufactured the Company.

VII. In respect of statutory dues:

(a) According to the records of the Company and information and explanations given to us, the Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance (ESI), Investor Education and Protection Fund, Income Tax, Tax deducted at source, Tax collected at source, Professional Tax, Sales Tax, Value Added Tax (VAT), Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it, with the appropriate authorities.

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

Name of Nature of Period to which Amount Forum where the Statue Dues the amount relates (Rs. in lacs) dispute is pending

Sales Tax Central Sales 2012-13 8.02 Excise and Taxation Officer-cum- Act Tax Assessing Authority, Bahadurgarh

Income Tax Income Tax AY 2012-13 0.47 CIT(A)-2, Kolkata Act, 1961

Total 8.49

(c) There has not been an occasion in case of the Company during the year under report to transfer any sums to the Investor Education and Protection Fund. The question of reporting delay in transferring such sums does not arise as at 31st March, 2015.

VIII. The Company does not have the accumulated losses at the end of financial year. The Company has incurred Cash losses of Rs 346.69 lacs during the financial year covered by our audit and Rs. 89.68 lacs during the immediately preceding financial year.

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

X. In our opinion, and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year;

XI. The Term loans taken by the Company have been applied for the purpose for which they were raised.

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

For A. K. Maheshwari & Associates

Chartered Accountants

(Firm Registration No. 500106N)

Place : New Delhi (CA. Shalin Poddar)

Dated : 18th day of May, 2015 Partner

Membership No. 515616

---

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 (Act) read with the general circular 15/2013 date 13.09.2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 (Act). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") as amended by Amendment Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 (Act) read with the general circular 15/2013 date 13.09.2013 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.

The Annexure referred to in paragraph 1 of the our report of even date to the members of SCHABLONA INDIA LIMITED on the accounts of the Company for the year ended 31st March, 2014.

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

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

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

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

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

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

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

3. (a) In our opinion and according to the information and records made available to us, the Company has not granted any loan, secured or unsecured, to Companies, firms or other parties listed in the register, maintained under Section 301 of the Companies Act, 1956, therefore, sub-clause (a) to (d) of clause 4(iii) of the Order are not applicable to the Company.

(e) In our opinion and according to the information and explanations given to us, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register, maintained under Section 301 of the Companies Act, 1956, therefore, sub-clause (e) to (g) of clause 4(iii) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that Section; and

b) As per information & explanations given to us and in our opinion, 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.

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

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by Central Government under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prime facie the prescribed cost records have been maintained. We have, however, not carried out detailed examination of the same.

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

(b) According to the information and explanations given to us, there is no amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes except in cases of income tax and sales tax as per detailed below:

Name of Nature of Period to which Amount Forum where the Statue Dues the amount (Rs.in lacs) dispute is relates pending

Sales Tax Central Sales 2010-11 19.19 Excise and Act Tax Taxation Officer-cum- Assessing Authority, Bahadurgarh

Sales Tax Central Sales 2011-12 88.86 Excise and Act Tax Taxation Officer-cum- Assessing Authority, Bahadurgarh

Sales Tax VAT 2011-12 0.21 Excise and Act Taxation Officer-cum- Assessing Authority, Bahadurgarh

Total 108.26

10. The Company does not have any accumulated loss at the end of financial year. However there is a cash loss of Rs. 89.68 lacs during the financial year covered by our audit and of Rs. 75.08 lacs cash loss during the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to banks.

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

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

14. According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from banks or financial institutions.

16. Based on our audit procedures and on the information given by the management, we report that the Company has not raised any term loans during the year.

17. Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company as at 31st March, 2014, we report that no funds raised on short-term basis have been used for longterm investment by the Company and vice-versa.

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

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

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

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

For A. K. Maheshwari & Associates Chartered Accountants (Firm Registration No. 500106N)

Place : Noida (CA. Shalin Poddar) Dated : 27th day of May, 2014 Partner Membership No. 515616

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of SCHABLONA INDIA LIMITED, which comprise the Balance Sheet as at March 31, 2013, 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 Responsbility for the Financial Statements

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

Auditor’s Responsbility

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

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") as amended by Amendment Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

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

The Annexure referred to in paragraph 1 of our report of even date to the members of SCHABLONA INDIA LIMITED on the accounts of the Company for the year ended 31st March, 2013.

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

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

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

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

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

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

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

3. (a) In our opinion and according to the information and records made available to us, the Company has not granted any loan, secured or unsecured, to Companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, therefore, sub-clause (a) to (d) of clause 4(iii) of the order are not applicable to the Company.

(b) In our opinion and according to the information and explanations given to us, the Company has not taken any loan, secured or unsecured, from companies, firms or other parties except from one Company covered in the register, maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 20.00 lacs. At the end, the balance of such loan is Rs. 20.00 lacs.

(c) In our opinion, the rate of interest and other terms and condition of loan are prime facie not prejudicial to the interest of the Company.

(d) As informed to us in respect of the aforesaid loan, there is no stipulated schedule for payment of principal and interest and the same is payable on demand.

4. In our opinion and according to the information and explanations given to us, there is generally an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

5. (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section; and (b) As per information & explanations given to us and in our opinion, 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.

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

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by Central Government under Section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prime facie the prescribed cost records have been maintained. We have, however, not carried out detailed examination of the same.

9. (a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities. According to the information and explanations given to us there were no outstanding statutory dues as on 31st March, 2013 for a period of more than six months from the date they became payable. (b) According to the information and explanations given to us, there is no amount payable in respect of income tax, wealth tax, service tax, sales tax, customs duty and excise duty which have not been deposited on account of any disputes except in case of sales tax as per detailed below:

Name of Nature of Period to which Amount Forum where the Statue Dues the amount relates (Rs. in lacs) dispute is pending

Sales Tax Sales Tax 2008-09 8.41 Excise and Taxation Act Assessment Officer-cum-Assessing Authority, Bahadurgarh

Sales Tax Sales Tax 2009-10 25.01 Excise and Taxation Act Assessment Officer-cum-Assessing Autority, Bahadurgarh

Total 33.42

10. The Company does not have any accumulated loss at the end of financial year. However there is a cash loss of Rs. 75.08 lacs during the financial year covered by our audit. However, there was no cash loss during the immediately preceding financial year.

11. Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to banks.

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

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

14. According to information and explanations given to us, the Company is not trading in Shares, Mutual funds & other Investments. Therefore, the provision of this clause of the Companies (Auditor''s Report) Order, 2003 (as amended) is not applicable to the Company.

15. According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from banks or financial institutions.

16. Based on our audit procedures and on the information given by the management, we report that the Company has not raised any term loans during the year.

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

18. Based on the audit procedures performed and the information and explanations given to us by the management, we report that the Company has not made any preferential allotment of shares during the year.

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

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

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

For A. K. Maheshwari Associates

Chartered Accountants

(Firm Registration No. 500106N)

Place : Noida (CA. A. K. Maheshwari)

Dated : 29th day of May, 2013 Proprietor

Membership No. 73875

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. SCHABLONA INDIA LIMITED as at 31st March, 2012 and the Statement of Profit and Loss 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 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 accounting standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by Amendment Order, 2004 from time to time issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 & 5 of the said order, as applicable to the Company.

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

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable.

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and 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 affairs of the Company as at 31st March, 2012;

ii) in the case of Statement of Profit and Loss 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 of the Company for the year ended on that date.



ANNEXURE TO THE AUDITORS' REPORT

Referred to in Paragraph "3" of the Auditors' Report to the Members of M/s SCHABLONA INDIA LIMITED on the Accounts for the year ended 31st March, 2012.

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

b) According to the information and explanations given to us, all the fixed assets have been physically verified by the management in accordance with the programme of verification, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. No material discrepancies have been noticed on such physical verification.

c) As per record and information and explanations provided to us, no substantial part of the fixed assets has been disposed off during the year and the going concern status of the Company is not affected.

(ii) a) The stock of finished goods, stores and spares and raw materials have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of physical verification is reasonable.

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

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

(iii) a) In our opinion and according to the information and records made available to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, therefore, sub-clause (a), (b) and (c) of clause 4(iii) of the order are not applicable to the Company.

b) In our opinion and according to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties except from one Company covered in the register, maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 20.00 lacs. At the end, the balance of such loan is Rs. 20.00 lacs.

c) In our opinion, the rate of interest and other terms and condition of loan are prime facie not prejudicial to the interest of the Company.

d) In accordance with the information and explanations given to us in respect of the aforesaid loan, the principal amount is repayable on demand and there is no repayment schedule.

(iv) In our opinion and according to the information and explanations given to us, having regard to the explanation that some of the items purchased are of special nature and suitable alternative sources do not exist for obtaining comparable quotations, there are adequate internal control procedures commensurate with the size of the Company and nature of business with regard to purchases of inventories and fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing major weakness in such internal controls system.

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

b) According to information and explanations given to us, the transaction of purchase and sale of goods, material and services made in pursuance of contracts or agreements entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5.00 lacs or more in respect of each party have been made at price which are generally reasonable having regard to prevailing market prices at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted deposits from the public during the year. Therefore, the provisions of clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

(viii) As per information and explanations given to us, maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 has not been prescribed by the Central Government for the product of the Company.

(ix) 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, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Sales Tax, Custom Duty, Excise Duty, Service Tax, Cess and other material statutory dues to the extent applicable to it. According to the information and explanations given to us, no undisputed statutory dues payable for a period of more than six months from the date they became payable as at 31st March, 2012.

b) As informed to us, the disputed statutory dues aggregating Rs. 8.41 lacs in respect of sales tax that has not been deposited on account of disputed matters pending with the appropriate authorities are as under:

Name of Nature of Period to which Amount Statue Dues the amount relates (Rs. in lacs)

Sales Tax Sales Tax 2008-09 8.41 Act. Assessment

Name of Forum where the Remarks Statue dispute is pending

Sales Tax Excise and Taxation None Act. Officer-cum-Assessing Authority, Bahadurgarh

(x) The Company has no accumulated losses at the end of the financial year and has not incurred any cash loss during the year or in the financial year immediately preceding the year under report.

(xi) According to the information and explanations given to us and based on our audit procedure, the Company has not defaulted during the year in repayment of dues to banks or financial institution.

(xii) According to the information and explanations given 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) In our opinion and according to the information & explanations given to us, the Company is not a chit fund/nidhi/ mutual benefit fund/society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable.

(xiv) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Hence the provisions of clause (xiv) of paragraph 4 of the Order are not applicable.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bankers or financial institutions.

(xvi) According to the information and explanations given to us and on the basis of an overall examination of the books and records of the Company, no new term loan has been raised during the year. The term loans outstanding at the beginning of the year has been applied for which they were raised.

(xvii) According to the information and explanations given to us and on the basis of an overall examination of the books and records of the Company, we report that no fund raised on a short-term basis, which have been used for long- term investments and vice-versa.

(xviii) According to the information and explanations given to us, during the period covered by our audit report, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) Since no debentures have been issued by the Company during the year, no security was required to be created. Hence, the clause (xix) of Paragraph 4 of the Order regarding creation of security or charge in respect of debenture issued is not applicable.

(xx) During the year covered by our audit report, the Company has not raised any money by way of public issue.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.





For A. K. Maheshwari & Associates Chartered Accountants (Firm Registration No. 500106N)

(CA. A. K. Maheshwari) Proprietor Membership No. 73875

Place : Noida Dated : 26th day of May, 2012

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. SCHABLONA INDIA LIMITED as at 31st March, 2010 and the Profit and 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 accounting standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) from time to time issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 & 5 of the said order, as applicable to the Company.

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

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

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

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 to the extent applicable.

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

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and 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 affairs of the Company as at 31st 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 the Cash Flow Statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

Referred to in paragraph "3" of the Auditors Report to the Members of M/s. SCHABLONA INDIA LIMITED on the Accounts for the year ended 31st March, 2010.

(i) a) The Company has maintained proper records showing full particulars including quantitative details and situations of fixed assets except in case of certain locations where records are in process of updation/ compilation.

b) According to the information and explanations given to us, all the fixed assets have been physically verified by the management in accordance with the programme of verification, which in our opinion is reasonable, having regard to the size of the Company and nature of its Assets. No material discrepancies have been noticed on such physical verification.

c) As per record and information and explanation provided to us, no substantial part of the fixed assets has been disposed off during the year and the going concern status of the Company is not affected.

(ii) a) The stock of finished goods, stores and spares and raw materials have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of physical verification is reasonable.

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

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

(iii) A. In our opinion and according to the information and records made available to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956, therefore, sub-clause (a), (b) and (c) of clause 4

(iii) of the order are not applicable to the Company.

B. a) In our opinion and according to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties except from one Company covered in the register, maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year is Rs. 20,00,000/-. At the end, the balance of such loan is Rs. 20,00,000/-b) In our opinion, the rate of interest and other terms and condition of loan taken are not prime facie prejudicial to the interest of the Company.

c) In accordance with the information and explanation given to us in respect of the aforesaid loan, the principal amount is repayable on demand and there is no repayment schedule.

d) There is no overdue amount of loans taken from companies, firms and other parties listed in the register maintained under Section 301 of Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size and nature of business for the purchase of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any continuing major weakness in such internal control system. (v) a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that need to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered. b) According to information and explanations given to us, the transaction of purchase and sale of goods, material and services made in pursuance of contracts or agreements entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5,00,000/- or more in respect of each party have been made at price which are generally reasonable having regard to prevailing market prices at the relevant time. (vi) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year to which provisions of Section 58A & 58AA of the Companies Act, 1956 and Rules framed thereunder are applicable. (vii) In our opinion and according to the information and explanations given to us, the Company has internal audit

system commensurate with the size and nature of its business. (viii) As per information and explanations given to us, maintenance of cost records under Section 209(1)(d) of the

Companies Act, 1956 has not been prescribed by the Central Government for the product of the Company.

(ix) a) According to information and explanations given to us and as per records maintained by the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, VAT, Custom Duty, Excise Duty, Service Tax, Cess and other material statutory dues applicable to it.

b) According to information and explanations given to us, no undisputed amounts on account of Provident Fund, Investor Education and Protection Fund, Employee State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs Duty, Excise Duty, Service Tax and Cess were in arrears, as at 31st March, 2010 for a period of more than six months from the date they become applicable.

(x) The Company has no accumulated losses at the end of the financial year and has not incurred any cash loss during the year or in the financial year immediately preceding the year under report.

(xi) Based on our audit procedure and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to banks and financial institutions.

(xii) In our opinion and according to the information and explanations given 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 provisions of any special statute applicable to chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

(xiv) As the Company is not dealing or trading in shares, securities, debentures or in other Investment, therefore, reporting under this clause is not desired.

(xv) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bankers or financial institutions.

(xvi) According to the information and explanations given to us and on the basis of an overall examination of the books and records of the Company, the term loan have been applied for the purpose for which they are raised.

(xvii) According to the information and explanations given to us and on the basis of an overall examination of the books and records of the Company, we report that no funds raised on a short-term basis, which have been used for long-term investments and vice-versa.

(xviii) According to the information and explanations given to us, during the period covered by our audit report, the Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) Since no debentures have been issued by the Company during the year, no security was required to be created.

(xx) During the year covered by our audit report, the Company has not raised money by way of public issue.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.



for A. K. Maheshwari & Associates Chartered Accountants Registration No. 500106N

Place : New Delhi (CA. Anand Maheshwari)

Dated : 24th day of May, 2010 Membership No.: 073875