Auditor Report of Decolight Ceramics Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of DECOLIGHT CERAMICS LIMITED ('the Company"), which comprise the Balance Sheet as at March 31, 2015, and 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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. While conducting the 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 misstatements.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

In making those risk assessments, the auditor considers internal 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 an adequate internal financial controls system over financial reporting in place and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Board of 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 financial statements read together with and subject to the notes thereon, 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, to the extent applicable; subject to-

a) Unutilized fund of equity preferential issue privately placed lying in Inter Corporate Deposits to the tune of Rs. 27.57/- crores is pending for renewal / receipt from the respective parties. Refer Note 27(10);

b) The reasons pertaining to highly uncertainty about the Going Concern aspect of the company. Refer Notes 27(11).

i. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2015;

ii. In the case of the Statement of Profit and Loss, of the loss 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.

Report on Other Legal and Regulatory Requirements :

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account, as submitted to us;

d) in our opinion, the aforesaid financial statements comply with the accounting standards specified under Section 133 of the Companies Act, read with Rule 7 of the Companies (Accounts) Rules, 2014, to the extent applicable;

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

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

i. The company has disclosed the impact of pending litigations on its financial position in its financial statements as referred to in Note 27(12) to financial statements, which may affect the financial position of the company.

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, and as required on long-term contracts including derivative contracts, except as referred to in Note 27(13) to the financial statements.

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

ANNEXURE TO THE AUDITOR'S REPORT

(Referred to in paragraph 1 of our Report of even date on the Statement of Accounts of DECOLIGHT CERAMICS LIMITED, for the year ended on 31st March, 2015)

i. FIXED ASSETS :

a. In our opinion, the company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to size of the company and nature of its assets, however certain material discrepancies with respect to book records were noticed on such verification by bank / its authorized representatives as mentioned in Note 27(11 )(g) to the financial statements.

ii. INVENTORIES :

a. As explained to us, physical verification of inventory has been conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable in relation to its size and nature of business.

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 its size and nature of business.

c. In our opinion, the company is generally maintaining proper records of inventory in relation to its size and nature of business. However, as reported by the bank, there were certain material discrepancies noticed with respect to stock statements submitted to the bank by the company compared to its physical verification of inventory carried out by bank / its authorized representatives. As explained to us by management of the company, there were no material discrepancies on physical verification as compared to the book records. However, the year end inventory of the company was NIL.

iii. LOANS :

a. According to the information and explanations given to us and on the basis of our examination of the books of account, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013, during the year under review. Consequently, the provisions of clause (iii) of the order are not applicable to the company.

iv. INTERNAL CONTROL :

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business with regard to purchase of inventory and fixed assets and with regard to sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in these areas.

v. DEPOSITS :

As explained to us, the company has not accepted any loans or deposits within meaning of Section 73 to 76 of the Companies Act, 2013 read with Rule 2(b) of the Companies (Acceptance of Deposit's) Rules 2014, during the year under review.

vi. COST RECORDS :

According to the information and explanations provided by the management to us and to the best of our knowledge, the Company is not engaged in production of any such goods or production of any such services for which the Central Government has prescribed particulars relating to utilization of material or labour or other items of cost. Hence the provisions of section 148(1) of the Act do not apply to the Company.

vii. STATUTORY DUES :

a. According to the records of the company and on the basis of information and explanation explained to us, undisputed statutory dues including provident fund, employee's state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, value added tax, cess to the extent applicable and any other statutory dues applicable to it, were being generally deposited delayed / not deposited with the appropriate authorities. Further according to information and explanation given to us, undisputed statutory dues accounted and applicable to the company as per the opinion of the management, outstanding as at 31st March, 2015 for a period of more than 6 months from the date they become payable are Central Excise Duty Rs. 0.64 Lacs, Value Added Tax & Central Sales Tax of Rs. 6.59 lacs, TDS of Rs. 0.89 Lacs, Provident Fund Rs. 0.94 lacs, and Professional tax of Rs. 0.11 lacs.

b. According to the information and explanation available to us, details of dues of Excise Duty, VAT and Cess which have not been deposited on account of any dispute with appellate authority, are given below :

Sr. Name of the Nature of dues Amount No. statue under dispute Rs. In lacs

1. The Central Excise duty including 4.65 Excise Act interest and penalty 1944* as applicable ;

2. The GVAT Act, Central Sales Tax 146.90 2003 (excluding applicable interest and penalty

3 The GVAT Act, Central Sales Tax 1631.29 2003 (excluding applicable interest and penalty)

Sr. Name of the Period to Forum where No. statue which amount dispute is relates pending

1. The Central 2004-05 Tribunal Excise Act 1944*

2. The GVAT Act, 2009-10 Commissioner 2003 (Appeals)

3 The GVAT Act, 2010-11 Commissioner 2003 (Appeals)

The excise department had issued certain show cause notices amounting to tax liability of Rs. 493.96 lacs, which are pending at adjudication level and amount paid under protest for the same amounting to Rs. 408.79 lacs.

* However the company has paid under protest Rs. 2.60 lacs for the above.

c. As per the information and explanation available to us and to the best of our knowledge, there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

viii. CASH LOSSES AND ACCUMULATED LOSSES :

The company has accumulated losses of Rs. 6066.84 Lacs which have exceeded fifty percent of its net worth as at the end of the financial year under review. The company has incurred cash loss in the year under review to the tune of Rs. 2329.80 Lacs and it has incurred cash loss of Rs. 3045.16 Lacs in the immediately preceding financial year.

ix. DUES TO FINANCIAL INSTITUTION, BANKS OR DEBENTURE HOLDER :

Based on our audit procedures and as per information and explanation given to us by the management of the company, we are of the opinion that company has defaulted in repayment of dues to banks during the year under review. The short term borrowings from the banks by the company have been classified as Non Performing Assets (NPA) w.e.f. 28th October, 2013. Details of default at year end are as follows:

Period of Default Amount (Rs. In lacs)

Less than 30 days 0.21

30 to 90 days 0.41

More than 90 days (Excluding uncharged interest of Rs. 791.21 Lacs) 3434.85

x. GUARANTEE FOR LOANS TAKEN BY OTHERS :

According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from any bank or financial institutions.

xi. TERM LOANS :

Based on our audit procedures and according to information and explanations given to us, the existing term loans have been applied for the purpose for which they were obtained.

xii. FRAUD :

Based upon the audit procedures performed and as per the information and explanation 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, except plant & machineries not in use having book value of Rs. 159.53/- Lacs have been sold at Rs. 40.96/- Lacs without taking prior permission of the bankers to whom such plant & machineries were hypothecated. As explained by the management, they have satisfactorily replied to the bankers in this aspect.

For, SVK & ASSOCIATES Chartered Accountants

Shilpang V. Karia Partner Place : Morbi M. No.: 102114 Date : 30th May, 2015 Firm No.: 118564W

---

Mar 31, 2014

We have audited the accompanying financial statements of DECOLIGHT CERAMICS LIMITED (''the Company"), which comprise the Balance Sheet as at March 31, 2014, and 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

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in 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 entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements read together with and subject to the notes thereon, 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, to the extent applicable;

Subject to unutilized fund of equity preferential issue privately placed lying in Inter-Corporate Deposits to the tune of Rs. 27.57/- crore is pending for renewal / receipt from the respective parties. Refer Note 28(10)

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

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

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

Emphasis of Matter

We draw attention to Notes 28 (11 to 15) with respect to the fact that the company has prepared its financial statements by applying the going concern assumption, notwithstanding of the facts as mentioned in such notes.

Our report is not qualified in this regard.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report comply 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; 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 31st March, 2013 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

Annexure To The Auditor''s Report (Referred to in paragraph 1 of our Report of even date on the Statement of Accounts of DECOLIGHT CERAMICS LIMITED, for the year ended on 31st March, 2014)

i. FIXED ASSETS:

a. In our opinion, the company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to size of the company and nature of its assets. No material discrepancies with respect to book records were noticed on such verification.

c. As per information & explanation produced for our verification, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected. However, in our opinion there is substantial uncertainty about the going concern status of the company looking to the matters referred in Note 28 (10 to 15).

ii. INVENTORIES:

a. As explained to us, physical verification of inventory has been conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable in relation to its size and nature of business.

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 its size and nature of business.

c. In our opinion, the company is generally maintaining proper records of inventory in relation to its size and nature of business. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. LOANS:

a. According to the information and explanations given to us and on the basis of our examination of the books of account, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, during the year under review. Consequently, the provisions of clauses (iii) (b), (c) and (d) of the order are not applicable to the company.

b. According to the information and explanations given to us and on the basis of our examination of the books of account, the company has taken unsecured loans aggregating to Rs. 118.20 lacs from three directors of the company, being parties covered in the register maintained under section 301 of the Companies Act, 1956. The total maximum amount involved during the year from all three parties together was Rs. 350.92 lacs and the total year end balance of loans taken from three directors was Rs. 334.17 lacs.

c. According to information and explanation given to us and in our opinion the rate of interest and other terms and conditions, wherever stipulated were not prima facie prejudicial to the interest of the company.

d. According to the information and explanations given to us said loans were repayable on demand and the repayment was within dates demanded.

iv. INTERNAL CONTROL

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in these areas.

v. TRANSACTIONS IN PURSUANCE OF SECTION 301:

a. According to information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act, if any that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements, if any, have been made at prices which are reasonable having regard to the prevailing market prices available at the relevant time.

vi. DEPOSITS:

As explained to us, the company has not accepted any deposits from the public within meaning of Section 58A and 58AA of the Companies Act, 1956, during the year under review.

vii. INTERNAL AUDIT:

In our opinion and according to information and explanations given to us, no internal audit carried out during the year under review, looking to the small volume of business operations carried out by the company during the year and critical financial position of the company.

viii. COST RECORDS:

We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the central government under section 209(1)(d) of the Companies Act, 1956 and are of the opinion, that prima facie, the prescribed cost records have been made and maintained. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. STATUTORY DUES:

a. According to the records of the company and on the basis of information and explanation explained to us, undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess to the extent applicable and any other statutory dues applicable to it, were being generally deposited delayed / not deposited with the appropriate authorities. Further according to information and explanation given to us, undisputed statutory dues accounted and applicable to the company as per the opinion of the management, outstanding as at 31st March, 2014 for a period of more than 6 months from the date they become payable are Value Added Tax & Central Sales Tax of Rs. 166.58 lacs, TDS of Rs. 0.43 lacs, Provident Fund Rs. 1.54 lacs, Service Tax Rs. 0.21 lacs and Professional tax of Rs. 2.32 lacs.

b. According to the information and explanation available to us, details of dues of Excise Duty, VAT and Cess which have not been deposited on account of any dispute with appellate authority, are given below:

Sr. Name of Nature of dues Amount No. the Statue under dispute rs in Lacs

1. The Central Excise duty including 4.65 Excise Act interest and penalty 1944 * as applicable

2. The GVAT Central Sales Tax 146.90 Act, 2003

Name of the Statute Period to Forum where which dispute is pending amount relates

The Central Excise Act 1944 *2004-05 Tribunal

The GVAT Act, 2003 2009-10 Commissioner (Appeals)

The excise department had issued certain show cause notices amounting to tax liability of Rs. 493.96 lacs, which are pending at adjudication level and amount paid under protest for the same amounting to Rs. 408.79 lacs.

* However the company has paid under protest Rs. 2.60 lacs for the above.

x. CASH LOSSES AND ACCUMULATED LOSSES:

The company has accumulated losses of Rs. 3222.67 lacs at the end of the year under review. The company has incurred cash loss in the year under review to the tune of Rs. 3045.16 lacs and it has incurred cash loss of Rs. 1120.07 lacs in the immediately preceding financial year.

xi. DUES TO FINANCIAL INSTITUTION, BANKS OR DEBENTURE HOLDER:

Based on our audit procedures and as per information and explanation given to us by the management of the company, we are of the opinion that company has defaulted in repayment of dues to banks during the year under review. The short term borrowings from the banks by the company have been classified as Non Performing Assets (NPA) w.e.f. 28th October, 2013. Details of default at year end are as follows:

Period of Default Amount (? In lacs)

Less than 30 days 0.18

30 to 90 days 0.18

More than 90 days (Excluding uncharged interest of ? 202.57 lacs) 3344.86

xii. LOANS & ADVANCES ON PLEDGE OF SHARES DEBENTURES & OTHER SECURITIES:

In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

xiii. CHIT FUND/ NIDHI / MUTUAL BENEFIT FUND / SOCIETY:

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

xiv. TRADING IN SHARES, SECURITIES, DEBENTURES & OTHER INVESTMENTS:

According to information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

xv. GUARANTEE FOR LOANS TAKEN BY OTHERS:

According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from any bank or financial institutions.

xvi.TERM LOANS:

Based on our audit procedures and according to information and explanations given to us, the company has obtained vehicle loan during the year under review and same has be applied for the purpose it was obtained.

xvii. SHORT TERM FUNDS USED FOR LONG TERM INVESTMENTS:

According to the information and explanations given to us, and on overall examination of the year end balance sheet of the company, we are of the opinion that prima facie, no funds raised on short-term basis have been used for long-term investments.

xviii. PREFERENTIAL ALLOTMENT OF SHARES:

Based on the audit procedures performed and according to the information and explanations given to us, during the year under review, the company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. DEBENTURES:

The company has no outstanding debenture during the year under review.

xx. PUBLIC ISSUE:

The company has not raised any money through a public issue during the year under review.

xxi. FRAUD:

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

For SVK & ASSOCIATES Chartered Accountants Firm No. – 118564W Shilpang V. Karia Partner Place: Morbi M. No. – 102114 Date: 30th May, 2014

---

Mar 31, 2013

Report on Financial Statements

We have audited the accompanying financial statements of DECOLIGHT CERAMICS LIMITED (''the Company"), which comprise the Balance Sheet as at March 31, 2013, and 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

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

Auditor''s Responsibility

Our responsibility is to express 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 read together with and subject to the notes thereon, 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, to the extent applicable;

Subject to unutilized fund of equity preferential issue privately placed lying in Inter-Corporate

Deposits to the tune of Rs. 28.32/- crore is pending for renewal / receipt from the respective parties. Refer Note 28(11)

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

d) in our opinion, the Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with by this report 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, as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013 from being appointed as a director in terms of clause (g) of sub- section (1) of Section 274 of the Companies Act, 1956;

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

Annexure To The Auditor''s Report

(Referred to in paragraph 1 of our Report of even date on the Statement of Accounts of DECOLIGHT CERAMICS LIMITED, for the year ended on 31st March, 2013)

i. FIXED ASSETS:

a. In our opinion, the company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to size of the company and nature of its assets. No material discrepancies with respect to book records were noticed on such verification.

c. As explained to us, the company has sold substantial part of fixed assets of Aluminium Composite Panels manufacturing division. However in our opinion, going concern status of the company as a whole is not affected since fixed assets and business of Aluminium Composite Panels manufacturing division was not substantial considering the total fixed assets and business of the company as a whole.

ii. INVENTORIES:

a. As explained to us, physical verification of inventory has been conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable in relation to its size and nature of business.

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 its size and nature of business.

c. In our opinion, the company is generally maintaining proper records of inventory in relation to its size and nature of business. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. LOANS:

a. According to the information and explanations given to us and on the basis of our examination of the books of account, the company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956, during the year under review. Consequently, the provisions of clauses (iii) (b), (c) and (d) of the order are not applicable to the company.

b. According to the information and explanations given to us and on the basis of our examination of the books of account, the company has taken unsecured loans aggregating to Rs. 418.52 lacs from three directors of the company and Rs. 178.50 lacs from one corporate, being parties covered in the register maintained under section 301 of the Companies Act, 1956. The total maximum amount involved during the year from all four parties together was Rs. 504.92 lacs and the total year end balance of loans taken from three directors is Rs. 258.96 lacs and from corporate is NIL.

c. According to information and explanation given to us and in our opinion the rate of interest and other terms and conditions, wherever stipulated were not prima facie prejudicial to the interest of the company.

d. According to the information and explanations given to us said loans were repayable on demand and the repayment was within dates demanded.

iv. INTERNAL CONTROL

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in these areas.

v. TRANSACTIONS IN PURSUANCE OF SECTION 301:

a. According to information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act, if any, that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements, if any, have been made at prices which are reasonable having regard to the prevailing market prices available at the relevant time.

vi. DEPOSITS:

As explained to us, the company has not accepted any deposits from the public within meaning of Section 58A and 58AA of the Companies Act, 1956, during the year under review.

vii. INTERNAL AUDIT:

In our opinion and according to information and explanations given to us, the internal audit system of the company is commensurate with size and nature of its business.

viii. COST RECORDS:

We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the central government under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion, that prima facie, the prescribed cost records have been made and maintained. However, we have not made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. STATUTORY DUES:

a. According to the records of the company and on the basis of information and explanation explained to us, undisputed statutory dues including provident fund, investor education and protection fund, employee''s state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess to the extent applicable and any other statutory dues applicable to it, were being generally deposited delayed with the appropriate authorities. Further according to information and explanation given to us, undisputed statutory dues accounted and applicable to the company as per the opinion of the management, outstanding as at 31st March, 2013 for a period of more than 6 months from the date they become payable are Value Added Tax & Central Sales Tax of Rs. 89.61 lacs, TDS of Rs. 0.01 lacs, Service Tax Rs. 5.27 lacs and Professional tax ofRs." 2.01 lacs.

b. According to the information and explanation available to us, details of dues of Excise Duty and Cess which have not been deposited on account of any dispute with appellate authority, are given below:



Sr. Name of Nature of dues Amount Period to Forum where No. the Statue under dispute which dispute is pending Rs. in Lacs amount relates

1. The Central Excise duty including 4.65 2004-05 Tribunal Excise Act interest and penalty 1944 * as applicable

The excise department had issued certain show cause notices amounting to tax liability of Rs. 493.96 lacs, which are pending at adjudication level and amount paid under protest for the same amounting to Rs. 408.79 lacs.

* However the company has paid under protest Rs. 2.60 lacs for the above.

x. CASH LOSSES AND ACCUMULATED LOSSES:

The company has no accumulated losses at the end of the year under review, however it has incurred cash loss in the year under review to the tune of Rs. 1120.07 lacs and it has incurred cash loss of Rs. 983.60 lacs in the immediately preceding financial year.

xi. DUES TO FINANCIAL INSTITUTION, BANKS OR DEBENTURE HOLDER:

Based on our audit procedures and as per information and explanation given to us by the management of the company, we are of the opinion that company has defaulted in repayment of dues to banks during the year under review. The details of default at year end are as follows:

Period of Default Amount (Rs. In lacs)

Less than 30 days 67.98

30 to 90 days 43.99

However as per further information and explanations received, out of the total overdue as stated above of Rs. 111.97 lacs as on the balance sheet date, Rs. 78.62 lacs has been paid after balance sheet date., till the date of signing this report.

xii. LOANS & ADVANCES ON PLEDGE OF SHARES DEBENTURES & OTHER SECURITIES:

In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

xiii. CHIT FUND/ NIDHI / MUTUAL BENEFIT FUND / SOCIETY:

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

xiv. TRADING IN SHARES, SECURITIES, DEBENTURES & OTHER INVESTMENTS:

According to information and explanations given to us, the company is not dealing or trading in shares, securities, debentures and other investments.

xv. GUARANTEE FOR LOANS TAKEN BY OTHERS:

According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from any bank or financial institutions.

xvi. TERM LOANS:

Based on our audit procedures and according to information and explanations given to us, the company has not obtained any new term loan during the year under review.

xvii. SHORT TERM FUNDS USED FOR LONG TERM INVESTMENTS:

According to the information and explanations given to us, and on overall examination of the year end balance sheet of the company, we are of the opinion that prima facie, no funds raised on short-term basis have been used for long-term investments.

xviii. PREFERENTIAL ALLOTMENT OF SHARES:

Based on the audit procedures performed and according to the information and explanations given to us, during the year under review, the company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. DEBENTURES:

The company has no outstanding debenture during the year under review.

xx. PUBLIC ISSUE:

The company has not raised any money through a public issue during the year under review.

xxi. FRAUD:

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

For, SVK & ASSOCIATES

Chartered Accountants

Shilpang V. Karia

Partner

M. No. - 102114

Place: Morbi

Firm No. - 118564W

Date: 25th May, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of DECOLIGHT CERAMICS LIMITED, as at March 31, 2012, and also the Profit and Loss Account and the Cash Flow Statement 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 auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure 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 and the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub- section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks and according to the information and explanations given to us, we enclose in the Annexure, a statement on the matters specified in paragraph 4 and 5 of the said Order.

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

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

ii. In our opinion, proper books of account as required by law have been kept by the Company, so far as it 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 & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

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

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with and subject to the 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;

Subject to unutilized fund of equity preferential issue privately placed lying in Inter- Corporate Deposits to the tune of Rs. 28.47/- crore is pending for renewal / receipt from the respective parties. Refer Note 26(11)

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

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

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

Annexure To The Auditor's Report (Referred to in paragraph 3 of our Report of even date on the Statement of Accounts of DECOLIGHT CERAMICS LIMITED, for the year ended on 31st March, 2012)

i. FIXED ASSETS:

a. In our opinion, the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to size of the company and nature of its assets. No material discrepancies with respect to book records were noticed on such verification.

c. In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

ii. INVENTORIES:

a. As explained to us, physical verification of inventory has been conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable in relation to its size and nature of business.

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 its size and nature of business.

c. On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory in relation to its size and nature of business. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. LOANS:

a. As explained to us, the company has granted unsecured loans to three parties being directors covered in the register maintained under Section 301 of the Companies Act, 1956. Maximum amount involved was Rs. 45.88 lacs and the year end balance was Rs. NIL.

b. According to information and explanation given to us and in our opinion, the rate of interest and other terms and conditions of the loans granted to above parties were not prima facie prejudicial to the interest of the company.

c. In our opinion and according to information and explanation given to us, the company has received the principal amount and interest amount on demand.

d. According to information and explanation given to us, there was no overdue for the loans granted by the company.

e. As explained to us, the company has taken unsecured loans from three parties being directors of the company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year from all such parties was Rs. 83.61 lacs and the year end balance of loans taken from such parties is Rs. 2.12 lacs.

f. According to information and explanation given to us and in our opinion the rate of interest and other terms and conditions, wherever stipulated were not prima facie prejudicial to the interest of the company.

g. According to the information and explanations given to us said loans were repayable on demand and the repayment was within dates demanded.

iv. INTERNAL CONTROL

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, n o major weakness has been noticed in the internal control system in these areas.

v. TRANSACTIONS IN PURSUANCE OF SECTION 301:

a. According to information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices available at the relevant time.

vi. DEPOSITS:

As explained to us, the company has not accepted any deposits from the public within meaning of Section 58A and 58AA of the Companies Act, 1956, during the year under review.

vii. INTERNAL AUDIT:

In our opinion and according to information and explanations given to us, the internal audit system of the company is commensurate with size and nature of its business.

viii. COST RECORDS:

We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the central government under section 209(1 )(d) of the Companies Act, 1956 and are of the opinion, that prima facie, the prescribed cost records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. STATUTORY DUES:

a. As per information and explanation available to us, undisputed statutory dues including provident fund, investor education and protection fund, employee's state insurance, income- tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it, were being generally deposited delayed with the appropriate authorities. Further according to information explanation given to us, undisputed statutory dues accounted and applicable to the company as per the opinion of the management, outstanding as at 31st March, 2012 for a period of more than 6 months from the date they become payable are Value Added Tax & Central Sales Tax of Rs.80.99 lacs, Income tax of Rs. 3.74 lacs, Service Tax Rs. 12.44 lacs, Professional tax of Rs.0.84 lacs and Provident Fund of Rs. 2.95. lacs.

b. According to the information and explanation available to us, details of dues of Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute with appellate authority, are given below:

Sr. Name of Nature of dues Amount Period to Forum where No. the Statue under dispute which dispute is pending Rs.in Lacs amount relates

1. The Central Excise duty including 4.65 2004-05 Tribunal Excise Act interest and penalty 1944 * as applicable

The excise department had issued certain show cause notices amounting to tax liability of Rs. 493.96 lacs, which are pending at adjudication level and amount paid under protest for the same amounting to Rs. 408.79 lacs.

*However the company has paid under protest Rs. 2.60 lacs for the above.

x. CASH LOSSES AND ACCUMULATED LOSSES:

The company has no accumulated losses at the end of the year under review, however it has incurred cash loss in the year under review to the tune of Rs. 983.60 lacs, but it has not incurred any cash loss in the immediately preceding financial year.

xi. DUES TO FINANCIAL INSTITUTION, BANKS OR DEBENTURE HOLDER:

Based on our audit procedures and as per information and explanation given to us by the management of the company, we are of the opinion that company has defaulted in repayment of dues to banks during the year under review. The details of default at year end are as follows:

Period of Default Amount (Rs. In lacs)

Less than 30 days 80.89

30 to 90 days 156.60

However as per further information and explanations received, most overdue as of balance sheet date has been paid after balance sheet date.

xii. LOANS & ADVANCES ON PLEDGE OF SHARES DEBENTURES & OTHER SECURITIES: In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

xiii. CHIT FUND/ NIDHI / MUTUAL BENEFIT FUND / SOCIETY:

In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, clauses 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the company.

xiv. TRADING IN SHARES, SECURITIES, DEBENTURES & OTHER INVESTMENTS:

The company is not dealing or trading in shares, securities, debentures and other investments.

xv. GUARANTEE FOR LOANS TAKEN BY OTHERS:

According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from any bank or financial institutions. Accordingly clauses 4(xv) is not applicable.

xvi. TERM LOANS:

In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purpose for which they were obtained.

xvii. SHORT TERM FUNDS USED FOR LONG TERM INVESTMENTS:

According to the information and explanations given to us, and on overall examination of the year end balance sheet of the company, we are of the opinion that prima facie, no funds raised on short-term basis have been used for long-term investments.

xviii. PREFERENTIAL ALLOTMENT OF SHARES:

According to the information and explanations given to us, during the year under review, the company has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. DEBENTURES:

The company has not issued any debentures during the year under review.

xx. PUBLIC ISSUE:

The company has not raised any money through a public issue during the year under review.

xxi. FRAUD:

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

For, SVK & ASSOCIATES

Chartered Accountants

Shilpang V. Karia

Partner

M. No. - 102114 Place: Morbi

Firm No. - 118564W Date: 30th May, 2012

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of DECOLIGHT CERAMICS LIMITED, as at March 31, 2011, and also the Profit and Loss Account and the Cash Flow Statement 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 auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure 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 and the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks and according to the information and explanations given to us, we enclose in the Annexure, a statement on the matters specified in paragraph 4 and 5 of the said Order.

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

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

ii. In our opinion, proper books of account as required by law have been kept by the Company, so far as it 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 & Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956, to the extent applicable;

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

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with and subject to the 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;

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

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

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

Annexure To The Auditor's Report

(Referred to in paragraph 3 of our Report of even date on the Statement of Accounts of DECOLIGHT CERAMICS LIMITED, for the year ended on 31st March, 2011)

i. FIXED ASSETS:

a. In our opinion, the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to size of the company and nature of its assets. No material discrepancies with respect to book records were noticed on such verification.

c. In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

ii. INVENTORIES:

a. As explained to us, physical verification of inventory has been conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable in relation to its size and nature of business.

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 ad- equate in relation its size and nature of business.

c. On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory in relation to its size and nature of busi- ness. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. LOANS:

a. As explained to us, the company has not granted any loans, secured or unsecured to compa- nies, firms or other parties covered in the register maintained under Section 301 of the Com- panies Act, 1956, during the year under review. Accordingly clauses 4(iii) (a), (b), (c) and (d) are not applicable.

b. As explained to us, the company has taken unsecured from three parties being directors of the company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year from all such parties was Rs. 377.16 lacs, and the year end balance of loans taken from such parties is Rs. 80.67 lacs.

c. According to information and explanation given to us and in our opinion the rate of interest and other terms and conditions, wherever stipulated were not prima facie prejudicial to the interest of the company.

d. According to the information and explanations given to us said loans were repayable on de- mand and the repayment was within dates demanded.

iv. INTERNAL CONTROL

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in these areas.

v. TRANSACTIONS IN PURSUANCE OF SECTION 301:

a. According to information and explanations given to us, we are of the opinion that the particu- lars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under Section 301 have been so entered.

b. In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices available at the relevant time.

vi. DEPOSITS:

As explained to us, the company has not accepted any deposits from the public within meaning of Section 58A and 58AA of the Companies Act, 1956, during the year under review.

vii. INTERNAL AUDIT:

In our opinion and according to information and explanations given to us, the internal audit system of the company is commensurate with size and nature of its business.

viii. COST RECORDS:

To the best of our knowledge and as explained to us, the central government has not prescribed the maintenance of cost records for the business of the company under section 209(1)(d) of the Compa- nies Act, 1956, except for wind power generation business of the company. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. STATUTORY DUES:

a. As per information and explanation available to us, undisputed statutory dues including provi- dent fund, investor education and protection fund, employee's state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues applicable to it, have been generally regularly deposited with the appropriate authorities, though there had been certain delays during the year under review. Further according to information and explanation given to us, no such undisputed statutory dues applicable to the company were outstanding as at 31st March, 2011 for a period of more than 6 months from the date they become payable, except value added tax of Rs. 12.58 lacs & professional tax Rs. 0.19 lacs.

b. According to the information and explanation available to us, details of dues of Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute with appellate authority, are given below:

Name of Nature of dues Amount Period Forum where the statue under to which dispute is dispute amount pending Rs. In relates lacs

The Central Excise duty 4.65 2004-05 Tribunal Excise Act including interest 1944* and penalty as applicable

The Finance Service Tax 1.49 2007-09 Commission Act, 1994** Penalty er(Appeals) The excise / service tax department has issued certain show cause notices amounting to tax liability of Rs. 511.87 lacs, which are pending at adjudication level and amount paid under protest for the same amounting to Rs. 408.79 lacs.

* However the company has paid under protest Rs. 2.60 lacs for the above.

** However the company has received stay order for the above.

x. CASH LOSSES AND ACCUMULATED LOSSES:

The company has no accumulated losses at the end of the year under review and it has not incurred any cash losses in the year under review and the immediately preceding financial year.

xi. DUES TO FINANCIAL INSTITUTION, BANKS OR DEBENTURE HOLDER:

Based on our audit procedures and as per information and explanation given to us by the management of the company, we are of the opinion that company has defaulted in repayment of dues to banks and financial institution during the year under review. The details default at year end after taking into the consideration restructuring / rescheduling of the loans granted by the bank are as follows:

Period of Default Amount (Rs. In lacs)

Less than 30 days 135.74

30 to 90 days 23.74

However as per further information and explanations received, most overdue as of balance sheet date has been paid after balance sheet date.

xii. LOANS & ADVANCES ON PLEDGE OF SHARES DEBENTURES & OTHER SECURITIES:

In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

xiii. CHIT FUND/ NIDHI / MUTUAL BENEFIT FUND / SOCIETY:

In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, clauses 4(xiii) of the Companies (Auditor's Report) Order, 2003 (as amended) is not applicable to the company.

xiv. TRADING IN SHARES, SECURITIES, DEBENTURES & OTHER INVESTMENTS:

The company is not dealing or trading in shares, securities, debentures and other investments.

xv. GUARANTEE FOR LOANS TAKEN BY OTHERS:

According to the information and explanations given to us, the company has not given any guaran- tee for loans taken by others from any bank or financial institutions. Accordingly clauses 4(xv) is not applicable.

xvi. TERM LOANS:

In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purpose for which they were obtained.

xvii. SHORT TERM FUNDS USED FOR LONG TERM INVESTMENTS:

According to the information and explanations given to us, and on overall examination of the year end balance sheet of the company, we are of the opinion that prima facie, no funds raised on short- term basis have been used for long-term investments.

xviii.PREFERENTIAL ALLOTMENT OF SHARES:

According to the information and explanations given to us, during the year under review, the com- pany has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. DEBENTURES:

The company has not issued any debentures during the year under review.

xx. PUBLIC ISSUE:

We have verified the end use of money raised during the year under review by preferential issue of equity shares as disclosed in the notes to the financial statements.

xxi. FRAUD:

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



For SVK & ASSOCIATES Chartered Accountants Shilpang V. Karia Partner M. No. – 102114 Firm No. - 118564W

Place : Morbi Date :28th May, 2011

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of DECOLIGHT CERAMICS LIMITED, as at March 31, 2010, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosure 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 and 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 Companies Act, 1956 and on the basis of such checks and according to the information and explanations given to us, we enclose in the Annexure, a statement on the matters specified in paragraph 4 and 5 of the said Order.

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

i. We have obtained all the information and explanations, which to the best of our knowledge

and belief were necessary for the purposes of our audit; ii. In our opinion, proper books of account as required by law have been kept by the Company, so

far as it 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 & Loss Account and Cash Flow Statement dealt with by

this report comply with the accounting standards referred to in sub-section (3C) of Section 211

of the Companies Act, 1956, to the extent applicable; v. On the basis of written representations received from the directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956; vi. In our opinion and to the best of our information and according to the explanations given to us, -- the said accounts read together with and subject to the 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;

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

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

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

Annexure To The Auditors Report (Referred to in paragraph 3 of our Report of even date on the Statement of Accounts of DECOLIGHT CERAMICS LIMITED, for the year ended on 31st March, 2010)

i. FIXED ASSETS:

a. In our opinion, the company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b. As explained to us, the fixed assets have been physically verified by the management during the year in a phased periodical manner, which in our opinion is reasonable, having regard to size of the company and nature of its assets. No material discrepancies with respect to book records were noticed on such verification.

c. In our opinion, the company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

ii. INVENTORIES:

a. As explained to us, physical verification of inventory has been conducted by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable in relation to its size and nature of business.

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 ad- equate in relation its size and nature of business.

c. On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory in relation to its size and nature of busi- ness. As explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

iii. LOANS:

a. As explained to us, the company has not granted any loans, secured or unsecured to compa- nies, firms or other parties covered in the register maintained under Section 301 of the Com- panies Act, 1956, during the year under review. Accordingly clauses 4(iii) (a), (b), (c) and (d) are not applicable.

b. As explained to us, the company has taken unsecured loan from three parties being directors of the company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year from all such parties was Rs. 31.30 lacs, howeveryear end balance of loans taken from such parties is Nil.

c. According to information and explanation given to us and in our opinion the rate of interest and other terms and conditions, wherever stipulated were not prima facie prejudicial to the interest of the company.

d. According to the information and explanations given to us said loans were repayable on de- mand and the repayment was within dates demanded.

iv. INTERNAL CONTROL

In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in these areas.

v. TRANSACTIONS IN PURSUANCE OF SECTION 301:

a. According to information and explanations given to us, we are of the opinion that the particu- lars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under Section 3014iave been so entered.

b. In our opinion and according to the information and explanations given to us, transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices available at the relevant time.

vi. DEPOSITS:

As explained to us, the company has not accepted any deposits from the public within meaning of Section 58A and 58AA of the Companies Act, 1956, during the year under review.

vii. INTERNAL AUDIT:

In our opinion and according to information and explanations given to us, the internal audit system of the company is commensurate with size and nature of its business.

viii. COST RECORDS:

To the best of our knowledge and as explained to us, the central government has not prescribed the maintenance of cost records for the business of the company under section 209(1 )(d) of the Compa- nies Act, 1956, except for wind power generation business of the company. We have broadly reviewed the accounts and records of the company in this connection and are of the opinion, that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determining whether they are accurate or complete.

ix. STATUTORY DUES:

a. As per information and explanation available to us, undisputed statutory dues including provi- dent fund, investor education and protection fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, custom duty, excise duty, cess and other statutory dues have been generally regularly deposited with the appropriate authorities, applicable to it though there had been certain delays during the year under review. Further according to information explanation given to us, no such undisputed statutory dues applicable to the company were outstanding as at 31st March, 2010 for a period of more than 6 months from the date they become payable, except value added tax of Rs. 2.03 lacs.

b. According to the information and explanation available to us, details of dues of Excise Duty, Service Tax, Cess which have not been deposited on account of any dispute with appellate authority, are given below:

Name of Nature of dues Amount Period to Forum where

the statue under dispu te which amou nt dispute is

Rs. In lacs relates pending

The Central Excise duty including interest 4.65 2004-05 Tribunal

Excise Act 1944 and penalty as applicable

However the company has paid under protest Rs. 2.60 lacs for the above. The excise / service tax department has issued certain show cause notices amounting to tax liability of Rs. 1199.60 lacs, which are pending at adjudication level and amount paid under protest for the same amounting to Rs. 408.79 lacs.

x. CASH LOSSES AND ACCUMULATED LOSSES:

The company has no accumulated losses at the end of the year under review and it has not incurred any cash losses in the year under review and the immediately preceding financial year.

xi. DUES TO FINANCIAL INSTITUTION, BANKS OR DEBENTURE HOLDER:

Based on our audit procedures and as per information and explanation given to us by the manage- ment of the company, we are of the opinion that company has defaulted in repayment of dues to banks and financial institution during the year under review. The details default at year end after taking into the consideration restructuring / rescheduling of the loans granted by the bank are as follows:

Period of Default Amount (Rs. In lacs)

Less than 30 days 123.82

30 to 90 days 181.01

However as per further information and explanations received, overdue as of balance sheet date has been paid after balance sheet date.

xii. LOANS & ADVANCES ON PLEDGE OF SHARES DEBENTURES & OTHER SECURITIES:

In our opinion and according to information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

xiii. CHIT FUND/ NIDHI / MUTUAL BENEFIT FUND / SOCIETY:

In our opinion, the company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, clauses 4(xiii) of the Companies (Auditors Report) Order, 2003 (as amended) is not applicable to the company.

xiv. TRADING IN SHARES, SECURITIES, DEBENTURES & OTHER INVESTMENTS:

The company is not dealing or trading in shares, securities, debentures and other investments. xv. GUARANTEE FOR LOANS TAKEN BY OTHERS:

According to the information and explanations given to us, the company has not given any guaran- tee for loans taken by others from any bank or financial institutions. Accordingly clauses 4(xv) is not applicable.

xvi. TERM LOANS:

In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purpose for which they were obtained.

xvii. SHORT TERM FUNDS USED FOR LONG TERM INVESTMENTS:

According to the information and explanations given to us, and on overall examination of the year end balance sheet of the company, we are of the opinion that prima facie, no funds raised on short- term basis have been used for long-term investments.

xviii.PREFERENTIAL ALLOMENT OF SHARES:

According to the information and explanations given to us, during the year under review, the com- pany has not made any preferential allotment of shares to parties or companies covered in the register maintained under Section 301 of the Companies Act, 1956.

xix. DEBENTURES:

The company has not issued any debentures during the year under review.

xx. PUBLIC ISSUE:

We have verified the end use of money raised during the year under review by preferential issue of equity convertible warrants as disclosed in the notes to the financial statements.

xxi. FRAUD:

Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanation given 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 SVK & ASSOCIATES

Chartered Accountants

Shilpang V. Karia

Partner

M. No. - 102114

Firm No. - 118564W

Place : Morbi

Date :12th August, 2010