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A Oneindia Venture

Nifty 25,966.40 +0.58%

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Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Sensex 84,929.36 +0.53%

Nifty 25,966.40 +0.58%

22k Gold ₹ 12,300 /gm

Auditor Report of Forbes & Company Ltd.

Mar 31, 2025

To the members of Forbes & Company Limited Basis for Opinion

Report on the audit of the Standalone Financial StatementsOpinion

We have audited the accompanying Standalone Financial Statements of Forbes & Company Limited (hereinafter referred to as âthe Companyâ), which comprise the Balance sheet as at March 31,2025, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended and Notes to the Standalone Financial Statements, including a summary of material accounting policies and other explanatory information (hereinafter collectively referred as the âStandalone Financial Statementsâ).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (hereinafter referred as âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed Under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended (hereinafter referred as âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31,2025, its profit, other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

We conducted our audit in accordance with the Standards on Auditing (hereinafter referred to as âSAsâ) specified Under Section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditorâs responsibilities for the audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (hereinafter referred as âICAIâ) together with the ethical requirements that are relevant to our audit of the Standalone Financial Statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics.

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

S. No.

Key Audit Matter (KAM)

How our audit addressed the Key Audit Matters

Revenue Recognition:

Revenue recognition for Real Estate Development Activities (Refer Notes 24 and 48 to the standalone financial statements)

Revenue recognition for real estate development activities is considered a key audit matter in view of the involvement of management judgment in establishing the timing of the transfer of control to the customer, the enforceable right to payment for performance completed to date and related disclosures.

In respect of real estate development projects, Revenue is recognized upon transfer of control of residential units to customers for an amount that reflects the consideration the Company expects to receive in exchange for those units. The point of revenue recognition is normally based on the terms as included in the intimation for the unit handover to the customer on completion of the project, after which the contract becomes non-cancellable by the parties.

The Company records revenue at a point in time upon transfer of control of residential units to the customers as per requirements of Ind-AS 115 involves significant judgment by the Management.

Our audit procedures over the recognition of revenue for Real Estate

Development activities included the following:

â¢ Obtaining an understanding and evaluating the design and testing of the effectiveness of key internal financial controls in respect of revenue recognition for real estate development activities;

â¢ Obtaining an understanding of the Companyâs accounting policy on revenue recognition for real estate development activities and assessing compliance of the policy with principles enunciated under Ind-AS 115;

â¢ Obtaining a listing of contracts with customers from the Management;

â¢ On a sample basis, evaluating completeness and accuracy of the list of contracts mentioned above;

â¢ Examining mathematical accuracy in respect of the amount recognized as revenue in respect of these customer contracts;

â¢ Examining the terms of sales agreements, agreement value and other relevant details to validate revenue recognition during the year;

â¢ Obtaining evidence regarding the transfer of control considering criteria as per Ind-AS 115 and evaluating the enforceability of payment for work completed to date for validating the timing of the transfer of control to the customer; and

â¢ Evaluated the adequacy and appropriateness of the disclosures made in the standalone financial statements by the management with respect to revenue from the Real Estate Development Activities.

Based on the above audit procedures performed, we did not come across any

significant exceptions with regard to revenue recognition in respect of real

estate development activities.

Assessment of Provisions and Contingent Liabilities

(Refer Notes 18A, 18B and 38 to the standalone financial statements)

The judgment of the management is supported by advice from independent tax and legal consultants, as considered necessary by the management. Any unexpected adverse outcomes could significantly impact the Companyâs reported profit and financial position.

We considered this area as a key audit matter due to the associated uncertainty of the ultimate outcome and significant management judgment involved in the assessment.

Our audit procedures included the following:

â¢ Understanding the status of the direct and indirect tax assessments/ litigations & disputes with other parties;

â¢ Reading recent orders and/or communication received from the tax authorities and with certain other parties and management responses to such communication;

â¢ Where relevant, read the most recent available independent tax/legal advice obtained by management and evaluate the grounds presented therein;

â¢ Obtaining confirmations from the Companyâs legal/ tax consultants (internal) to confirm the status of the assessments as well as having discussions with them as and when required;

â¢ Assessing the adequacy of disclosure in the standalone financial statements.

Based on the above procedures, we did not identify any material exceptions

relating to managementâs assessment of provisions and contingent liabilities.

Information other than the Standalone Financial Statements and Auditorâs Report thereon (hereinafter referred as âother informationâ)

The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditorâs report thereon.

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

In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements, or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Management Responsibilities for the Standalone Financial Statements

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

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

The Board of Directors are responsible for overseeing the Companyâs financial reporting process.

Auditorâs Responsibilities for the audit of the Standalone Financial Statements

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

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

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

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

c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management and the Board of directors.

d) Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.

e) Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in the aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the Standalone Financial Statements.

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (âthe Orderâ), issued by the Central Government in terms of Section 143 (11) of the Act, we give in âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act and based on our audit we report that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows statement dealt with by this report are in agreement with the books of account;

d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act;

e) On the basis of the written representations received from the directors as on March 31, 2025 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from being appointed as a director in terms of Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls with reference to the Standalone Financial Statements of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls with reference to the Standalone Financial Statements; and

g) With respect to the other matters to be included in the auditorâs report in accordance with the requirements of section 197(16) of the Act, as amended, we report that in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us;

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

i. The Company has disclosed the impact of pending litigations as at March 31, 2025 on its financial position in its Standalone Financial Statements -Refer note 38 to the Standalone Financial Statements.

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

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

iv. (a) The Management has represented that, to the

best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity

(âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement;

v. During the year Company has not declared/paid any dividend hence reporting under rule 11 (f) is not applicable to that extent.

vi. Based on our examination which included test checks, the company has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Moreover, the feature of the recording audit trail (edit log) facility is enabled at the database level to log any direct data changes pertaining to the accounting software used for maintaining books of account. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with. Additionally, the audit trail has been preserved by the company as per the statutory requirements for record retention.

SHARP & TANNAN ASSOCIATES

Chartered Accountants Firmâs Registration No.: 0109983W by the hand of

CA Parthiv S Desai

Partner

Membership No.: (F) 042624 Mumbai, April 30, 2025 UDIN- 25042624BMOCXV5448

Mar 31, 2024

We have audited the accompanying Standalone Financial Statements of Forbes & Company Limited (hereinafter referred to as âthe Companyâ), which comprise the Balance sheet as at March 31,2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and Notes to the Standalone Financial Statements, including a summary of material accounting policies and other explanatory information (hereinafter collectively referred as the âStandalone Financial Statementsâ).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (hereinafter referred as âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed Under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended (hereinafter referred as âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31,2024, its profit, other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 52 of the financial statement in respect of the Scheme of Arrangement approved by the Board of Directors of the Company in their meeting dated 26th September 2022, between the company and Forbes Precision Tools and Machine Parts Limited (FPTL) and their respective shareholders under Section 230 to 232 of the Companies Act, 2013 and other applicable provisions and the rules framed thereunder.

This Scheme is a ''Scheme of Arrangement'' involving the demerger of the "Precision Tools Business" of the company into FPTL. The FPTL was incorporated on 30th August 2022 as a wholly-owned subsidiary of the Company. The Honourable National Company Law Tribunal (NCLT) of the Mumbai bench approved the scheme via Order No. C.P.(CAA)/303/MB-V/2023 dated 9th February 2024. The certified true copy of the order was received on 22nd February 2024 and filed with the Registrar of the Company on 1st March 2024. The Scheme became effective/operative from the effective date of March 1,2024, with this, the Precision Tools business of the company being transferred to and vested in FPTL with effect from the appointed date

i.e., April 1, 2023.

Our opinion is not modified in respect of this emphasis of matters.

Key Audit Matters

S. No.

Key Audit Matter (KAM)

Auditorâs Response

Revenue Recognition:

Revenue recognition for Real Estate Development Activities (Refer Notes 24 and 48 to the standalone financial statements)

The Company records revenue at a point in time upon transfer of control of residential units to the customers as per requirements of Ind-AS 115 involves significant judgment by the Management.

Our audit procedures over the recognition of revenue for Real Estate Development

activities included the following:

â¢ Obtaining an understanding and evaluating the design and testing of the effectiveness of key internal financial controls in respect of revenue recognition for real estate development activities;

â¢ Obtaining a listing of contracts with customers from the Management;

â¢ On a sample basis, evaluating completeness and accuracy of the list of contracts as mentioned above;

â¢ Examining the mathematical accuracy in respect of the amount recognized as revenue in respect of these customer contracts;

â¢ Examining the terms of sales agreements, agreement value and other relevant details to validate revenue recognition during the year;

â¢ Evaluated the adequacy and appropriateness of the disclosures made in the standalone financial statements by the management with respect to revenue from the Real Estate Development Activities.

Based on the above audit procedures performed, we did not come across any

significant exceptions with regard to revenue recognition in respect of real estate

development activities.

Assessment of Provisions and Contingent Liabilities

(Refer Notes 18A, 18B and 38 to the standalone financial statements)

We considered this area as a key audit matter due to the associated uncertainty of the ultimate outcome and significant management judgment involved in the assessment.

Our audit procedures included the following:

â¢ Understanding the current status of the direct and indirect tax assessments/ litigations & disputes with other parties;

â¢ Reading recent orders and/ or communication received from the tax authorities and with certain other parties and management responses to such communication;

â¢ Where relevant, read the most recent available independent tax/legal advice obtained by management and evaluate the grounds presented therein;

â¢ Obtaining written confirmations from the Companyâs legal/ tax consultants (internal/ external ) to confirm the status of the assessments as well as have discussions with them as and when required;

â¢ Assessing the adequacy of disclosure in the standalone financial statements.

Based on the above procedures, we did not identify any material exceptions relating

to managementâs assessment of provisions and contingent liabilities.

Information other than the Standalone Financial Statements and Auditorâs Report thereon (hereinafter referred as âother informationâ)

The Companyâs Management and Board of Directors are responsible for the preparation of the other information. The other information comprises the Boardâs report and management discussion and analysis included in the annual report but does not include the Standalone Financial Statements and our report thereon.

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance and/or conclusions thereon.

In connection with our audit of the Standalone Financial Statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the Standalone Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Board of Directors Responsibilities for the Standalone Financial Statements

The Board of Directors are responsible for overseeing the Companyâs financial reporting process.

Auditorâs Responsibilities for the audit of the Standalone Financial Statements

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

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

c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management and the Board of directors.

Report on Other Legal and Regulatory Requirements

2. As required by Section 143 (3) of the Act and based on our audit 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;

d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act;

e) On the basis of the written representations received from the directors as on March 31, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting; and

g) With respect to the other matters to be included in the auditorâs report in accordance with the requirements of section 197(16) of the Act, as amended, we report that in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. The remuneration paid to the director by the company is in excess of the limit laid down under Section 197 of the Act, where request approval is taken in the general meeting. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us;

i. The Company has disclosed the impact of pending litigations as at March 31, 2024 on its financial position in its Standalone Financial Statements -Refer note 38 to the Standalone Financial Statements.

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

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

iv. (a) The Management has represented that, to the

best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned

or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

v. During the year Company has not declared/ paid any dividend hence reporting under rule 11 (f) is not applicable to that extent.

vi. Based on our examination which included test checks, except for the instances mentioned below, the company has used accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit, we did not come across any instance of the audit trail feature being tampered with.

The feature of the recording audit trail (edit log) facility was not enabled at the database level to log any direct data changes for the accounting software used for maintaining the books of account.

As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable from April 1, 2023, reporting under Rule 11 (g) of the Companies (Audit and Auditors) Rules, 2014 on the preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31, 2024.

SHARP & TANNAN ASSOCIATES Chartered Accountants Firmâs Registration No.: 0109983W by the hand of

CA Parthiv S Desai Partner

Membership No.: (F) 042624 Mumbai, May 29, 2024 UDIN- 24042624BKFRSS6659

Mar 31, 2023

Forbes & Company Limited

Report on the audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone Financial Statements of Forbes & Company Limited (hereinafter referred as âthe Companyâ), which comprise the Balance sheet as at March 31,2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended and Notes to the Standalone Financial Statements, including a summary of significant accounting policies and other explanatory information (hereinafter collectively referred as the âStandalone Financial Statementsâ).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the Companies Act, 2013 (hereinafter referred as âthe Actâ) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed Under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015 as amended (hereinafter referred as âInd ASâ) and other accounting principles generally accepted in India, of the state of affairs (financial position) of the Company as at March 31, 2023, its profit, other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (hereinafter referred as âSAsâ) specified Under Section 143(10) of the Act. Our responsibilities under those Standards are further described in Auditorâs responsibilities for the audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (hereinafter referred as âICAIâ) together with the ethical requirements that are relevant to our audit

of the Standalone Financial Statements under the provisions of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIâs Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We draw attention to Note 55 of the standalone financial statements in respect of the Scheme of Arrangement approved by the Board of Directors of the Company in their meeting dated 26th September2022, between Forbes & Company Limited (FCL) and Forbes Precision Tools and Machine Parts Limited (FPTL) and their respective shareholders under Section 230 to 232 of the Companies Act, 2013 and other applicable provisions and the rules framed thereunder.

This Scheme is a âScheme of Arrangementâ involving the demerger of the âPrecision Tools Businessâ of the company into Forbes Precision Tools and Machine Parts Limited (FPTL). FPTL has been incorporated on 30th August 2022 as a wholly owned subsidiary of the Company. The Scheme is subject to necessary approvals by the applicable authorities. The appointed date of the Scheme is 1st April 2023 or such other date as may be fixed or approved by NCLT, Mumbai Bench.

Our opinion is not modified in respect of this emphasis matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of the most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report;

No.

Key Audit Matter (KAM)

Auditorâs Response

Assessment of Provisions and Contingent Liabilities (Refer Notes 19A, 19B and 39 to the standalone financial statements)

Our audit procedures included the following:

â¢ Gained an understanding of the process of identification of claims, litigations and contingent liabilities and identified key controls in the process. For selected controls, we have performed tests of controls;

â¢ Obtained the summary of the Companyâs legal and tax cases and assessed managementâs position through discussions with the Legal Counsel, Head of Tax and operational management, on both the probability of success in significant cases and the magnitude of any potential loss;

No.

Key Audit Matter (KAM)

Auditorâs Response

The Company undergoes assessment proceedings and related litigations with direct and indirect tax authorities and with certain other parties. There is a high level of management judgement required in estimating the probable outflow of economic resources and the level of provisioning and/or the disclosures required. The judgement of the management is supported by advice from independent tax and legal consultants, as considered necessary by the management. Any unexpected adverse outcomes could significantly impact the Companyâs reported profit and financial position. We considered this area a key audit matter due to the associated uncertainty of the ultimate outcome and significant management judgement in the assessment.

â¢ Understanding the current status of the direct and indirect tax assessments/ litigations;

â¢ Reading recent orders and/ or communication received from the tax authorities and with certain other parties and management responses to such communication;

â¢ Where relevant, read the most recent available independent tax/legal advice obtained by management and evaluate the grounds presented therein;

â¢ Obtaining written confirmations from the Companyâs legal/ tax consultants (internal/ external) to confirm the status of the assessments as well as had discussions with them as and when required;

â¢ Assessing the adequacy of disclosure in the standalone financial statements.

Based on the above procedures, we did not identify any material exceptions

relating to managementâs assessment of provisions and contingent liabilities.

Revenue recognition for Real Estate Development Activities (Refer Notes 25 and 50 to the standalone financial statements)

Revenue recognition for real estate development activities is considered a key audit matter in view of the involvement of management judgement in establishing the timing of the transfer of control to the customer, the enforceable right to payment for performance completed to date and related disclosures.

In respect of real estate development projects, Revenue is recognised upon transfer of control of residential units to customers for an amount that reflects the consideration the Company expects to receive in exchange for those units. The point of revenue recognition is normally based on the terms as included in the intimation for the unit handover to the customer on completion of the project, after which the contract becomes non-cancellable by the parties.

The Company records revenue at a point in time upon transfer of control of residential units to the customers as per requirements of Ind-AS 115 involves significant judgement by the Management.

Our audit procedures over the recognition of revenue for Real Estate

Development activities included the following:

â¢ Obtaining an understanding and evaluating the design and testing of the effectiveness of key internal financial controls in respect of revenue recognition for real estate development activities;

â¢ Obtaining a listing of contracts with customers from the Management;

â¢ On a sample basis, evaluate the completeness and accuracy of the list of contracts as mentioned above;

â¢ Examining the mathematical accuracy in respect of the amount recognized as revenue in respect of these customer contracts;

â¢ Examining the terms of sales agreements, agreement value and other relevant details to validate revenue recognition during the year;

â¢ Evaluated the adequacy and appropriateness of the disclosures made in the standalone financial statements by the management with respect to revenue from the Real Estate Development Activities.

Based on the audit procedures performed, we did not come across any significant

exceptions regarding revenue recognition regarding real estate development

activities.

Information other than the Standalone Financial Statements and Auditorâs Report thereon (hereinafter referred as âother informationâ)

Our opinion on the Standalone Financial Statements does not cover the other information and we do not express any form of assurance and/or conclusions thereon.

Board of Directorsâ Responsibilities for the Standalone Financial Statements

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

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

The Board of Directors are responsible for overseeing the Companyâs financial reporting process.

Auditorâs Responsibilities for the Audit of the Standalone Financial Statements

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

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

c) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management and the Board of directors.

Materiality is the magnitude of misstatements in the Standalone Financial Statements that, individually or in the aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the Standalone Financial Statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work, and (ii) evaluating the effect of any identified misstatements in the Standalone Financial Statements.

Other Matter: The standalone financial statements of the Company for the year ended 31 March 2022 were audited by the predecessor auditor and had issued unmodified opinion vide report dated May 30, 2022. Our opinion is not modified in respect of this other matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ), issued by the Central Government in terms of Section 143 (11) of the Act, we give in âAnnexure Aâ, a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143 (3) of the Act and based on our audit 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;

d) In our opinion, the aforesaid Standalone Financial Statements comply with the Ind AS specified under Section 133 of the Act;

e) On the basis of the written representations received from the directors as on March 31,2023, taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023, from being appointed as a director in terms of Section 164 (2) of the Act;

f) With respect to the adequacy of the internal financial controls over the financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companyâs internal financial controls over financial reporting; and

g) With respect to the other matters to be included in the auditorâs report in accordance with the requirements of section 197(16) of the Act, as amended, we report that in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) which are required to be commented upon by us.

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

i. The Company has disclosed the impact of pending litigations as at March 31, 2023, on its financial position in its Standalone Financial Statements - Refer notes 19A, 19B and 39 to the Standalone Financial Statements.

ii. The Company has made provision, as required under the applicable law or Ind AS, for material foreseeable losses, if any, on long-term contracts including derivative contracts.

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

iv. (a) The Management has represented that, to the best

of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified

in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement; and

v. The dividend for the previous year, declared and paid by the Company during the year ended 31st March 2023 is in accordance with section 123 of the Act, as applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1,2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31, 2023

Mar 31, 2018

Report on the Standalone Indian Accounting Standards (Ind AS)

Financial Statements

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

Managementâs Responsibility for the Standalone Ind AS Financial Statements

2. The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorsâ Responsibility

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

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

5. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

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

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

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matter

9. The Ind AS financial statements of the Company for the year ended March 31, 2017, were audited by another firm of chartered accountants under the Companies Act, 2013 who, vide their report dated May 25, 2017, expressed an unmodified opinion on those financial statements. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditorâs Report) Order, 2016, issued by the Central Government of India in terms of subsection (11) of section 143 of the Act (âthe Orderâ), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure A.

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

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its standalone Ind AS financial statements - Refer Notes 19A and 39;

ii. The Company has long-term contracts as at March 31, 2018 for which there were no material foreseeable losses. The Company did not have any derivative contracts as at March 31, 2018.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financial statements of Forbes & Company Limited (âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Managementâs Responsibility for Internal Financial Controls

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

Auditorsâ Responsibility

3. Our responsibility is to express an opinion on the Companyâs internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

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

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companyâs internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financial statements

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

Inherent Limitations of Internal Financial Controls with reference to financial statements

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

Opinion

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

Annexure B to Independent Auditorsâ Report

Referred to in paragraph 10 of the Independent Auditorsâ Report of even date to the members of Forbes & Company Limited on the standalone Ind AS financial statements for the year ended March 31, 2018

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

(b) The fixed assets are physically verified by the Management according to a programme designed to cover all the items once in two years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, all fixed assets have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The title deeds of immovable properties, other than self - constructed properties, as disclosed in Notes 5, 6 and 14 on fixed assets to the standalone Ind AS financial statements, are held in the name of the Company, except in respect of the following:

(Rs. in Lakhs)

Particulars	Gross Block (Cost)	Net Block (WDV)	Remarks
Land and building in Mumbai and Delhi	26.88	14.03	Held in the name of Gokak Patel Volkart Limited, 2nd erstwhile name of the Company. (Includes land cost Rs.7.80 Lakhs and WDV - Rs.4.85 Lakhs under âPrepaid Leasehold Assetsâ in Note 14 - Other Assets and investment properties costing Rs.19.08 Lakhs and WDV- Rs.9.18 Lakhs is reflected under Note 6 - Investment Properties).
Freehold land at Chandivali, Mumbai	38.62	38.62	Held in the name of âForbes Forbes Campbell & Co. Limitedâ, an entity that was merged with Gokak Patel Volkart Limited (the Companyâs 2nd erstwhile name). Cost/ WDV aggregating Rs.38.62 Lakhs has been included in Note 5 - Property, Plant and Equipment.
Lease rights for land and self-constructed building at Fort, Mumbai in the possession of Company	1,129.42	490.64	The property is the name of Forbes Forbes Campbell & Co. Limited and the Company has made an application for renewal of lease, for which approval is awaited from authorities. Building cost - Rs.976.95 Lakhs and WDV - Rs.424.41 Lakhs reflected under Note 6 - Investment Properties and Building costing Rs.152.47 Lakhs and WDV - Rs.66.23 Lakhs as reflected in Note 5 - Property, Plant and Equipment.
Land, factory building and office premises at Mumbai, Thane, Ahmedabad, Bangalore and Chennai	1,624.96	1,565.54	These premises are in the name of Forbes Gokak Limited, the 3rd erstwhile name of the Company. Includes Building cost - Rs.7.92 Lakhs and WDV - Rs.4.38 Lakhs classified under Note 5 - Property, Plant and Equipment, investment properties costing Rs.1,615.38 Lakhs, WDV -Rs.1,560.44 Lakhs included in Note 6 and cost of Rs.1.65 Lakhs, WDV - Rs.0.72 Lakhs under âPrepaid Leasehold Assetsâ in Note 14 - Other Assets).
Premises at Chennai	40.76		This investment property is in the name of Facit Asia Limited, an entity merged with FAL Industries Limited (this entity was subsequently merged with Forbes Gokak Limited, the Companyâs 3rd erstwhile name).
Premises at Tuticorin	27.36	13.60	This investment property is in the name of Volkart India Limited, an entity that was merged with Patel Volkart Limited (which was subsequently amalgamated with the Gokak Mills Limited, the Companyâs 1st erstwhile name).

ii. The physical verification of inventory (excluding stocks with third parties and real estate work-in-progress) have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory by Management as compared to book records were not material. Further, in respect of real estate work-in-progress, inventories comprising of expenditure incurred on acquisition of development rights and other expenditure on construction and development thereof have been physically verified by the Management during the year.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 (âthe Actâ). Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the Order are not applicable to the Company.

iv. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of the loans and investments made, and guarantees and security provided by it.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products.

We have broadly reviewed the same, 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 determine whether they are accurate or complete.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of income taxes, though there has been a slight delay in few cases, and is regular in depositing undisputed statutory dues, including provident fund, employeesâ state insurance, sales tax, income tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods and service tax which have not been deposited on account of any dispute. The particulars of dues of income tax, sales tax, service tax, duty of customs, duty of excise duty and value added tax as at March 31, 2018, which have not been deposited on account of a dispute, are as follows:

Name of the statute	Nature of dues	Amount (Rs. in Lakhs)	Period to which the amount relates	Forum where the dispute is pending
The Income Tax Act, 1961	Income Tax	14.97	Financial Year 2000-01	Commissioner of Income Tax (Appeals)
The Finance Act, 1994	Service Tax	732.68	Financial Years 2006-07 to 2012-13	Commissioner of Service Tax
The Customs Act, 1962	Penalty	0.93	Financial Year 2012-13	Customs Excise and Service Tax Appellate Tribunal
The Customs Act, 1962	Penalty	100.00	Financial Year 2011-12	High Court of Kerala
The Central Excise Act, 1944	Excise Duty (including interest and penalty, as applicable)	2,722.90	Financial Years 2005-06 to 2006-07	Customs Excise & Service Tax Appellate Tribunal
		20.67	Financial Years 2003-04 to 2004-05	Commissioner of Central Excise (Appeals)
		24.71	Financial years 2005-06 to 2014-15	Deputy Commissioner of Central Excise
		4.86	Financial Years 2000-01 to 2004-05	Assistant Commissioner of Central Excise
Sales Tax Laws	Sales Tax (including interest and penalty, as applicable)	91.62	Financial Years 1990-91 to 1994-95, 1998-99, 2001-02 to 2002-03	Sales Tax Appellate Tribunal
		55.42	Financial Years 2005-06, 2008-09 to 2009-10 and 2012-13	Joint Commissioner of Appeals Sales Tax
		172.75	Financial Years 2000-01 to 2005-06	Assistant Commissioner of Commercial Taxes
		65.23	Financial Years 1993-94, 1997-98 1999-00, 2002-03, 2005-06 to 2006-07	Deputy Commissioner of Appeals
		3.95	Financial Year 2004-05	Commercial Tax Officer

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the Balance Sheet date.

ix. In our opinion, and according to the information and explanations given to us, the money raised by way of term loans have been applied on an accrual basis for the purpose for which they were obtained. As the Company has not raised any money by way of initial public offer and further public offer (including debt instruments), the provisions of Clause 3(ix) of the Order, to that extent, are not applicable to the Company.

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

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

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the Ind AS financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016

Chartered Accountants

Sarah George

Place: Mumbai Partner

Date: May 28, 2018 Membership Number: 045255

Mar 31, 2017

TO THE MEMBERS OF FORBES & COMPANY LIMITED

Report on the standalone Ind AS financial statements

We have audited the accompanying standalone Ind AS financial statements of FORBES & COMPANY LIMITED (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s responsibility for the standalone Ind AS financial statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s responsibility

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

In conducting 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 of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on other legal and regulatory requirements

1. We draw attention to Note 47(b) to the standalone Ind AS financial statements relating to loans given to The Svadeshi Mills Company Limited, aggregating Rs. 4,391.78 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under section 143(1)(a) of the Act.

2. As required by section 143(3) of the Act, based on our audit we report, to the extent applicable that:

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

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

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure âAâ. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 40 to the standalone Ind AS financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 19B to the standalone Ind AS financial statements;

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

iv. The Company has provided requisite disclosures in the standalone Ind AS financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated November 8, 2016 of the Ministry of Finance, during the period from November 8, 2016 to December 30, 2016. Based on audit procedures performed and the representations provided to us by the management, we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the management - Refer Note 45 to the standalone Ind AS financial statements.

3. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Orderâ) issued by the Central Government in terms of section 143(11) of the Act, we give in âAnnexure Bâ a statement on the matters specified in paragraphs 3 and 4 of the Order.

ANNEXURE âAâ TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in paragraph 2(f) under ''Report on other legal and regulatory requirements'' section of our report of even date to the members of Forbes & Company Limited on the standalone Ind AS financial statements for the year ended March 31, 2017)

Report on the Internal Financial Controls Over Financial Reporting under clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 (âthe Actâ)

We have audited the internal financial controls over financial reporting of Forbes & Company Limited (âthe Companyâ) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management''s responsibility for Internal Financial Controls

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

Auditor''s responsibility

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

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

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

Meaning of Internal Financial Controls Over Financial Reporting

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

Inherent limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by the ICAI.

ANNEXURE âBâ TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in paragraph 3 under ''Report on other legal and regulatory requirements'' section of our report of even date to the members of Forbes & Company Limited on the standalone Ind AS financial statements for the year ended March 31, 2017)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

(b) The property, plant and equipment have not been physically verified by the management during the year. The Company has a system of verifying the fixed assets once in every two years. In our opinion, the frequency of verification is at reasonable intervals.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date, except those in the table below. In respect of immovable properties of land that have been taken on lease and disclosed as prepaid assets in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. Immovable properties of land and buildings whose title deeds have been pledged as security for loans are held in the name of the Company based on the confirmations directly received by us from lenders.

(ii) As explained to us, the inventories were physically verified during the year by the management at reasonable intervals and no material discrepancies were noticed on physical verification.

Further, in our opinion and according to the information and explanations given to us, having regard to the nature of inventory related to the property development activity, the physical verification by way of verification of title deeds, site visits by the management and certification of extent of work completion by competent persons, are at reasonable intervals and no material discrepancies were noticed on physical verification.

Particulars of the land and building	Cost [deemed cost] as at March 31, 2017 (Rs. in lakhs)	Carrying amount as at March 31, 2017 (Rs. in lakhs)	Remarks
Freehold land and building located at Chennai admeasuring 0.538 acres and 6,084 Sq.ft, respectively.	44.34	3.58	The title deeds are in the name of FAL Industries Limited, erstwhile Company that was merged with the Company under section 391 to 394 of the Companies Act, 1956 in terms of the approval of the Honourable High Court of Judicature at Bombay.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act.

(iv) The Company has not granted any loans, made investments or provided guarantees to which provisions of sections 185 and 186 of the Act apply, and hence, reporting under clause (iv) of the Order is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. In respect of unclaimed deposits, the Company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014, as amended. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act for the Engineering Division and the Property Development Division. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under section 148(1) of Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues in arrears as at March 31, 2017 for a period of more than six months from the date they became payable.

(c) Details of dues of income-tax, sales tax, service tax, customs duty, excise duty, and, value added tax which have not been deposited as on March 31, 2017 on account of disputes are given below:

Name of statute	Nature of dues	Forum where dispute is pending	Period to which the amount relates	Amount involved (Rs. in lakhs)	Amount unpaid (Rs. in lakhs)
Income-Tax Act, 1961	Income-Tax	Income-Tax Appellate Tribunal	Financial Years: 200203,2003-04, 2004-05	231.41	98.91
Income-Tax Act, 1961	Income-Tax	Commissioner of Income-Tax (Appeals)	Financial Years: 199798,2000-01, 2012-13	145.62	118.04
The Central Excise Act, 1944	Excise Duty (including interest and penalty)	Custom Excise & Service Tax Appellate Tribunal	Financial Years:1995-96, 1999-00, 2003 to 2007	4,635.88	4,635.88
		Commissioner of Central Excise (Appeals)	December 2003 to December 2004	27.55	20.67
		Additional Commissioner of Central Excise	Financial Years: 1999-00 to 2002-03	54.99	54.99
		Deputy Commissioner of Central Excise	Financial Years: 2005-06 to 2014-15	24.71	24.71
		Assistant Commissioner of Central Excise	Financial Years: 1999-2002 to 2003-04	5.86	4.86
The Finance Act, 1994	Service Tax	Commissioner of Service Tax	Financial Years: 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13	732.68	732.68
The Customs Act, 1962	Penalty	Commissioner (Appeals)	Financial Year: 2012-13	1.00	0.93
The Customs Act, 1962	Penalty	Custom Excise & Service Tax Appellate Tribunal	Financial Year: 2011-12	100.00	100.00
Karnataka Tax on Entry of Goods, 1979	Entry Tax	Custom Excise & Service Tax Appellate Tribunal	Financial Years: 2001-02, 2002-03, 2003-04, 2004-05, 2006-07, 2007-08, 2008-09	76.90	38.45

Sales Tax Laws	Sales Tax (including interest and penalty)	Sales Tax Appellate Tribunal	Financial Years: 199091,1991-92, 1992-93,199394, 1994-95,1998-99, 200102, 2002-03	122.28	91.62
		Joint Commissioner of Appeals Sales Tax	Financial Years: 2005-06, 2008-09, 2009-10	45.43	32.71
		Assistant Commissioner of Commercial Taxes	Financial Years: 2000-01, 2001-02, 2002-03, 2003-04, 2004-05, 2005-06	172.75	172.75
		Deputy Commissioner of Appeals	Financial Years: 1987-88, 1993-94, 1999-00, 2002-03, 2005-06, 2006-07	66.36	65.23
		Commercial Tax Officer	Financial Years: 2004-05	3.95	3.95

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and dues to debenture holders. The Company has not taken any loans or borrowings from government.

(ix) During the year, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us, the Company has utilized the money raised by way of term loans during the year for the purposes for which they were raised.

(x) 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 by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence, reporting under clause (xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with sections 188 and 177 of the Act, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence, reporting under clause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year, the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company or persons connected with them and hence, provisions of section 192 of the Act are not applicable.

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

For Deloitte Haskins & Sells LLP

Chartered Accountants

Firm''s Registration No.117366W/W-100018

Nilesh Shah

Partner

Membership No. 49660

MUMBAI, May 25, 2017

Mar 31, 2016

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

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) ofthe Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards prescribed under section 133 ofthe Act, as applicable.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness ofthe accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder and the Order under section 143(11) of the Act.

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

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

1. We draw attention to Note 50 to the standalone financial statements relating to loans given to The Svadeshi Mills Company Limited, aggregating Rs.4,391.78 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under section 143(1)(a) oftheAct.

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 the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards prescribed under section 133 ofthe Act, as applicable.

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

f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 29 to the standalone financial statements;

ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 41B to the standalone financial statements;

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

3. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government in terms of section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

ANNEXURE "B" TO THE INDEPENDENT AUDITOR''S REPORT

(Referred to in paragraph 3 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date to the members of Forbes & Company Limited on the standalone financial statements for the year ended March 31, 2016)

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. According to the information and explanation given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date, except those in the table below. In respect of immovable properties of land that have been taken on lease and disclosed as fixed asset in the financial statements, the lease agreements are in the name of the Company, where the Company is the lessee in the agreement. Immovable properties of land and buildings whose title deeds have been pledged as security for loans are held in the name of the Company based on the confirmations directly received by us from lenders.

Particulars Amount Remarks of the land (Rs. in lakhs) and building [Carrying amount as at March 31, 2016]

Freehold land and 44.34 The title deeds are in the name of building located at Fal Industries Limited, erstwhile Chennai admeasuring Company that was merged with 0.538 acres and 6,084 the Company under Section 391 Sq.ft, respectively. to 394 of the Companies Act, 1956 in terms of the approval of the Honorable High Court of judicature at Bombay.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

Further, in our opinion and according to the information and explanations given to us, having regard to the nature of inventory related to the property development activity, the physical verification by way of verification of title deeds, site visits by the Management and certification of extent of work completion by competent persons, are at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act.

(iv) The Company has not granted any loans, made investments or provided guarantees to which provisions of sections 185 and 186 of the Act, and hence, reporting under clause (iv) of the Order is not applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year. In respect of unclaimed deposits, the Company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014, as amended. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Act for the Engineering Division and the Property Development Division. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under section 148(1) of Act, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues in arrears as at March 31, 2016 for a period of more than six months from the date they became payable, except as disclosed below.

Name of statute Nature of dues Amount involved Period to which the amount relates Due date

('' in Lakhs)

Mumbai Municipal Corporation Act, 1988 Property Tax 30.51 April 1, 2013 to March 31, 2015 Various

(c) Details of dues of income-tax, sales tax, service tax, customs duty, excise duty, and, value added tax which have not been deposited as on March 31, 2016 on account of disputes are given below:

Name of Statute Nature of dues Forum where dispute is pending

Income-Tax Act, Income-Tax Income-Tax Appellate Tribunal 1961

Commissioner of Income-Tax (Appeals)

The Central Excise Excise Duty Custom Excise & Service Tax Act, 1944 (including interest and Appellate Tribunal penalty)

Commissioner of Central Excise (Appeals)

Additional Commissioner of Central Excise.

Assistant Commissioner of Central Excise

Sales Tax Laws Sales Tax (including Madras High Court interest and penalty) Sales Tax Appellate Tribunal

Joint Commissioner of Appeals Sales Tax

Assistant Commissioner of Commercial Taxes

Deputy Commissioner of Appeals

Commercial Tax Officer

The Finance Act, Service Tax Commissioner of Service Tax 1994

The Customs Act, Penalty Commissioner (Appeals) 1962

Custom Excise & Service Tax Appellate Tribunal

Karnataka Tax on Entry Tax Custom Excise & Service Tax Entry of Goods, Appellate Tribunal 1979

Wealth Tax Act, Wealth Tax Commissioner of Income Tax 1957 (Appeals)

Mumbai Municipal Property Tax Assistant Assessor and Collector Corporation Act, 1888*

Name of Statute Period to which Amount Amount the amount relates involved unpaid (Rs. In Lakhs) (Rs. In Lakhs)

Income Tax Act,1961 Financial Years: 398.07 144.66 2002-03, 2003-04,and 2004-05

Financial Years: 229.22 201.64 1997-98, 2000-01 and 2012-13

The Central Excise Act,1944 Financial Years: 4,635.88 4,635.88 1995-96, 1999-00, 2003 to 2007.

December 2003 to December 58.90 30.54 2004 and November 2006 to February 2007, 2010-11, April 2011 to September 2012

Financial Years: 54.99 54.99 2000 to 2003

Financial Years: 5.86 4.86 2000 to 2004

Sales Tax Laws Financial Years: 474.38 435.09 1989-90, 1998-99 and 1999-00

Financial Years: 133.38 91.62 1990-91,1991-92, 1992-93, 1993-94, 1994-95,1998-99, 2001-02 and 2002-03

Financial Years: 7,287.90 1,304.03 2005-06,2006-07, 2008-09, 2009-10 and 2010-11.

Financial Years: 172.75 172.75 2000-01, 2001-02, 2002-03, 2003-04, 2004-05 and 2005-06.

Financial Years: 66.36 65.23 1987-88, 1993-94, 1999-00, 2002-03, 2005-06 and 2006-07

Financial Years: 3.95 3.95 2004-05

The Finance Act,1994 Financial Years: 688.38 688.38 2007-08, 2008-09, 2009-10, 2010-11, 2011-12 and 2012-13

The Customs Act,1962 Financial Year: 1.00 0.93 2012-13

August, 2012 1.00 0.90

Karnataka Tax on Entry of Goods, 1979 Financial Years: 76.90 38.45 2001-02, 2002-03, 2003-04, 2004-05, 2006-07, 2007-08, 2008-09

Wealth Tax Act,1957 Financial Years: 2007-08, 409.86 394.92 2008-09, 2009-10 and 2010-11

Mumbai Municipal Corporation Act,1888 Financial Years: 671.60 671.60 2005-06, 2006-07, 2007-08, 2008-09, 2009-10

* Property tax not deposited pending resolution of the representation made by the Company to the Assistant Assessor and Collector, Municipal Corporation of Greater Mumbai against the enhanced rateable value assessed by the said authority.

(viii)In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to financial institutions, banks and dues to debenture holders. The Company has not taken any loans or borrowings from government.

(ix) During the year, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence, reporting under clause (ix) ofthe Order is not applicable.

(x) 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 by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid / provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence, reporting under clause (xii) of the Order is not applicable.

(xiii)In our opinion and according to the information and explanations given to us, the Company is in compliance with sections 188 and 177 of the Act, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv)During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence, reporting under clause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year, the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence, provisions of section 192 of the Act are not applicable.

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

For Deloitte Haskins & Sells LLP

Chartered Accountants

(Firm''s Registration No.117366W/W-100018)

Nilesh Shah

(Partner)

(Membership No. 49660)

MUMBAI, May 30, 2016

Mar 31, 2015

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

Management's Responsibility for the Standalone Financial Statements

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

Auditors' Responsibility

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

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

5. 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 standalone financial statements are free from material misstatement.

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

8. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

9. We draw attention to Note 49 to the standalone financial statements relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,756.77 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 143(1)(a) of the Act.

10. 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 the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements - Refer Note 29 to the standalone financial statements;

ii. The Company has made provision, as required under the applicable accounting standards, for material foreseeable losses, on long-term contracts including derivative contracts - Refer Note 40B to the standalone financial statements;

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

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 8 under "Report on Other Legal and Regulatory Requirements" section of our report of even date to the members of Forbes & Company Limited on the standalone financial statements for the year ended March 31, 2015)

1. 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) The fixed assets have not been physically verified by the Management during the year but the Company has a system of verifying the fixed assets once in every two years. In our opinion, the frequency of verification is at reasonable intervals.

2. In respect of its inventories:

(a) As explained to us, the inventories were 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 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 generally maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

3. 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 Act and accordingly the sub-clauses (a), and (b) of clause (iii) of the Order are not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, the internal control system is generally commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit,we have not observed any major weakness in such internal control system.

5. According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014,as amended. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

6. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 as amended and prescribed by the Central Government under Section 148(1) of the Act and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7. According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax,value added tax, customs duty, excise duty, cess and any other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of provident fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, value added tax, customs duty, excise duty, cess and other material statutory dues in arrears, as at March 31,2015 for a period of more than six months from the date they became payable, except as disclosed below.

Name of Nature of Amount Period to Due date statute dues involved which the (Rs. in amount Lakhs) relates

Mumbai Property 10.45 October 1, 2012 December Municipal Tax to March 31, 2013 31, 2012 Corporation Act, 1888 10.45 April 1, 2013 to September September 30, 2013 13, 2013

10.45 October 1, 2013 December to March 31, 2014 31, 2013

(c) Details of dues of income tax, sales tax, wealth tax, service tax, customs duty, excise duty, value added tax and cess which have not been deposited as on March 31,2015 on account of disputes are given below:

Name of Statute Nature of dues

Income-Tax Act, Income-Tax 1961

The Central Excise Excise Duty Act, 1944 (including interest and penalty)

Sales Tax Laws Sales Tax (including interest and penalty)

The Finance Act, Service Tax 1994

The Customs Act, Customs duty (including 1962 penalty)

Karnataka Tax on Entry Tax Entry of Goods, 1979

Mumbai Municipal Property Tax Corporation Act, 1888*

Name of Statute Forum where dispute is pending

Income-Tax Act, Income-Tax Appellate Tribunal 1961

Commissioner of Income-Tax (Appeals)

The Central Excise Additional Commissioner of Central Excise Act, 1944 Custom Excise & Service Tax Appellate Tribunal, New Delhi Custom Excise & Service Tax Appellate Tribunal, Chennai

Custom Excise & Service Tax Appellate Tribunal, Mumbai

Assistant Commissioner of Central Excise Commissioner of Central Excise, Chennai

Commissioner of Central Excise, Mumbai-II

Commissioner of Central Excise, Mumbai-II

Sales Tax Laws Commercial Tax Officer, Chennai Madras High Court

Sales Tax Appellate Tribunal, Cuttack

Sales Tax Appellate Tribunal, Patna

Joint Commissioner of Appeals Sales Tax, Delhi

Joint Commissioner of Appeals Sales Tax, Ahmedabad

Joint Commissioner of Appeals Sales Tax, Kolkata

Joint Commissioner of Appeals Sales Tax, Bangalore

Deputy Commissioner of Appeals, Mumbai

Deputy Commissioner of Appeals, Kolkata

Deputy Commissioner of Appeals, New Delhi

Sales Tax Appellate Tribunal, Mumbai

Asst. Commissioner of (CT) Thiruvanmiyar Assessment Circle

Joint Commissioner of Sales Tax (Appeals), Mumbai

The Finance Act, Commissioner of Service Tax - I, Mumbai 1994

The Customs Act, Commissioner (Appeals), Chandigarh 1962 Custom Excise & Service Tax Appellate Tribunal, Ahmedabad

Karnataka Tax on Karnataka Appellate Tribunal Entry of Goods, 1979

Mumbai Municipal Assistant Assessor and Collector Corporation Act, 1888*

Name of Statute Period to which the amount Amount relates involved (Rs. In Lakhs)

Income-Tax Act, Financial Years: 144.66 1961 2002-03 and 2004-05

Financial Years: 2,644.50 1997- 98; 2000-01 and 2011-12

The Central Excise Financial Years: 2000 to 2003 54.99 Act, 1944 Financial Years: 2003 to 2007 4,624.87

Financial Years: 1995-96 9.38

Financial Years: 1999-00 1.63

Financial Years: 2000 to 2004 4.86

December 2003 to December 21.53 2004 and November 2006 to February 2007

Financial Years: 2010-2011 6.25

April 2011 to September 2012 2.76

Sales Tax Laws Financial Years: 2004-05 3.95

Financial Years: 1989-90, 435.08 1998-99, 1999-00

Financial Years: 1992-93 3.76

Financial Years:1990-91 to 45.66 1993-94

Financial Years: 15.64 2008-09 to 2010-11

Financial Years: 2008-09 1.52

Financial Years: 2009-10 12.72

Financial Years: 2005-06 2.82

Financial Years: 1993-94, 41.50 1999-00

Financial Years: 23.29 2002-03, 2005-06 to 2006-07

Financial Years: 1987-88 0.44

Financial Years: 1994-95, 42.20 1998- 99, 2001-02 to 2002-03

Financial Years: 172.75 2000-01 to 2005-06

Financial Years: 2008-09 1,271.33

The Finance Act, Financial Years: 2007-08 to 688.38 1994 2012- 13

The Customs Act, Financial Years: 2012-13 0.93 1962 Financial Years: 2012-13 0.90

Karnataka Tax on Financial Years: 2001-02 to 38.45 Entry of Goods, 2008-09 1979

Mumbai Municipal Financial Years: 2005-06 to 671.60 Corporation Act, 2009-10 1888*

* Property tax not deposited pending resolution of the representation made by the Company to the Assistant Assessor and Collector, Municipal Corporation of Greater Mumbai against the enhanced rateable value assessed by the said authority.

(d) The Company has been regular in transferring amounts to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and Rules made thereunder within time.

8. The accumulated losses of the Company as at the end of the financial year are less than fifty percent of its net worth and the Company has not incurred cash losses during the financial year covered by our audit and has incurred cash losses in the immediately preceding financial year.

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

10. In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

11. In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

12. 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 Deloitte Haskins & Sells LLP Chartered Accountants (Firm's Registration No. 117366W/W-100018)

Nilesh Shah Partner (Membership No.49660)

MUMBAI, May 26, 2015

Mar 31, 2014

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 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.

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 in terms of Section 227(4A) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. We draw attention to Note 50 to the financial statements relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,756.77 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 227(1A)(a) of the Companies Act, 1956.

3. As required under provisions of 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

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

(i) Having regard to the nature of the Company''s business / activities results during the year, clauses (xii), (xiii), (xiv), (xviii) and (xx) of paragraph 4 of the Order are not applicable.

(ii) In respect of its fixed assets:

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

(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a programme of verification, 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.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, the inventories were 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 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 generally maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, the internal control system is generally commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Such transactions in excess of Rs. 5 Lakhs are only in respect of reimbursement of expenses where the question of comparision with prevalent market prices at the relevant time does not arise.

(vii) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

(viii) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(ix) 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, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(x) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable except as disclosed below

Name Nature Amount Period to Due Date of of Involved which the Statute Dues ( Rs. in Amount Lakhs) Relates

Muncipal Property 10.45 1-April- 13th Corporation Tax 2013 to September, of Greater 30-September- 2013 Mumbai 2013

(c) Details of statutory dues that have not been deposited as at 31st March, 2014 on account of disputes which relate to Income Tax, Sales Tax, Wealth Tax, Excise Duty, Service tax and other material statutory dues (being property tax) are given below:

Statute Nature of dues Forum where dispute is pending Period to which the amount Amount relates (Rs. In Lakhs)

Income- Tax Act, Income-Tax Income-Tax Appellate Tribunal Assessment Years :- 144.66 1961 2003-04 to 2005-06

Commissioner of Income-Tax (Appeals) Assessment Years :- 118.04 1998-99 and 2001-02

Sales Tax Laws Sales Tax (including Commercial Tax Officer, Chennai 2004-05 3.95 interest and penalty) Madras High Court 1989-90, 1998-99, 1999-00 435.08

Sales Tax Appellate Tribunal, Cuttak 1992-93 3.76

Sales Tax Appellate Tribunal, Patna 1990-91 to 1993-94 45.66

Joint Commissioner of Appeal Sales Tax, Delhi 2008-09 to 2010-11 17.30

Joint Commissioner of Appeal Sales Tax, 2008-09 1.52 Ahmedabad

Joint Commissioner of Appeal Sales Tax, 2009-10 12.72 Kolkata

Joint Commissioner of Appeal Sales Tax, 2005-06 2.82 Bangalore

Deputy Commissioner of Appeals, Mumbai 1993-94, 1999-00 41.50

Deputy Commissioner of Appeals, Kolkata 2002-03, 2005-06 to 2006-07 23.29

Deputy Commissioner of Appeals, New Delhi 1987-88 0.44

Sales Tax Appellate Tribunal, Mumbai 1994-95,1998-99, 2001-02 to 42.20

2002-03

Asst. Commissioner of (CT) Thiruvanmiyar 2000-01 to 2005-06 172.75 Assessment Circle

The Central Excise Excise Duty Additional Commissioner of Central Excise 2000 to 2003 54.99 Act, 1944 (including interest and Custom Excise & Service Tax Appellate 2003 to 2007 4,624.87 penalty) Tribunal, New Delhi

Custom Excise & Service Tax Appellate 1995-96 9.38 Tribunal, Chennai

Custom Excise & Service Tax Appellate 1999-00 1.63 Tribunal, Mumbai

Assistant Commissioner of Central Excise 2000 to 2004 4.86

Commissioner of Central Excise, Chennai December 2003 to December 21.53 2004 and November 2006 to February 2007

Commissioner of Central Excise, Mumbai-II 2010-2011 6.25

The Finance Act, Service Tax Commissioner of Service Tax - I, Mumbai 2007-08 to 2012- 13 688.90

1994 Commissioner of Central excise, Aurangabad October 2009 to September 2.11 2011

Karnataka Tax on Entry Tax Karnataka Appellate Tribunal 2001-02 to 2008-09 38.45 Entry of Goods, 1979

Muncipal Property Tax Assistant Assessor & Collector, 2005-06 to 2009-10 671.60 Corpora tion of Greater Mumbai*

* Property tax not deposited pending resolution of the representation made by the Company to the Assistant Assessor & Collector, Municipal Corporation of Greater Mumbai against the enhanced ratable value assessed by the said authority.

(xi) The accumulated losses of the Company at the end of the financial year are less than fifty per cent of its net worth and the Company has incurred cash losses during the financial year covered by our audit but has not incurred cash losses in the immediately preceding financial year.

(xii) 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, banks and debenture holders.

(xiii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company.

(xiv) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained, other than temporary deployment pending application.

(xv) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet of the Company, we report that funds raised on short-term basis aggregating approximately Rs. 211.08 lakhs have been used for long-term investments.

(xvi) According to the information and explanations given to us, the Company has created security in respect of debentures issued.

(xvii) T o 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 DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm''s Registration No. 117366W/W-100018)

Rajesh K. Hiranandani

Partner

(Membership No.36920)

MUMBAI, 27th May, 2014

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of FORBES & COMPANY LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, 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 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 profit of the Company for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

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

2. We draw attention to Note 49 to the financial statements relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,756.77 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 227(1A)(a) of the Companies Act, 1956.

3. As required under provisions of 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

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

(e) On the basis of the written representations received from the directors as on 31st March, 2013 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 Section 274(1) (g) of the Act.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

i. Having regard to the nature of the Company''s business / activities / results during the year, clauses (xii), (xiii), (xiv), (xv), (xviii) and (xx) of paragraph 4 of the Order are not applicable.

ii. In respect of its fixed assets:

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

(b) Some of the fixed assets were physically verified during the year by the Management in accordance with a programme of verification, 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.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

iii. In respect of its inventories:

(a) As explained to us, the inventories were 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 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 generally maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

iv. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

v. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, the internal control system is generally commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

vi. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Such transactions in excess of Rs. 5 Lakhs are only in respect of reimbursement of expenses where the question of comparison with prevalent market prices at the relevant time does not arise.

vii. According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

viii. In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

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

x. According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Customs Duty, Excise Duty and other material statutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable except for the following:

Name of the Statute Nature Amount (Rs. In Lakhs) Due Date

The Bombay Labour Welfare Fund Act, 1953 Unpaid Wages and Bonus 0.38 Prior to 31st December 2009

(c) Details of statutory dues that have not been deposited as at 31st March, 2013 on account of disputes which relate to Income Tax, Sales Tax, Wealth Tax, Excise Duty and Service tax are given below:

Statute Nature of dues Forum where dispute is pending Period to which the amount Amount relates (Rs. In Lakhs)

Income- Tax Act, Income-Tax Income-Tax Appellate Tribunal Assessment Years:- 562.88 1961 1989-90, 1997-98, 2004-05 to 2006-07

Commissioner of Income- Tax Assessment Years:- 505.51 (Appeals) 1991-92, 1992-93, 1998-99, 2001-02, 2007-08, 2008-09

Wealth Tax Act, Wealth Tax Commissioner of Wealth Tax Assessment Years:- 19.74 1957 (Appeals) 1996-97 to 2000-01

The aforesaid dues exclude property tax of Rs. 551.60 Lakhs not deposited pending resolution of the representation made by the Company to the Assistant Assessor & Collector, Municipal Corporation of Greater Mumbai against the enhanced ratable value assessed by the said authority.

xi. The accumulated losses i.e. deficit in the statement of profit and loss of the Company as at the end of the financial year, deducted from the Reserves and Surplus, are less than fifty per cent of its net worth and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

xii. 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, banks and debenture holders.

xiii. In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

xiv. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have, prima facie, not been used during the year for long-term investment.

xv. According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 60 debentures of Rs. 100 Lakhs each and 400 debentures of Rs. 10 Lakhs each. The Company has created security in respect of the debentures issued.

xvi. 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 DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 117366W)

Rajesh K Hiranandani

Partner

MUMBAI, 28th May, 2013 (Membership No. 36920)

Mar 31, 2012

1. We have audited the attached Balance Sheet of FORBES & COMPANY LIMITED ("the Company") as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. 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 the 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 a reasonable basis for our opinion.

3. Attention is invited to Note 50 to the financial statements relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,756.77 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 227(1A)(a) of the Companies Act, 1956.

4. Without qualifying our opinion, we draw attention to Note 39 to the financial statements regarding provision not having been made in the previous year for the loss of Rs. 513.33 lakhs, materialised during the period 1st April, 2011 to 30th June, 2011, by way of charge to the Statement of Profit and Loss for that year, arising out of a commitment made by the Company pursuant to a standby charter agreement entered with SCI Forbes Limited (SFL), a joint venture entity, to charter vessels from SFL, at charter-hire charges specified in the aforesaid agreement, in the event the vessels are not on charter with a lender approved third party. This matter was referred to in our audit report on the financial statements for the previous year as a subject matter of qualification. During the current year, with effect from 1st July, 2011, the aforesaid standby charter agreement has been suspended. Had the provision, as aforesaid, been made in the previous year, the profit for the current year ended 31st March, 2012 would have been higher by Rs. 513.33 lakhs; however, this has no impact on the Reserves and Surplus as at 31st March, 2012.

5. Without qualifying our opinion, we draw attention to Note 51 to the financial statements regarding no provision for diminution having been made on the Company's investments in equity shares and preference shares aggregating Rs. 7,090 Lakhs in its Joint Venture Company, viz. SCI Forbes Limited, held as non-current, for the reasons stated in the said Note.

6. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

7. The financial statements are subject to adjustments that may arise on completion of detailed review and reconciliation, by the Management, of account balances of trade payables and other current liabilities aggregating Rs. 2,386.15 lakhs and, trade receivables, long-term / short- term loans & advances and other current assets aggregating Rs. 1,321.48 lakhs, relating to the Company's Shipping and Logistics segment, the effect of which could not be determined on the profit for the year and the reserves and surplus as at the year end. Our audit report for the year ended 31st March, 2011 contained a similar qualification. [See Note 52 to the financial statements].

8. Further to our comments in the Annexure referred to in paragraph 6 above and read with paragraphs 3 to 5 above, we report that:

(i) subject to the matter stated in paragraph 7 above, 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) subject to the matter stated in paragraph 7 above, 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, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) in our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(v) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and subject to the matter stated in paragraph 7 above, 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, 2012;

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

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

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

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 6 of our report of even date)

(i) Having regard to the nature of the Company's business/activities/result, clauses (xii), (xiii), (xiv), (xv), (xviii), (xix) and (xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by a firm of Chartered Accountants appointed by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. As explained to us, the discrepancies noticed on verification between the physical assets and book records were material and appropriately dealt with in the books of account.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventories:

(a) As explained to us, the inventories were 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 were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company has generally maintained proper records of its inventories and the discrepancies noticed on physical verification, as identified by the Management and according to the information and explanations given to us, are not considered to be material taking into account the nature of the Company's business.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, the internal control system is generally commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Such transactions in excess of Rs. 5 Lakhs are only in respect of professional fees, where, having regard to the explanations that such service is of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, we are unable to comment whether the transaction was made at the prevailing market price at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposits from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

(viii) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

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

(x) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and other material statutory dues applicable to it with the appropriate authorities except in case of Tax Deducted at Source and Service tax relating to the Company's shipping and logistics segment, wherein the Company is generally not regular in depositing dues with the appropriate authorities and there have been substantial delays.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty and other material statutory dues in arrears as at 31st March, 2012 for a period of more than six months from the date they became payable except for the following:

Name of the Statute Nature Amount (Rs. in Lakhs) Due Date

The Bombay Labour Welfare Fund Act 1953 Unpaid Wages and Bonus 1.57 Prior to 1st April 2009

(c) Details of dues of Income Tax, Sales Tax, Wealth Tax and Excise Duty which have not been deposited as at 31st March, 2012 on account of disputes, are given below:

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

Income-Tax Act, 1961 Income-Tax Income-Tax Appellate Assessment Years :- 520.68 Tribunal 1989-90, 1997-98,

2003-04 to 2005-06

Commissioner of Income- Assessment Years :- 701.02 Tax (Appeals) 1990-91 to 1993-94,

1995-96, 1998-99,

2001-02,2002-03, 2005- 06 to 2008-09

Wealth Tax Act, 1957 Wealth Tax Commissioner of Wealth Assessment Years :- 19.74

Tax (Appeals) 1996-97 to 2000-01

Sales Tax Laws Sales Tax Commercial Tax Officer, 2004-05 3.95 (including interest Chennai and penalty) Madras High Court 1989-90, 1998-99, 435.08 1999-00

Sales Tax Appellate 1992-93 3.76 Tribunal, Cuttak

Sales Tax Appellate 1990-91 to 1993-94 45.66 Tribunal, Patna

Deputy Commissioner of 1993-94, 1999-00 41.50 Appeals, Mumbai

Deputy Commissioner of 2002-03, 23.29 Appeals, Kolkata 2005-06 to 2006-07

Deputy Commissioner of 1987-88, 2003-04 1.48 Appeals, New Delhi

Sales Tax Appellate 1994-95, 43.88

Tribunal, Mumbai 1997-98 to 2002-03

Asst. Commissioner of 2000-01 to 2005-06 172.75 (CT) Thiruvanmiyar Assessment Circle

The Central Excise Act, Excise Duty Additional Commissioner 2000 to 2003 54.99 1944 (including interest of Central Excise and penalty)

Custom Excise & Service 2003 to 2007 4,624.87 Tax Appellate Tribunal, New Delhi

The Central Excise Act, Excise Duty Custom Excise & Service 1995-96 9.38 1944 (including interest Tax Appellate Tribunal, and penalty) Chennai

Assistant Commissioner 2000 to 2004 6.95 of Central Excise

Commissioner of Central December 2003 to 28.42

Excise, Chennai December 2004 and

November 2006 to

February 2007

Commissioner of Central 2010-2011 6.25 Excise, Mumbai-II

The aforesaid disputed dues exclude property tax of Rs. 1,195.85 Lakhs not deposited pending resolution of the representation made by the Company to the Assistant Assessor & Collector, Municipal Corporation of Greater Mumbai against the enhanced ratable value assessed by the said authority.

(xi) The accumulated losses i.e. deficit in the statement of profit and loss of the Company as at the end of the financial year, deducted from the Reserves and Surplus, are less than fifty per cent of its net worth.

(xii) The Company has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xiii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company has not issued any debentures.

(xiv) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

(xv) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis amounting to Rs. 4,905.18 Lakhs have, prima facie, been used for long-term investments.

(xvi) 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 DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117366W)

Rajesh K Hiranandani

Partner

(Membership No. 36920)

MUMBAI, 29th May, 2012

Mar 31, 2011

1. We have audited the attached Balance Sheet of FORBES & COMPANY LIMITED ("the Company") as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. 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 the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. Attention is invited to Note 16 on Schedule 13 to the accounts relating to loans given to The Svadeshi Mills Company Limited and its subsidiary, Coromandel Garments Limited, aggregating Rs. 4,742.44 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 227(1A)(a) of the Companies Act, 1956. Our report on the financial statements for the year ended 31st March, 2010 contained a similar modification.

4. Without qualifying our opinion, we invite attention to Note 19(2) on Schedule 13 to the accounts relating to managerial remuneration of Rs. 50.33 lakhs paid in excess of the limits specified in Schedule XIII of the Companies Act, 1956 and is subject to the approval of the Central Government. Our report on the financial statements for the year ended 31st March, 2010 contained a similar modification where approval of the Central Government has since been received by the Company.

5. Without qualifying our opinion, we report that transactions for sale of goods and services of a value aggregating Rs. 2.44 lakhs have been entered into, with two private limited companies in which one of the directors of this Company is also a director of those private limited companies, without obtaining previous approval of the Central Government. This is not in compliance with the provisions of Section 297 of the Companies Act, 1956. Our report on the financial statements for the year ended 31st March, 2010 contained a similar modification.

6. As required by the Companies (Auditor's Report) Order, 2003 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

7. Pursuant to standby charter agreements entered with SCI Forbes Limited (SFL), a joint venture entity, the Company and its joint venture partner, Shipping Corporation of India Limited (SCI), together, Promoters, have committed to charter vessels from SFL, at charter-hire charges specified in the aforesaid agreements, in the event the vessels are not on charter with a lender approved third party, until SFL repays its borrowings which is spread over a period of twelve years. As represented to us by the Management, subsequent to the year end, with effect from 1st July, 2011, the aforesaid standby charter agreements have been suspended. In our opinion, as required under Accounting Standard 29, 'Provisions, Contingent Liabilities and Contingent Assets', notified under the Companies Act, 1956, provision for the loss of Rs. 515.97 lakhs materialised during the period 1st April, 2011 to 30th June, 2011, should have been made by way of a charge to the Profit and Loss Account. Our audit report dated 13th August, 2010 on the accounts for the year ended 31st March, 2010 contained a similar qualification wherein we had opined that provision for the loss of Rs. 735.80 lakhs materialised subsequent to 31st March, 2010 and until the date of approval of the accounts by the Board of Directors on the said date should have been made by way of charge to the profit and loss account. Had the provision, as aforesaid, been made in both the years, the profit, before and after tax, would have been higher by Rs. 219.83 lakhs, (2010: the loss, before and after tax, would have been higher by Rs. 735.80 lakhs) and the reserves and surplus would have been lower by Rs. 515.97 lakhs (2010: Rs. 735.80 lakhs) [See Note 17(a) on Schedule 13 to the accounts].

8. The financial statements are subject to adjustments that may arise on completion of detailed review and reconciliation, by the Management, of account balances of sundry creditors / customers' credit balances / advances aggregating Rs. 1,781.67 lakhs; sundry debtors aggregating Rs. 838.62 lakhs and loans and advances aggregating Rs. 953.88 lakhs relating to the Company's Shipping and Logistics segment, the effect of which could not be determined on the profit for the year and the reserves and surplus as at the year end [See Note 17(b) on Schedule 13 to the accounts].

9. Further to our comments in the Annexure referred to in paragraph 6 above and read with paragraphs 3 to 5 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) subject to the matters stated in paragraphs 7 and 8 above, 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, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) subject to the matter stated in paragraph 7 above, in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(v) in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and subject to the matters stated in paragraphs 7 and 8 above, 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.

10. On the basis of the written representations received from the Directors as on 31st March, 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 Section 274(1)(g) of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 6 of our report of even date)

(i) Having regard to the nature of the Company's business/activities/result,clausesviii, xii, xiii, xiv, xv, xviii, xix and xx of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals. As explained to us, the discrepancies noticed on verification between the physical assets and book records were material and appropriately dealt with in the books of account.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

(iii) In respect of its inventory:

(a) As explained to us, the inventories were 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 were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion, the Company has generally maintained proper records of its inventories and the discrepancies noticed on physical verification, as identified by the management and according to the information and explanations given to us, are not considered to be material taking into account the nature of the Company's business.

(iv) The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

(v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, the internal control system is generally commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Such transactions in excess of Rs. 5 lakhs are only in respect of professional fees, where,having regard to the explanations that such service is of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, we are unable to comment whether the transaction was made at the prevailing market price at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. In respect of unclaimed deposits, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956.

(viii) In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business

(ix) According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed 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 and other material statutory dues applicable to it with the appropriate authorities except in case of Tax Deducted at Source relating to the Company's shipping and logistics segment, wherein the Company is generally not regular in depositing dues with the appropriate authorities and there have been substantial delays; arrears of such dues as at the year end aggregate Rs. 7.52 lakhs[See Note 17(c) on Schedule 13 to the accounts].

(b) There were no undisputed amounts payable in respect of Income-Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other

material statutory dues in arrears as at31st March, 2011 for a period of more than six months from the date they became payable except for the following:

Name of the Statute Nature Amount (Rs.in Lakhs) Due Date

The Bombay Labour WelfareFund Act, 1953 Unpaid Wages & Bonus 5.21 Prior to 1st April, 2006

* Rs. 1.27 lakhs paid subsequently

(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, and Excise Duty which have not been deposited as at 31st March, 2011 on account ofdisputes, are given below:

Statute Nature of Dues Forum disputeis pending

Income Tax Act, 1961 Income Tax Income Tax Appellate Tribunal

Commissioner of Income Tax (Appeals)

Wealth Tax Act, 1957 Wealth Tax Commissioner of Wealth Tax (Appeals)

Sales Tax Laws Sales Tax Commercial Tax Officer, (including interest Chennai and penalty)

Madras High Court

Sales Tax Appellate Tribunal, Cuttack

Sales Tax Appellate Tribunal, Patna

Various Appellate Authorities

Asst. Commissioner of (CT) Thiruvanmiyar Assessment Circle

The Central Excise Excise Duty Custom Excise & Act, 1944 Service Tax Appellate Tribunal, Chennai

Additional Commissioner of Central Excise

Custom Excise & Service Tax Appellate Tribunal, New Delhi

Custom Excise & Service Tax Appellate Tribunal, Chennai

Assistant Commissioner of Central Excise

Commission of Central Excise, Chennai

Statue Period to which where Amount the amount relates involved (Rs. In lakhs)

Income Tax Act, 1961 Assessment Years:- 520.68 1989-90,1997-98, 2003-04 to 2005-2006

Assessment Years:- 753.06 1991-92, 1992-93, 1998-99, 2001-02,

2002-03,

2005-06 to 2008-09

Wealth Tax Act,1957 Assessment Years:- 19.74 1996-97 to 2000-01

Sales Tax Laws 2004-05 3.95

1989-90, 1998-99, 474.38 1999-00

1992-93 3.76

1990-91 to 1993-94 45.66

1994 to 2002 110.15

2000-2001 to 222.92 2005-2006

The Central Excise Nov 2002 to June 2003 20.44 Act,1944

2000 to 2003 54.99

2003 to 2007 4,624.87

1995-96 9.38

2000 to 2004 6.95

December 2003 to 28.42

December 2004 and November 2006 to February 2007

The aforesaid disputed dues exclude property tax of Rs. 934.07 lakhs not deposited pending resolution of the representation made by the Company to the Assistant Assessor & Collector, Municipal Corporation of Greater Mumbai against the enhanced ratable value assessed by the said authority.

(x) The Company does not have any accumulated losses as at 31st March 2011, the debit balance in Profit and Loss Account being set-off against uncommitted reserves. The Company has not incurred cash losses in the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks and financial institutions. The Company has not issued any debentures.

(xii) In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

(xiii) In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis amounting to Rs. 4,873.85lakhs have, prima facie, been used for long-term investments.

(xiv) According to the information and explanations given to us, no fraud by the Company or on the Company has been noticed or reported during the year except an instance of fraud on the Company during the year in the nature of payments being made against fictitious invoices at one of the locations of the shipping and logistics segment of the Company. The Company has terminated the employment of the concerned employee. The Management has estimated the amount involved atRs. 33.00 lakhs and recovered the same from the perpetrators of the fraud.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Registration No. 117366W)

Rajesh K Hiranandani

Partner MUMBAI, 19th July, 2011 (Membership No. 36920)

Mar 31, 2010

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

2. We conducted our audit in accordance with the auditing standards generally accepted in India. 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 the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the 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 (CARO) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Pursuant to standby charter agreements entered with SCI Forbes Limited (SFL), a joint venture entity, the Company and its joint venture partner, Shipping Corporation of India (SCI), together, Promoters, have committed to charter vessels from SFL, at charter-hire charges specified in the aforesaid agreements, in the event the vessels are not on charter with a lender approved third party, until SFL repays its borrowings which is spread over a period of twelve years. As represented to us by the Management, the prevailing charter markets being soft and as pooling arrangements do not technically constitute a charter, the Promoters of SFL, as a matter of commercial prudence, have for the time being, taken on the charter themselves. Further, SFL and its Promoters have proposed to the lenders of SFL a restructuring of the loan covenants and terms including suspension of enforcement of the aforesaid standby charter agreements, subject to fulfilment of certain conditions. The Company expects that their proposal would find favour with all the concerned parties (see Note 17 on Schedule 11 to the accounts). In the interim, in our opinion, as required under Accounting Standard 29, ÃProvisions, Contingent Liabilities and Contingent Assets, notified under the Companies Act, 1956, provision for the loss of Rs. 735.80 lakhs materialised subsequent to 31st March, 2010, should have been made by way of a charge to the Profit and Loss Account. This has resulted in the loss, before and after tax, and provisions being understated by Rs. 735.80 lakhs and reserves and surplus being overstated by the same amount.

5. Attention is invited to Note 16 on Schedule 11 to the accounts relating to loans given to The Svadeshi Mills Company Limited and Coromandel Garments Limited, aggregating Rs. 4,725.61 lakhs in respect of which full provision has been made, arising inter alia from our enquiry under Section 227(1A)(a) of the Companies Act, 1956. Our report on the financial statements for the year ended 31st March, 2009 contained a similar modification.

6. Without qualifying our opinion, we invite attention to Note 20 on Schedule 11 to the accounts relating to managerial remuneration of Rs. 37.35 lakhs paid in excess of the limits specified in Schedule XIII of the Companies Act, 1956 and is subject to the approval of the Central Government. Our report on the financial statements for the year ended 31st March, 2009 contained a similar modification where approval of the Central Government has since been received by the Company.

7. Without qualifying our opinion, we report that transactions for sale of goods of a value aggregating Rs. 3.29 lakhs have been entered into, with two private limited companies in which one of the directors of this Company is also a director of those private limited companies, without obtaining previous approval of the Central Government. This is not in compliance with the provisions of Section 297 of the Companies Act, 1956.

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

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

(ii) subject to the matter stated in paragraph 4 above, 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, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account;

(iv) subject to the matter stated in paragraph 4 above, in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in compliance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956;

(v) subject to the matter stated in paragraph 4 above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956 in the manner so required and 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.

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date)

1. In respect of its fixed assets:

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

(b) According to the information and explanations given to us, the fixed assets have not been physically verified by the Management during the year. However, all the assets had been physically verified by the Management during the previous year in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the Company and the nature of its assets. In view of the foregoing, the question of reporting in the current year on discrepancies noticed on physical verification does not arise.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

2. In respect of its inventories:

(a) As explained to us, the inventories (other than stocks lying with third parties, in respect of which, confirmations have been obtained in most cases) were 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 were reasonable and adequate in relation to the size of the Company and the nature of its business except for stocks lying with third parties (in respect of which, confirmations have been obtained in most cases), which needs to be verified periodically by the Management.

(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.

3. The Company has neither granted nor taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system generally commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in such internal control system.

5. In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) According to the information and explanations given to us, each of such transaction is not exceeding the value of Rs. 5 Lakhs in respect of any party. Therefore, the question of reporting on Clause 4(v)(b) of CARO does not arise.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

7. In our opinion, the internal audit functions carried out during the year by firms of Chartered Accountants appointed by the Management have been commensurate with the size of the Company and the nature of its business.

8. The Company has not maintained cost records in respect of its Motors Manufacturing segment which is covered by the Order made by the Central Government for the maintenance of the cost records under Section 209(1)(d) of the Companies Act, 1956. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

9. According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it with the appropriate authorities though there have been slight delays in few cases.

(b) There were no undisputed amounts payable in respect of Income Tax, Wealth Tax, Customs Duty, Excise Duty, Cess and other material statutory dues in arrears as at 31st March, 2010 for a period of more than six months from the date they became payable except for the following:

Name of the Statute Nature Amount (Rs.in lakhs) Due Date

The Companies Act, 1956 Investor Education & 1.29 May, 2006 Protection Fund

The Bombay Labour Unpaid Wages & Bonus 3.94 Prior to 1st April, 2006 Welfare Fund Act, 1953

(c) Details of dues of Income Tax, Sales Tax, Wealth Tax and Excise Duty which have not been deposited as on 31st March, 2010 on account of disputes are given below:

Statute Nature of dues Forum where Period to Amount dispute is which the involved pending amount relates (Rs. in lakhs) Income Tax Act, 1961 Income Tax Income Tax Assessment Years: - 520.68 Appellate Tribunal 1989-90,1997-98, 2003-04 to 2005-2006

Commissioner of Income Tax (Appeals) Assessment Years: - 667.55 1991-92, 1992-93, 1998-99, 2001-02, 2002-03, 2005-06 to 2007-08

Wealth Tax Act, 1957 Wealth Tax Commissioner Assessment Years:- 19.74 of Wealth Tax (Appeals) 1996-97 to 2000-01

Sales Tax Laws Sales Tax Commercial Tax Officer, 2004-05 3.95

(including interest Chennai and penalty) Madras High Court 1998-99,1999-00 87.75

Madras High Court 1989-90 386.63 Sales Tax Appellate 1992-93 3.76 Tribunal, Cuttack

Sales Tax Appellate 1990-91 to 1993-94 45.66 Tribunal, Patna

Various Appellate 1994 to 2002 113.81 Authorities

Asst. Commissioner of (CT) 2000-2001 to 2005-2006 222.92 Thiruvanmiyar Assessment Circle.

The Central Excise Excise Duty Custom Excise & Service Nov 2002 to June 2003 20.44

Act, 1944 Tax Appellate Tribunal, Chennai

Additional Commissioner 2000 to 2003 54.99 of Central Excise

Custom Excise & 2003 to 2007 4,624.87 Service Tax Appellate Tribunal, New Delhi

Custom Excise & 1995-96 9.38 Service Tax Appellate Tribunal, Chennai

Assistant Commissioner 2000 to 2004 5.94 of Central Excise

Commissioner of December 2003 to 28.42 Central Excise, Chennai December 2004 and Nov 2006 to Feb 2007

10. The Company does not have any accumulated losses as at 31st March 2010, the debit balance in Profit and Loss Account being set-off against uncommitted reserves. The Company has not incurred cash losses during the financial year covered by our audit but has incurred cash losses in the immediately preceding financial year.

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

12. 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.

13. The Company is not a chit fund or a nidhi / mutual benefit fund / society.

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

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

16. In our opinion and according to the information and explanations given to us, term loans have been applied for the purposes for which they were obtained.

17. In our opinion and according to the information and explanations given to us and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis amounting to Rs. 6,097.02 lakhs have, prima facie, been used during the year, for long-term investments.

18. 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.

19. The Company has not issued any debentures.

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

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117366W)

Rajesh K Hiranandani

Partner

MUMBAI, 13th August, 2010 (Membership No. 36920)

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