Auditor Report of Gokak Textiles Ltd.

Mar 31, 2025

We have audited the accompanying standalone financial statements of Gokak Textiles Limited (“the Company”) which comprise
the standalone balance sheet as at March 31, 2025, the standalone statement of profit and loss (including other comprehensive
income), the standalone statement of changes in equity and the standalone statement of cash flows for the year ended on
that date, and notes to the standalone financial statements, including a summary of significant accounting policies and other
explanatory information (hereinafter referred to as “the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial
statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and
fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian
Accounting Standards) Rules, 2015 (“Ind AS”), as amended and other accounting principles generally accepted in India, of the
state of affairs of the Company as at March 31, 2025, the loss (including other comprehensive income), changes in equity and its
cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of standalone financial statements in accordance with the Standards on Auditing (SAs) specified under
section 143(10) of the Act. Our responsibilities under those Standards are further described in the ''Auditor''s 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 (“ICAI”) together with the independence 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 ICAI''s Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial
statements.

Material Uncertainty Related to Going Concern

We draw attention to Note 48 of the standalone financial statements, which indicates that the Company has incurred a net loss
for the year ended March 31, 2025 and that its current liabilities exceeded its current assets as at that date. The Company has
accumulated significant losses and its net worth has been fully eroded. These conditions, along with reduced operations and
increased financial stress, indicate the existence of a material uncertainty that may cast significant doubt on the Company''s ability
to continue as a going concern. However, the standalone financial statements have been prepared on a going concern basis of
accounting based on the reasons stated in the said Note. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of most significance in our audit of the standalone
financial statements of the current period. Those 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. In addition
to the matter described in the Material Uncertainty Related to Going Concern section above, we have determined the matters
described below to be the key audit matters to be communicated in our report.

1. Impairment testing of investment in equity shares of subsidiary
(Refer Note 6A of the standalone financial statements)
Description of Key Audit Matter:	How the matter was addressed in our audit:
The Company has investment of Rs. 2,499.00 lakhs in the	We analysed the methods and assumptions applied by
equity shares of Gokak Power & Energy Limited (''GPEL'')	management to carry out the impairment test though following
which represents 51% of its equity capital. GPEL is engaged in the business of generation and distribution of hydro power and	procedures:
significant portion of power generated by GPEL is used by the	• Identification and understanding of the significant controls
Company for its textile factory.	implemented by the Company over the impairment testing process;
Investments in subsidiaries are valued at cost adjusted for impairment losses, if any. In line with “Ind AS 36 Impairment	• Analysis of the reasonableness of the principal
of assets”, in the presence of an impairment indicator, the	assumptions made to estimate their cash flows by
Company carries out an impairment test by comparing the	obtaining information from management that we deemed
recoverable amount of the investments, determined according	to be significant;
to the value in use method and their carrying amount.	• We also examined the adequacy of the information
GPEL has accumulated losses of '' 3,274.33 lakhs as on March	provided by the Company about the impairment test and
31,2025 which indicates that the investment in GPEL could be	its consistency with the requirements of Ind AS 36;
impaired and requires impairment testing.	• Analysis of actual data of the year and previous years
The valuation process adopted by management is complex	in comparison with the original plan, in order to assess
and is based on a series of assumptions, such as the forecast	the nature of variances and the reliability of the planning
cash flows, the appropriate discounting rate (WACC) and the	process;
long-term growth rate. These assumptions are, by nature,	• Assessment of the reasonableness of the discount rate
influenced by future expectations regarding the evolution of external market conditions.	(WACC) and the long-term growth rate;
We focused on this area due to the significance of management judgements adopted in assessing the recoverable amount with regard to the impairment assessment.	• Verification that the carrying amount of the investment was determined properly and comparison with the value in use resulting from the impairment test.

2. Going Concern Assessment (Refer Note 48 of the standalone financial statements)
Description of Key Audit Matter:	How the matter was addressed in our audit:
The Company has incurred a net loss (including other comprehensive income) of Rs. 4,524.53 lakhs for the year ended March 31, 2025 and its current liabilities exceeded its current assets by Rs. 3,897.19 lakhs as at that date. The Company has significant accumulated losses of Rs. 22,870.02 lakhs, and its net worth has been fully eroded. These conditions, along with reduced operations and increased financial stress, indicate the existence of a material uncertainty that may cast significant doubt on the Company''s ability to continue as a going concern. We focused on this area due to the significance of management judgements adopted in assessment of the going concern assumption for the preparation of standalone financial statement and related material uncertainties. Refer above paragraph on “Material Uncertainty Related to Going Concern”	We performed the following principal audit procedures in relation to management''s assessment of going concern: • Evaluated the appropriateness of management''s use of going concern basis of accounting in the preparation of standalone financial statements in accordance with Standard on Auditing issued by ICAI in this regard. • Evaluated the management''s plans for future actions in relation to its going concern assessment, to assess whether the outcome of those plans is likely to improve the situation and whether management''s plans are feasible in the circumstances. • Evaluated the appropriateness of identification of material uncertainties. • Assessed the possible mitigating actions identified by management in the event that actual cash flows are below forecast.

	• Discussed with management and assessed, the possible effect of liquidity stress in textile segment and its possible effect on the solar segment
	• Discussed and obtained a written letter from the holding company indicating its intention and ability to support the Company''s financial and operating requirements through infusion or arrangement of additional capital / funds as and when necessary.
	• Evaluated disclosures in the financial statements for the Material Uncertainty Related to Going Concern and the related compliance with the requirements of the Standards on Auditing and the applicable financial reporting standards.

3. Impairment testing of Property, Plant and Equipment (Refer Note 3, Note 30(iii) and Note 53 of the standalone financial statements)
Description of Key Audit Matter:	How the matter was addressed in our audit:
As at March 31, 2025, the carrying amounts of Property Plant and Equipment (“PPE”) amounted to Rs. 21,793.70 lakhs, significant part which comprise of Rs. 18,022.95 lakhs pertaining to solar power plant (“Solar Plant”) and balance pertains to the textile division of the Company. Certain PPE had impairment indicators on account of reduced turnover and financial condition of the Company. Also refer above paragraph on “Material Uncertainty Related to Going Concern”.	We performed the following principal audit procedures in relation to management''s testing of impairment of PPE: • Identification and understanding of the significant controls implemented by the Company over the impairment testing process; • Understanding the restoration plans for certain assets along with physical verification of the PPE location and evaluation of the current status of the assets.
Further, during the last quarter of the financial year ended March 31, 2025, the Company''s Solar Plant experienced five fire incidents, on January 16, February 3, February 15, March 4, and March 6, 2025 which impacted upto 20MW capacity of the Plant which was later restored upto 35MW as at March 31, 2025 and the balance capacity was under restoration. Subsequent to the financial year end, the Solar Plant again suffered failure in one of the transformers impacting 15MW as at May 13, 2025.	• Analysis of the reasonableness of the principal assumptions made to estimate the recoverable amounts by obtaining information from management that we deemed to be significant; • Analysis of actual data of the year and previous years in comparison with the original plan, in order to assess the nature of variances and the reliability of the planning process;
The Company carries out impairment testing, based on indicators of impairment. For cash generation units (“CGU”) to which these PPE belong and contain, the determination of recoverable amount, being the higher of fair value less costs to sell and value in use requires judgment on the part of management in both identifying and then valuing the relevant CGUs. Recoverable amounts are based on various variables which requires significant management judgement and estimation.	• We also examined the adequacy of the information provided by the Company about the impairment test and its consistency with the requirements of Ind AS 36.
We focused on this area due to the significance of management judgements adopted in assessing the recoverable amount with regard to the impairment assessment.

Information other than the standalone financial statements and auditor''s report thereon

The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the
information included in the Management Discussion and Analysis and Board''s Report including Annexures to Board''s Report, but
does not include the financial statements and our auditor''s report thereon.

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

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

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

Management''s Responsibility for the standalone Financial Statements

The Company''s Board of Directors is 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, total
comprehensive income/loss, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting
principles generally accepted in India. 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 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, management is responsible for assessing the Company''s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company''s financial reporting process.

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

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

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

• Obtain an understanding of internal financial controls 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 adequate internal financial controls system in place and the operating effectiveness of such
controls.

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

• Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the

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

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

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance
in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in
our auditor''s 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 (“the Order”), issued by the Central Government of India
in terms of sub-section (11) of section 143 of the Act, we give in the ''Annexure A’ a statement on the matters specified in
paragraphs 3 and 4 of the Order.

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

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our
examination of those books except for the matters stated in the paragraph ''2.(j)vi.'' below on reporting under Rule 11(g)
of the Companies (Audit and Auditors) Rules, 2014.

c) The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the
standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in
agreement with the books of account.

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

e) The matter described in the ''Material Uncertainty Related to Going Concern'' section above, in our opinion, may have an
adverse effect on the functioning of the Company.

f) On the basis of the written representations received from the directors of the Company as on March 31,2025 and 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.

g) The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the
paragraph ''2.(b)'' above on reporting under Section 143(3)(b) of the Act and paragraph ''2.(j)vi.'' below on reporting under
Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

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

i) With respect to the other matters to be included in the auditor''s report in accordance with the requirements of section
197(16), as amended, in our opinion and to the best of our knowledge and according to the explanations given to us,
the remuneration paid/provided by the Company to its directors during the year is in accordance with the provisions of
section 197 of the Act.

j) 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 financial
statements. (Refer Note 44 of the standalone financial statements)

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

iii. There were no amounts which 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 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 persons or entities, including foreign entities (“Intermediaries”), 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 (“Ultimate Beneficiaries”) 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, other than those disclosed
in the standalone financial statements, no funds have been received by the Company from any persons or
entities, including foreign entities (“Funding Parties”), 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 (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on audit procedures performed, nothing has come to our attention that causes us to believe that the
representations under sub-clause (i) and (ii) of Rule 11(e), as provided in (a) and (b) above, contain any
material misstatement.

v. The Company has not declared or paid any dividend during the year.

vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining
its books of account for the financial year ended March 31, 2025 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
except in case of one software used for maintaining closing stock quantities of inventory and one software used
for maintaining payroll records did not have audit trail feature throughout the year. Further, in respect software, for
which audit trail existed, during the course of our audit we did not come across any instance of the audit trail feature
being tampered with. Additionally, the audit trail pertaining to the software for which it existed, has been preserved
by the Company as per the statutory requirements for record retention.

For BATLIBOI & PUROHIT

Chartered Accountants

ICAI Firm Reg. No.101048W

N. S. Gaur

Partner

Membership No. 137138

ICAI UDIN: 25137138BMGGHQ9757

Place : Mumbai

Date : May 23, 2025

---

Mar 31, 2024

We have audited the accompanying standalone financial statements of Gokak Textiles Limited (“the Company”) which comprise the Balance Sheet as at March 31,2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as “the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015 (“Ind AS”), as amended and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2024, the loss and the total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

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

Emphasis of Matter

We draw attention to Note 51 of the standalone financial statements which describes the Composite Scheme of Arrangement (''the Scheme'') for reduction of share capital and re-organisation of reserves of the Company and amalgamation by absorption of Suryoday One Energy Private Limited with the Company, which has been approved by National Company Law Tribunal -Bengaluru Bench on April 24, 2024 with Appointed Date of April 01,2022. The said Scheme became effective from May 24, 2024. Accordingly, the standalone financial statements have been prepared after taking into consideration the effect of the provisions of the Scheme with effect from the Appointed Date and consequently, the corresponding figures have also been restated. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of most significance in our audit of the standalone financial statements of the current period. Those matters were addressed in the context of our audit of the 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.

a) Accounting for the Composite Scheme of Arrangement

Description of Key Audit Matter:

The Hon''ble National Company Law Tribunal (''NCLT''), in its order dated April 24, 2024 (''the Order'') approved the Composite Scheme of Arrangement for reduction of share capital and re-organisation of reserves of the Company and amalgamation (by way of absorption) of Suroyoday One Energy Private Limited (''SOEPL'' or ''transferor company'') into the Company (''the Scheme'').

Pursuant to the Order, the Appointed Date of the Scheme was fixed at April 01, 2022 and the Scheme has become effective from May 24, 2024 i.e. the last date on which the certified copy of the Order was filed with the Registrar of the Companies by the both amalgamating companies.

The amalgamation has been accounted by applying the principles as set out in Appendix C of IND AS 103 “Business

Combinations” and in accordance with the Ministry of Corporate Affairs (MCA) circular dated August 21,2019, the Company has considered the Appointed Date (i.e. April 01,2022) as the date of amalgamation. Accordingly, the Company has prepared its standalone financial statements for the year ended March 31, 2024 after giving effect to the aforesaid Scheme.

Refer Note 51 of the standalone financial statements for detailed accounting treatment and related disclosures.

How the matter was addressed in our audit:

• We pursued the approved Scheme for appropriateness of the determination of the effective date, appointed date and accounting treatment as prescribed in the Scheme.

• We understood the process and controls and their effectiveness for accounting of the Scheme in respect of the capital reduction and amalgamation.

• We traced the balances used for the capital reduction and amalgamation from the respective books of accounts of the companies.

• We reviewed the treatment for alignment in respect of difference in accounting policies for certain items of financial statements and elimination of inter-company balances of the amalgamating companies.

• We assessed the adequacy and appropriateness of the disclosures relating the capital reduction and amalgamation made in the standalone financial statements.

b) Going Concern Assessment Description of Key Audit Matter:

During the year, the Company incurred losses of '' 1,756.70 lakhs for the year ended March 31, 2024 and has accumulated losses of '' 18,345.49 lakhs as on March 31, 2024. Further the Company''s current liabilities exceeded its current assets by '' 5,384.40 lakhs as at March 31, 2024. These conditions indicate requirement of assessment of the Company''s ability to continue as a going concern.

The Company''s financial statements have been prepared on a going concern basis on the reporting date, based on the reasons stated in Note 48 of the standalone financial statements.

How the matter was addressed in our audit:

• We evaluated the appropriateness of management''s use of going concern basis of accounting in the preparation of standalone financial statements in accordance with Standard on Auditing issued by ICAI in this regard.

• We evaluated the management''s plans for future actions in relation to its going concern assessment, to assess whether the outcome of those plans is likely to improve the situation and whether management''s plans are feasible in the circumstances.

• We considered the expected effect of the capital reduction and amalgamation of the solar power business into the Company.

• We assessed the possible mitigating actions identified by management in the event that actual cash flows are below forecast.

• We discussed and obtained a written letter from the holding company indicating its intention and ability to support the Company''s financial and operating requirements through infusion of additional capital as and when necessary.

c) Impairment testing of investment in equity shares of subsidiary Description of Key Audit Matter:

The Company has investment of '' 2,499.00 lakhs in the equity shares of Gokak Power & Energy Limited (''GPEL'') which represents 51% of its equity capital. GPEL is engaged in the business of generation and distribution of hydro power and significant portion of power generated by GPEL is used by the Company for its textile factory.

Investments in subsidiaries are valued at cost adjusted for impairment losses, if any. In line with “Ind AS 36 Impairment of assets”, in the presence of an impairment indicator, the Company carries out an impairment test by comparing the recoverable amount of the investments, determined according to the value in use method and their carrying amount.

GPEL has accumulated losses of '' 3,344.60 lakhs as on March 31, 2024 which indicates that the investment in GPEL could be impaired and requires impairment testing.

The valuation process adopted by management is complex and is based on a series of assumptions, such as the forecast cash flows, the appropriate discounting rate (WACC) and the long-term growth rate. These assumptions are, by nature,

influenced by future expectations regarding the evolution of external market conditions. Based on the impairment test carried out by the management, it was concluded that impairment is not necessary.

How the matter was addressed in our audit:

We analysed the methods and assumptions applied by management to carry out the impairment test though following procedures:

• identification and understanding of the significant controls implemented by the Company over the impairment testing process;

• analysis of the reasonableness of the principal assumptions made to estimate their cash flows by obtaining information from management that we deemed to be significant;

• We also examined the adequacy of the information provided by the Company about the impairment test and its consistency with the requirements of Ind AS 36;

• analysis of actual data of the year and previous years in comparison with the original plan, in order to assess the nature of variances and the reliability of the planning process;

• assessment of the reasonableness of the discount rate (WACC) and the long-term growth rate;

• verification that the carrying amount of the investment was determined properly and comparison with the value in use resulting from the impairment test.

Information other than the financial statements and auditor''s report thereon

The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Management Discussion and Analysis and Board''s Report including Annexures to Board''s Report, but does not include the consolidated financial statements, standalone financial statements and our auditor''s report thereon.

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

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

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

Management''s Responsibility for the standalone Financial Statements

The Company''s Board of Directors is 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, total comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 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, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibilities for the Audit of the Standalone Financial Statements

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

As part of an audit in accordance with SAs, we exercise professional judgement and maintain professional skepticism throughout

the audit. We also:

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

• Obtain an understanding of internal financial controls 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 adequate internal financial controls system in place and the operating effectiveness of such controls.

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

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

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

Materiality is the magnitude of misstatements in the financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the 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 financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s 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 (“the Order”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the ''Annexure A’ a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

e) On the basis of the written representations received from the directors of the Company as on March 31,2024 and 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 “Annexure B”. 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 the requirements of section 197(16), as amended:

In our opinion and to the best of our knowledge and according to the explanations given to us, the remuneration paid/ provided by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

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, 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 financial statements. (Refer Note 44 of the standalone financial statements)

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

iii. There were no amounts which 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 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 persons or entities, including foreign entities (“Intermediaries”), 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 (“Ultimate Beneficiaries”) 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, other than those disclosed in the financial statements, no funds have been received by the Company from any persons or entities, including foreign entities (“Funding Parties”), 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 (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

(c) Based on audit procedures performed, nothing has come to our attention that causes us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided in (a) and (b) above, contain any material misstatement.

v. The Company has not declared or paid any dividend during the year.

vi. Based on our examination, which included test checks, the Company has used accounting software for maintaining its books of account for the financial year ended March 31, 2024 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.

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 preservation of audit trail as per the statutory requirements for record retention is not applicable for the financial year ended March 31,2024.

For BATLIBOI & PUROHIT

Chartered Accountants ICAI Firm Reg. No.101048W

N. S. Gaur

Partner

Place : Mumbai Membership No. 137138

Date : May 25, 2024 ICAI UDIN: 24137138BKGEMR3783

---

Mar 31, 2016

INDEPENDENT AUDITOR''S REPORT TO THE MEMBERS OF GOKAK TEXTILES LIMITED

Report on the Standalone Financial Statements

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

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company 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 provision of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

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

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

Opinion

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

Emphasis of Matters

In forming our opinion on the financial statements, in view of the accumulated losses and the labour related problems, we have considered and relied on the parent company''s commitment to and the active involvement in the Company and based on the above, the financial statements have been prepared on the Going Concern basis.

Our opinion is not modified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

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

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

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.

In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us. The Branch Auditor''s report has been forwarded to us and has been appropriately dealt with.

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 and with the audited returns received from the branches.

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

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

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

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:

The Company has disclosed the impact of pending litigations on its financial position in its financial statements - refer note 29 to the financial statements.

The Company does not have any material foreseeable losses on long term contracts including derivative contracts requiring provision under the applicable law or accounting standards.

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

As referred to in Paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our Independent Auditor''s Report of even date on the standalone financial statements of Gokak Textiles Limited for the six months ended March 31, 2016.

Statement on Matters specified in paragraphs 3 and 4 of the Companies (Auditor''s Report) Order, 2016:

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

(b) As informed to us, the Company has a program for physical verification of fixed assets at periodic intervals. As informed to us, the fixed assets have been verified by the Company as per the program and we were informed that no material discrepancies were noticed.

(c) Based on the information and explanations given to us and on the basis of examination of the records of the Company, the details of title deeds of immovable properties are as under:

Sr. No.	Nature of asset	No. of Cases	Whether Leasehold / Freehold	Gross Block as on March 31, 2016	Net Block as on March 31, 2016	Remarks
				Rupees	Rupees
1.	Land	1	Freehold	11,35,177	11,35,177	* The title deeds of the property are in the name of erstwhile entities (Mills Division). * As per the government records, some portion of the land is neither in the name of the Company nor in the name of erstwhile entities.
2.	Land	1	Freehold	11,10,273	11,10,273	The title deeds of the properties are in the name of erstwhile entity (Knitwear Division).
3.	Land	1	Leasehold	1,50,000	1,50,000	The lease deed of the land is in the name of erstwhile entity (Mills Division).
4.	Building	2	Freehold	7,77,500	380,335	The title deeds of all the properties are in the name of erstwhile entity (Mills Division).
5.	Building	Refer note below	Refer note below	21,02,355	15,27,062	The title deeds were not made available for verification. Consequently, we are not able to comment.

Note : Information not available

ii. In our opinion and according to the information and explanations given to us, physical verification of inventory has been conducted at reasonable intervals by the management. As informed to us, the discrepancies noticed on verification between physical inventories and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, and limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Therefore, the provisions of sub-clause (a), (b) and (c) of paragraph 3(iii) of the Order are not applicable.

iv. In our opinion and according to the information and explanations given to us and the records examined by us, the Company has complied with the provision of section 185 and 186 of the Act with respect to investments made and securities provided.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the Rules framed there under are not applicable.

vi. In our opinion and according to the information and explanations given to us, the maintenance of cost records has been specified by the Central Government under sub-section (1) of section 148 of the Act. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 148 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

vii. (a) According to the information and explanations given to us by the Company and the Branch Auditors and the records examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues to the appropriate authorities. According to the information and explanations given to us by the Company and the Branch Auditors, there are no arrears of outstanding statutory dues in respect of above as on the last day of the financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanation given to us by the Company and the Branch Auditors and on the basis of our examination of the books of account and the records, there are no dues of Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise and Value added tax outstanding on account of any dispute, other than the following:

Name of Stature	Amount(Rs)	Period to while the amount relates	Forum where dispute is pending
The Karnataka Special Tax on Entry of Certain Goods Act, 2004	1,14,58,194	October-2004 to March-2007	High Court of Karnataka, Bangalore
The Excise Duty Act, 1944	32,62,241	2004-2005 and 2005-2006	The Central Excise and Service Tax Appellate Tribunal, Mangalore
The Employees Provident Fund and Miscellaneous Provision Act, 1952	40,14,265	January -1990 December - 2001	The Employees Provident Fund Appellate Tribunal
The Excise Duty Act, 1994	1,10,37,577	December 2004 to May-2005	The Supreme Court of India

The Company has deposited Rs.12, 04,583 and Rs.8, 15,561 under protest towards provident fund and excise duty respectively.

viii. According to the records of the Company examined by us and the information and explanations given to us by the Company and the Branch Auditors, the Company has not defaulted in repayment of dues to financial institutions, banks and government. There are no dues to debenture holders.

ix. The Company has not raised money through initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us and based on the documents and records examined by us on an overall basis, the term loans obtained by the Company were applied for the purpose for which the loans were obtained.

x. During the course of our examination of the books of account and records of the Company, and according to the information and explanation given to us by the Company and the Branch Auditors and representations made by the Management, no material fraud by or on the Company by its officers or employees, has been noticed or reported during the financial year.

xi. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

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

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

xiv. According to the information and explanation given to us and based on our examination of the records of the Company, the allotment of 7% Non-cumulative, non-convertible, Redeemable Preference Shares made by the Company through private placement basis is in compliance with the requirements of section 42 of the Companies Act, 2013. According to the information and explanation given to us and based on our examination of the records of the Company, the amount raised through private placement has been used for the purpose for which the funds were raised.

xv. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with the directors or persons connected with them. Hence, the 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 hence the provisions of paragraph 3 (xvi) of the Order are not applicable.

As referred to in Paragraph 2 (f) under the heading "Report on Other Legal and Regulatory Requirements" of our Independent Auditor''s Report of even date on the standalone financial statements of Gokak Textiles Limited for the six months ended March 31, 2016.

Report on the Internal Financial Controls under Clause

(1) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of GOKAK TEXTILES LIMITED ("the Company") as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the six months ended on that date.

Management’s Responsibility for Internal Financial Controls

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

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, 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 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 knowledge and information and based on the explanations, information and records given to us, the Company has, in all material respects, maintained adequate internal financial controls systems over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.

For KALYANIWALLA & MISTRY

CHARTERED ACCOUNTANTS

(Firm Registration No. 104607W)

Anil A. Kulkarni

Partner

Membership No. 47576

Place: Mumbai

Date: July 8, 2016

---

Sep 30, 2015

We have audited the accompanying financial statements of Gokak Textiles Limited ("the Company"), which comprise the Balance Sheet as at September 30, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

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

Auditor's Responsibility

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

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

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at September 30, 2015, and its loss and its cash flows for the year ended on that date.

Our opinion is not modified in respect of these matters.

Other Legal and Regulatory Requirements

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

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

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

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us. The Branch Auditor's report has been forwarded to us and has been appropriately dealt with.

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 and with the audited returns received from the branches.

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

e. On the basis of written representations received from the directors as on September 30, 2015, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on September 30, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 financial statements.

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

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

ANNEXURE TO THE AUDITOR'S REPORT

Referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date on the financial statements of Gokak Textiles Limited for the year ended September 30, 2015.

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

(b) The Company has a program for physical verification of fixed assets at periodic intervals. As informed to us, the fixed assets have been verified by the Company during the year and were informed that no material discrepancies were noticed.

ii. (a) The Management has conducted physical verification of inventory at reasonable intervals.

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

(c) The Company is maintaining proper records of inventory. As informed to us, the discrepancies noticed on verification between physical inventories and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

iii. 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. Accordingly sub-clauses (a) and (b) of clause (iii) of paragraph 3 of the Order are not applicable to the Company for the current year.

iv. In our opinion and according to the information and explanations given to us by the Company, there are adequate internal control procedures 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, no major weakness has been noticed in the internal controls.

v. According to the information and explanations given to us, the Company has not accepted any deposits from the public.

vi. According to the information and explanations given to us, the maintenance of cost records has not been specified by the Central Government under sub-section (1) of section 148 of the Act, for the activities of the Company.

vii. (a) According to the information and explanations given to us by the Company and the branch auditors and the records examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities.

According to the information and explanations given to us by the Company and the branch auditors, there are no arrears of outstanding statutory dues in respect of above as at the last day of the financial year for a period of more than six months from the date they became payable except for sales tax and value added tax amounting to Rs.120,709 and service tax amounting to Rs.8,665.

(b) According to the information and explanations given to us by the Company and the branch auditors and on the basis of our examination of the books of account and records, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, or Cess on account of any dispute, other than the following:

Name of Statute Amount (Rs) Period to which the amount relates Forum where dispute is pending

The Karnataka Special Tax 114,58,194 October-2004 to on March-2007 High Court of Karnataka, Bangalore

on Entry of Certain Goods Act, 2004

The Excise Duty Act, 1944 32,62,241 2004-2005 and 2005-2006 The Central Excise and Service Tax

Appellate Tribunal, Mangalore

The Employees Provident 40,14,265 January-1990 to December- 2001 The Employees Provident Fund

Fund and Miscellaneous Appellate Tribunal

Provision Act, 1952

The Excise Duty Act, 1944 110,37,57 December 2004 to May 2005 The Supreme Court of India

The Company has deposited Rs.12,04,583 and Rs.8,15,561 under protest towards provident fund and excise duty respectively.

(c) According to the information an d explanations given to us, there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

viii.The Company has accumulated losses exceeding fifty percent of the net worth as at the end of the financial year and has incurred cash losses in the current financial year and in the immediately preceding financial year.

ix. According to the records of the company examined by us and the information and explanations given to us by the Company and the branch auditors, the Company has not defaulted in repayment of dues to banks and financial institutions. There are no dues to debenture holders.

x. According to the information and explanations given to us by the Company, the Company has not given any guarantee for loans taken by others from banks or financial institutions except investments of the Company in Gokak Power and Energy Limited (a subsidiary company), equivalent to 14,700,000 shares at a carrying cost of Rs.1,470 lac, have been pledged with a bank against loan obtained by the said subsidiary company.

xi. According to the information and explanations given to us by the Company and the records examined by us, the Company has applied the term loans for the purpose for which the loans were obtained.

xii. Based on the audit procedures performed and information and explanations given by the management and branch auditors, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of

Kalyaniwalla & Mistry

Chartered Accountants

Firm Regn No. 104607W



Anil A. Kulkarni

Mumbai, Partner

November 23, 2015 Membership No. 47576

---

Sep 30, 2014

1. We have audited the accompanying financial statements of Gokak Textiles Limited ("the Company"), which comprise the Balance Sheet as at September 30, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

2. 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") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

3. 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.

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

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

Opinion

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at September 30, 2014;

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

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

Other Legal and Regulatory Requirements

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

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

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

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us. The Branch Auditor''s report has been forwarded to us and has been appropriately dealt with.

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 and with the audited returns received from the branches.

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

e. On the basis of written representations received from the directors as on September 30, 2014, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on September 30, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Act.

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

ANNEXURE TO THE AUDITORS'' REPORT

Referred to in Paragraph 7 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date on the financial statements of Gokak Textiles Limited for the year ended September 30, 2014.

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

(ii) As explained to us, the Company has a program for physical verification of fixed assets at periodic intervals. As informed to us, the fixed assets have been verified by the Company during the year and were informed that no material discrepancies were noticed.

(iii) In our opinion, the fixed assets disposed off during the year were not substantial and do not affect the going concern status of the Company.

2) (i) The Management has conducted physical verification of inventory at reasonable intervals.

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

(iii) The Company is maintaining proper records of inventory. As informed to us, the discrepancies noticed on verification between physical inventories and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3) (a) As informed, the Company has not granted any loan, secured/ unsecured to any Companies, firms or parties covered in the register maintain ed under Section 301 of the Companies Act, 1956. Accordingly, the provisions of Para 4 clause (iii) (b) to (d) of the said order are not applicable. (b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of Para 4 clause (iii) (f) to (g) of the said order are not applicable.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, there were no contracts or arrangements referred to in section 301 of the Act to be entered in the register required to be maintained under that section.

Consequently, comment on sub clause (b) of clause 5 of the Companies Auditor''s report 2003 is not required.

6) During the year under audit, the company has not accepted fixed deposits from the public.

7) The Company has an internal audit system, which in our opinion is commensurate with the size of the company and the nature of its business.

8) We have broadly reviewed the books of account maintained by the Company in respect of cost records as 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 accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) (a) According to the records examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other statutory dues applicable to it with the appropriate authorities. We have been also informed that there are no undisputed dues which have remained outstanding at the end of the financial year for a period of more than six months from the date they became payable except for Rs.8,665 towards service tax. (b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service tax, Excise Duty or cess outstanding on account of any dispute other than following:

Name of Statute Amount(Rs) Period to which the amount relates

The Karnataka Special 11,458,194 October-2004 to March-2007 Tax on Entry of Certain Goods Act,2004

The Income Tax Act, 1961 300,912 2001-02 and 2002-03

The Excise Duty Act, 1944 5,562,848 July-2004 to April-2010

The Employees Provident 4,014,265 January-1990 to December-2001 Fund and Miscellaneous Provision Act, 1952

The Excise Duty Act, 1944 11,037,577 December 2004 to May 2005

Name of Statute Forum where dispute is pending

The Karnataka Special Tax on High Court of Karnataka, Bangalore Entry of Certain Goods Act,2004

The Income Tax Act, 1961 The Commissioner of IncomeTax (Appeals)

The Excise Duty Act, 1944 The Central Excise and Service Tax Appellate Tribunal, Mangalore

The Employees Provident The Employees Provident Fund Appelate Fund and Miscellaneous Tribunal Provision Act, 1952

The Excise Duty Act, 1944 The Supreme Court of India

The Company has deposited Rs.1,204,583 towards provident fund under protest.

10) The Company has accumulated losses exceeding fifty percent of the net worth as at the end of the financial year and has incurred cash losses in the current financial year and in the immediately preceding financial year.

11) According to the records of the company examined by us and the information and explanations given to us by the Company and the branch auditor, the Company has not defaulted in repayment of dues to banks or financial institutions.

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

13) According to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.

14) According to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures or investments. Accordingly clause 4 (xiv) of the order is not applicable to the Company.

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 except investments of the Company in Gokak Power and Energy Limited (a subsidiary company), equivalent to 14,700,000 shares at a carrying cost of Rs. 1,470 lac, have been pledged with a bank against loan obtained by the said subsidiary company.

16) According to the information and explanations given to us and the records examined by us, the Company has applied the term loans for the purpose for which the loans were obtained.

17) On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanations given to us, we report that the Company has not utilized the funds raised on short-term basis for long-term investment.

18) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19) The Company did not issue any debentures during the year.

20) The Company has not raised any money through a public issue during the year.

21) Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of Anil A. Kulkarni Kalyaniwalla & Mistry Partner Chartered Accountants Membership No. 47576 Firm Regn No. 104607W Mumbai, November 10, 2014

---

Sep 30, 2013

Report on Financial Statements

1. We have audited the accompanying financial statements of Gokak Textiles Limited ("the Company"), which comprise the Balance Sheet as at September 30, 2013, and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

3. 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.

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

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

Opinion

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at September 30, 2013;

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

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

Other Legal and Regulatory Requirements

7. As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditors'' Report) Order

(Amendment) Order 2004, 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.

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

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

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us. The Brach Auditor''s report has been forwarded to us and has been appropriately dealt with.

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 and with audited returns from the branches.

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956, to the extent applicable;

e. On the basis of written representations received from the directors as on September 30, 2013, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on September 30, 2013, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956.

Referred to in Paragraph 7 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date on the accounts of Gokak Textiles Limited for the year ended September 30, 2013

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

(ii) The Company has a program for physical verification of fixed assets at periodic intervals. As informed to us the fixed assets have been verified by the Company during the year and were informed that no material discrepancies were noticed.

(iii) In our opinion, the fixed assets disposed off during the year were not substantial and do not affected the going concern status of the Company.

2) (i) The Management has conducted physical verification of inventory at reasonable intervals.

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

(iii) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3) (a) As informed, the Company has not granted any loan, secured/ unsecured to any Companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly the provisions of Para 4 clause (iii) (a) to (d) of the said order are not applicable.

(b) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered 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, there are adequate internal control procedures 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.

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

(b) In our opinion and according to the information and explanations given to us, having regard to the explanation that many of the items are of a special nature and their prices cannot be compared with alternative quotations, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6) During the year under audit, the Company has not accepted fixed deposits from the public.

7) The Company has an internal audit system, which in our opinion is commensurate with the size of the Company the nature of its business.

8) We have broadly reviewed the books of account maintained by the Company in respect of cost records as prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribe accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) (a) According to the records examined by us, the Company is generally regular in depositing undisputed statutory dues including

Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other statutory dues applicable to it with the appropriate authorities.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service tax, Excise Duty or cess outstanding on account of any dispute other than following:

Name of Statute Amount Period to which the amount Forum where dispute is pending (Rs.) relates

Entry Tax 14,458,194 October 2004 to March 2007 High court of Karnataka Bangalore

Income tax 300,912 2001-02 & 2002-03 CIT (A)

Excise Duty 5,562,848 July 2004 to April 2010 High court of Karnataka Bangalore

Provident Fund 2,810,682 January 1990 to December 2001 Employees Provident Fund Appelate Tribunal Exice Duty 11,037,577 December 2004 to May 2005 Supreme Court of India 34,170,213

10) The Company has accumulated losses not exceeding fifty percent of the net worth as at the end of the financial year and has incurred cash losses in the current financial year, however the Company has not incurred cash losses in the immediately preceding financial period.

11) According to the records of the Company examined by us and the information and explanations given to us by the Company and the branch auditor, the Company has not defaulted in repayment of dues to a bank or a financial institution.

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

13) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.

14) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures or investments. Accordingly clause 4 (xiv) of the order is not applicable to the Company.

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 except investments in Gokak Power and Energy Limited (a subsidiary company), equivalent to 14,700,000 shares at a carrying cost ofRs.1, 470 lacs have been pledged with a bank against loan obtained by the said subsidiary Company.

16) According to the information and explanations given to us and the records examined by us, the Company has applied the term loans for the purpose for which the loans were obtained.

17) On the basis of an overall examination of the balance sheet and cash flows of the Company and the information and explanations given to us, we report that the Company has not utilized the funds raised on short-term basis for long-term investment.

18) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section301 of the Companies Act, 1956.

19) The Company did not issue any debentures during the year.

20) The Company has not raised any money through a public issue during the year.

21) Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For and on behalf of

Kalyaniwalla & Mistry

Chartered Accountants

Firm Regn No. 104607W

Vinayak M Padwal

Mumbai, Partner

November 07, 2013. Membership No. 49639

---

Sep 30, 2012

1. We have audited the attached Balance Sheet of Gokak Textiles Limited as at September 30, 2012 and the Statement of Profit and Loss and the Cash Flow Statement of the Company for the eighteen months ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditors' Report) Order (Amendment) Order 2004, 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. Further to our comments in the Annexure referred to in paragraph (3) above, we report that:

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us. The Branch Auditor's Report has been forwarded to us and has been appropriately dealt with.

c) The Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the branches.

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

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at September 30, 2012,

ii) in the case of the Statement of Profit and Loss, of the profit for the eighteen months ended on that date, and

iii)in the case of Cash Flow Statement, of the cash flows for the eighteen months ended on that date.

5. On the basis of the written representations received from the Directors as on September 30, 2012, and taken on record by the Board of Directors, we report that, none of the Director is disqualified as on September 30, 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Referred to in Paragraph (3) of our report of even date on the accounts of Gokak Textiles Limited

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

(ii) The Company has a program for physical verification of fixed assets at periodic intervals. As informed to us the fixed assets have been verified by the Company during the year and were informed that no material discrepancies were noticed.

(iii) The fixed assets disposed off during the year, in our opinion, constitute 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) (i) The Management has conducted physical verification of inventory at reasonable intervals.

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

(iii) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3) (a) As informed, the company has not granted any loan, secured/ unsecured to any Companies, firms or parties covered in the register

maintained under Section 301 of the Companies Act, 1956. Accordingly the provisions of Para 4 clause (iii) (a) to (d) of the said order are not applicable.

(b) The Company has taken loans amounting to Rs. 5,300 lac from a company covered in the register maintained under Section 301 of the Companies Act, 1956. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 5,300 lac and the year-end balance is Rs. Nil.

(c) In our opinion and according to the information and explanations given to us, the said loan is interest free and other terms and conditions of the loans taken by the Company, are not prejudicial to the interest of the Company.

(d) The loan has been paid on demand and there are no specific terms of repayment of principal hence whether the principal has been paid regularly or not cannot be commented upon.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

5) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are

of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, having regard to the explanation that many of the items are of a special nature and their prices cannot be compared with alternative quotations, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6) During the year under audit, the company has not accepted fixed deposits from the public.

7) The Company has an internal audit system, which in our opinion is commensurate with the size of the company the nature of its business.

8) We have broadly reviewed the books of account maintained by the Company in respect of cost records as prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribe accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) (a) According to the records examined by us, the Company is generally regular in depositing undisputed statutory dues including

Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other statutory dues applicable to it with the appropriate authorities.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service tax, Excise Duty or cess outstanding on account of any dispute other than following:

10) The Company has no accumulated losses as at the end of the financial period and it has not incurred any cash losses in the current period and in the immediately preceding financial year.

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

12) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.

13) In our opinion and according to the information and explanations given to us, the company is not dealing in or trading in shares, securities, debentures or investments. Accordingly clause 4 (xiv) of the order is not applicable to the Company.

14) 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.

15) According to the information and explanations given to us and the records examined by us, the Company has applied the term loans for the purpose for which the loans were obtained.

16) On the basis on an overall examination of the balance sheet and cash flows of the Company and the information and explanations given to us, we report that the Company has not utilized the funds raised on short-term basis for long-term investment.

17) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

18) The Company did not issue any debentures during the period.

19) The Company has not raised any money through a public issue during the period.

20) Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the period.

For and on behalf of

Kalyaniwalla & Mistry

Chartered Accountants

Firm Regn No. 104607W

Mumbai, Vinayak M Padwal

October 31, 2012. Partner

Membership No. 49639

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Gokak Textiles Limited as at March 31, 2011 and the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, annexed thereto. These financial statements are the responsibility of the 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 disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditors' Report) Order (Amendment) Order 2004, 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. Further to our comments in the Annexure referred to in paragraph (3) above, we report that:

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us. The Branch Auditor's Report has been forwarded to us and has been appropriately dealt with.

c) The Balance Sheet, Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the audited returns from the branches.

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

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2011,

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

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

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

ANNEXURE TO THE AUDITORS' REPORT

Referred to in Paragraph (3) of our report of even date on the accounts of Gokak Textiles Limited for the year ended 31st March, 2011.

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

(ii) The Company has a program for physical verification of fixed assets at periodic intervals. As informed to us the fixed assets have been verified by the Company during the year and were informed that no material discrepancies were noticed.

(iii) In our opinion and according to the information and explanations given to us, substantial part of the fixed assets has not been disposed off by the Company during the year.

2) (i) The Management has conducted physical verification of inventory at reasonable intervals.

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

(iii) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3) The Company has neither granted nor taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Hence clause iii(b), iii(c), iii(d), iii(f) and iii(g) are not applicable.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

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

(b) In our opinion and according to the information and explanations given to us, having regard to the explanation that many of the items are of a special nature and their prices cannot be compared with alternative quotations, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6) During the year under audit, the company has not accepted fixed deposits from the public.

7) The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and the nature of its business.

8) We have broadly reviewed the books of account maintained by the Company in respect of cost records as prescribed by the Central Government under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribe accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) (a) According to the records examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid statutory dues were outstanding, at the year end for a period of more than six months from the date they became payable except Rs.302,245 on account of Service Tax.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service tax, Excise Duty or cess outstanding on account of any dispute other than following:

Name of Statute Amount Period to which the Forum where dispute (Rs.) amount is pending relates

Entry Tax 14,458,194 Oct,04 to Mar,07 High court of Karnataka Bangalore

Income tax 300,912 2001-02 & 2002-03 CIT (A)

Excise Duty 5,938,424 July,04 to April,10 High court of Karnataka Bangalore 20,697,530

10) The Company's accumulated losses at the end of the financial year are not in excess of fifty percent of its net worth. The Company has not incurred cash losses during the financial year, however the company incurred cash losses in the immediately preceding financial year.

11) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

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

13) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.

14) 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.

15) According to the information and explanations given to us and the records examined by us, the Company has applied the term loans for the purpose for which the loans were obtained.

16) On the basis on an overall examination of the balance sheet and cash flows of the Company and the information and explanations given to us, we report that the Company has not utilized the funds raised on short-term basis for long-term investment.

17) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

18) The Company did not issue any debentures during the year.

19) The Company has not raised any money through a public issue during the year.

20) Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

21) In our opinion and according to information and explanation given to us, clause 4(xiv) is not applicable.

For and on behalf of Kalyaniwalla & Mistry Chartered Accountants Firm Regn No. 104607W

Vinayak M Padwal Partner Membership No. 49639

Mumbai, May 26, 2011

---

Mar 31, 2010

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

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

3. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) Order (Arrendment) Order 2004, issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956, we give in the Ainexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of the books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us. The Branch Auditors Report has been forwarded to us and has been appropriately dealt with.

c) The Balance Sheet and the Profit and Loss Account dealt with by this report are in agreement with the books of account and with the audited returns from the branches.

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

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

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

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

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

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

ANNEXURE TO THE AUDITORS REPORT Referred to in Paragraph (3) of our report of even date on the accounts of Gokak Textiles Limited for the year ended 31st March, 2010.

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

(ii) The Company has a program for physical verification of fixed assets at periodic intervals. As informed to us the fixed assets have been verified by the Company during the year and were informed that no material discrepancies were noticed.

(iii) In our opinion and according to the information and explanations given to us, substantial part of the fixed assets has not been disposed off by the Company during the year.

2) (i) The Management has conducted physical verification of inventory at reasonable intervals.

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

(iii) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between physical inventories and book records were not material in relation to the operations of the Company and the same have been properly dealt with in the books of account.

3) The Company has neither granted nor taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Hence clause iii(b), iii(c), iii(d), iii(f) and iii(g) are not applicable.

4) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

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

(b) In our opinion and according to the information and explanations given to us, having regard to the explanation that many of the items are of a special nature and their prices cannot be compared with alternative quotations, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6) During the year under audit, the company has not accepted fixed deposits from the public.

7) The Company has an internal audit system, which in our opinion is commensurate with the size of the Company and the nature of its business.

8) We have broadly reviewed the books of account maintained by the Company in respect of cost records as prescribed by the Central Government under section 209(1 )(d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribe accounts and records have been maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9) (a) According to the records examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, cess and other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid statutory dues were outstanding, at the year end for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Service tax, Excise Duty or cess outstanding on account of any dispute other than following:

Name of Statute Amount Period to which the amount Forum where dispute is pending (Rs.) relates

Entry Tax 14,458,194 Oct,04 to Mar,07 High court of Karnataka Bangalore

Income tax 300,912 2001-02 & 2002-03 CIT (A)

Excise Duty 105,879,080 July,04 to Feb,06 High court of Karnataka Bangalore 120,638,186

10) In our opinion and according to the records produced before us the company has been registered for a period of less than five years and hence the clause (x) is not applicable.

11) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

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

13) In our opinion and according to the information and explanations given to us, the nature of activities of the Company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.

14) According to the information and explanations given to us and the records examined by us, it is our opinion that the terms and conditions of the guarantees given by the Company for loans taken by others from banks or financial institutions are not prejudicial to the interest of the Company.

15) According to the information and explanations given to us and the records examined by us, the Company has applied the term loans for the purpose for which the loans were obtained.

16) On the basis on an overall examination of the balance sheet and cash flows of the Company and the information and explanations given to us, we report that the Company has not utilized the funds raised on short-term basis for long-term investment.

17) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

18) The Company did not issue any debentures during the year.

19) The Company has not raised any money through a public issue during the year.

20) Based on the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

21) In our opinion and according to information and explanation given to us, clause 4(xiv) is not applicable.

For and or behalf of Kalyaniwalla & Mistry

Chartered Accountants

Mumbai, Vinayak M Padwal

May 27, 2010 Partner

Membership No. 49639 Firm Regn No. 104607W