Auditor Report of Mafatlal Industries Ltd.

Mar 31, 2025

1. We have audited the accompanying standalone
financial statements of Mafatlal Industries
Limited ("the Company”), which comprise the
Standalone Balance Sheet as at March 31,
2025, and 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 then ended, and notes to
the standalone financial statements, including
material accounting policy information and other
explanatory information.

2. In our opinion and to the best of our information
and according to the explanations given to us,
the aforesaid standalone financial statements
give the information required by the Companies
Act, 2013 ("the Act”) in the manner so required
and give a true and fair view in conformity with
the accounting principles generally accepted in
India, of the state of affairs of the Company as at
March 31,2025, and total comprehensive income
comprising of profit and other comprehensive
income, changes in equity and its cash flows for
the year then ended.

Basis for Opinion

3. We conducted our audit 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 together with the ethical 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 Code of Ethics. We
believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for
our opinion.

Emphasis of matter

4. We draw attention to Note 49(b) to the standalone
financial statements relating to the National
Company Law Tribunal, Ahmedabad (''NCLT'') order
dated April 29, 2024 (the ''NCLT order'') approving a
Scheme of reduction and reorganisation of capital
(the ''Scheme'') with an Appointed / Effective date
of March 31, 2024, against which the Company
had filed an interlocutory application with NCLT
seeking modification to reinstate the Appointed
date of April 01, 2022 in the NCLT order, in
accordance with the Scheme filed on October
10, 2023. The aforesaid interlocutory application
was heard by the NCLT on June 13, 2024 where
the Company additionally filed an application
seeking change in the Appointed Date to March
31, 2023. The NCLT, vide its order dated June 27,
2024, has allowed the Appointed date of March
31,2023, and consequently, the accounting effect
to the reserves and surplus balances has been
given in the standalone financial statements for
the year ended March 31,2025. Our opinion is not
modified in respect of this matter.

Key audit matter

5. 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. These
matters were addressed in the context of our
audit of the standalone financial statements as
a whole and in forming our opinion thereon, and
we do not provide a separate opinion on these
matters.

Key audit matter	How our audit addressed the key audit matter
Assessment of recoverability of deferred tax	Our audit procedures included the following:
assets:	• Evaluation of the design and testing operating
Refer Note 36(e) to the standalone financial	effectiveness of Company''s controls relating to the
statements.	assessment of carrying amount of DTA.
The Company has recognised Deferred Tax	• Assessed the appropriateness of the Company''s
Assets (''DTA'') on temporary differences including	accounting policy in respect of recognizing DTA on
accumulated losses and unabsorbed depreciation	temporary differences including accumulated losses
as it is considered to be recoverable based on the	and unabsorbed depreciation.
Company''s projected taxable profits in the forecast	• Obtained the future taxable profit projections prepared
period. The carrying value of DTA (net) is '' 59.69	by the management and assessed the reasonableness
crores as at March 31,2025.	of the assumptions used in such preparation and
We considered this a key audit matter because	compared actual results to management''s historical
significant judgement is required by the Company in	forecasts.
determining the recoverability of DTA recognised as	• Verified the mathematical accuracy of the calculations
the realisation of tax benefits is dependent on future	underlying the profit projections.
taxable profits and there are inherent uncertainties	• Assessed the appropriateness of tax rate applied to the
involved in forecasting such profits.	future taxable profits. • Evaluated whether the taxable temporary differences, on which DTA is recognised, has been assessed by the tax authorities and is available for utilisation in accordance with the provisions of the Income-tax Act, 1961. • Assessed the adequacy of disclosures made in the standalone financial statements with regard to deferred taxes.

Other Information

6. The Company''s Board of Directors is responsible
for the other information. The other information
comprises the information included in the
annual report, but does not include the financial
statements and our auditor''s report thereon. The
annual report is expected to be made available to
us after the date of this auditor''s report.

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

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

or otherwise appears to be materially misstated.
When we read the annual report, if we conclude
that there is a material misstatement therein, we
are required to communicate the matter to those
charged with governance and take appropriate
action as applicable under the relevant laws and
regulations.

Responsibilities of management and those charged
with governance for the standalone financial
statements

7. 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, changes in equity and cash flows of
the Company in accordance with the accounting
principles generally accepted in India, including

the Indian Accounting Standards specified under
Section 133 of the Act. This responsibility also
includes maintenance of adequate accounting
records in accordance with the provisions of
the Act for safeguarding of the assets of the
Company and for preventing and detecting frauds
and other irregularities; selection and application
of appropriate accounting policies; making
judgments and estimates that are reasonable
and prudent; and design, implementation and
maintenance of adequate internal financial
controls, that were operating effectively for
ensuring the accuracy and completeness of the
accounting records, relevant to the preparation
and presentation of the standalone financial
statements that give a true and fair view and are
free from material misstatement, whether due to
fraud or error.

8. In preparing the standalone financial statements,
Board of Directors 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 Board of Directors
either intends to liquidate the Company or to
cease operations, or has no realistic alternative
but to do so.

9. Those Board of Directors are also responsible
for overseeing the Company''s financial reporting
process.

Auditor''s responsibilities for the audit of the

standalone financial statements

10. 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.

11. 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 control.

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

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

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

are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence
obtained up to the date of our 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 standalone financial statements
represent the underlying transactions
and events in a manner that achieves fair
presentation.

12. 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.

13. 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.

14. From the matters communicated with those
charged with governance, we determine those
matters that were of most significance in the
audit of the standalone financial statements
of the current period and are therefore the key
audit matters. We describe these matters in our
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

15. 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 B a statement on the matters specified
in paragraphs 3 and 4 of the Order, to the extent
applicable.

16. 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 paragraph 16(h)(vi)
below on reporting under Rule 11(g) of the
Companies (Audit and Auditors) Rules, 2014
(as amended).

(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 specified under
Section 133 of the Act.

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

(f) With respect to the maintenance of
accounts and other matters connected
therewith, reference is made to our remarks
in paragraph 16(b) above on reporting under
Section 143(3)(b) and paragraph 16(h)(vi)
below on reporting under Rule 11(g) of the

Companies (Audit and Auditors) Rules, 2014
(as amended).

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

(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 financial statements -
Refer Notes 43 and 50 to the standalone
financial statements;

ii. The Company was not required to
recognise a provision as at March 31,
2025 under the applicable law or Indian
Accounting Standards, as it does not
have any material foreseeable losses
on long-term contract. The Company
did not have any derivative contracts
as at March 31, 2025.

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

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
person or entity, 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 (Refer Note 53(vi)
to the standalone financial

statements);

(b) The management has

represented that, to the best
of its knowledge and belief, no
funds have been received by the
Company from any person or
entity, 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 (Refer Note 53(vi)
to the standalone financial

statements); and

(c) Based on such audit procedures
that we considered reasonable and
appropriate in the circumstances,
nothing has come to our notice
that has caused us to believe that
the representations under sub¬
clause (a) and (b) contain any
material misstatement.

v. The interim dividend declared and paid
by the Company during the year is in
compliance with Section 123 of the Act.

As stated in Note 17(a) to the
standalone financial statements, the
Board of Directors of the Company

has proposed final dividend for the
year which is subject to the approval
of the members at the ensuing Annual
General Meeting. The dividend declared
is in accordance with section 123 of the
Act to the extent it applies to declaration
of dividend.

vi. Based on our examination, which
included test checks, the Company
has used accounting software for
maintaining its books of account which
has a feature of recording audit trail
(edit log) facility and that has operated
throughout the year for all relevant
transactions recorded in the software,
except that the audit trail is not
maintained in case if any modification
is done by certain users with specific
access, for certain records and the
audit trail is not maintained for direct
database changes. During the course
of performing our procedures, other
than the aforesaid instances of audit
trail not maintained where the question

of our commenting does not arise, we
did not notice any instance of audit trail
feature being tampered with. Further,
the audit trail, to the extent maintained
in the prior year, has been preserved
by the Company as per the statutory
requirements for record retention.

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

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N / N500016

Pankaj Khandelia

Partner

Membership Number: 102022

UDIN: 25102022BMOKWB3172

Place: Mumbai

Date: May 13, 2025

---

Mar 31, 2024

1. We have audited the accompanying standalone financial statements of Mafatlal Industries Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31,2024, 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 then ended, and notes to the standalone financial statements, including material accounting policy information and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2024, total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.

Basis for Opinion

3. We conducted our audit 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 together with

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

Emphasis of matter

4. We draw attention to Note 49(b) to the standalone financial statements relating to the National Company Law Tribunal, Ahmedabad (''NCLT’) order dated April 29, 2024 (the ''NCLT order’) approving a Scheme of reduction and reorganization of capital (the ''Scheme’) with an Appointed/ Effective date of March 31, 2024, against which the Company has filed an interlocutory application with NCLT seeking modification to reinstate the Appointed date of April 1, 2022 in the NCLT order, in accordance with the Scheme filed on October 10, 2023. The NCLT order with respect to the interlocutory application is awaited. The Company proposes to give the accounting effect prescribed in the Scheme on receiving the approval for the aforesaid interlocutory application from the NCLT.

Our opinion is not modified in respect of this matter.

Key audit matters

5. 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. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

How our audit addressed the key audit matter

Assessment of impairment of Property, Plant and Equipment: [Refer Note 3(a) in the standalone financial statements] The carrying value of Property, Plant and Equipment (Assets) is '' 79.77 Crores as at March 31,2024 which is significant to the Standalone Balance Sheet. The Management has assessed the indications for impairment of Assets considering internal and external sources of information, as per Ind AS 36 - Impairment of Assets. For the purposes of impairment testing, the carrying value of the Assets was compared to the recoverable amount of the Assets. The Company has applied fair value less costs of disposal method in determining the recoverable value of the Assets. The Management has engaged an external registered valuer to determine the fair value of immovable properties, and the

We have performed audit procedures which included the following: • Obtained understanding, evaluated and tested the design and operating effectiveness of the Company’s relevant controls relating to impairment assessment including determining recoverable value of Assets. • Examined the report issued by the external registered valuer engaged by the Management. • Evaluated the independence, competence, capabilities and objectivity of the external registered valuer engaged by the Management for valuation of immovable properties. • Engaged auditor’s valuation experts to assess appropriateness of valuation methodology. • Tested the accuracy and appropriateness of input data. • Evaluated the reasonableness of assumptions applied by Management, in determining the fair value of other assets.

Key audit matter

How our audit addressed the key audit matter

determination of fair value of other assets involved Management’s assumptions, judgement and estimates. Based on the assessment, the Management has concluded that no impairment was required as of March 31,2024. The assessment of impairment of the Assets is considered to be a key audit matter as the assessment involves significant judgement, involvement of valuation experts and estimates made by the Management.

• Verified the mathematical accuracy of underlying calculations of recoverable amount and compared with the carrying value of Assets. • Performed sensitivity analysis over the key assumptions, to assess the range of possible outcomes for recoverable value of Assets and the potential impact on impairment results. • Evaluated the adequacy of the presentation and disclosures of the Assets made in the financial statements. Based on the above procedures performed by us, we found the Management’s assessment of carrying value of Assets to be reasonable.

Other Information

6. The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements and our auditor’s report thereon. The annual report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the standalone financial statements does not cover the other information and we will 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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

Responsibilities of management and those charged with

governance for the standalone financial statements

7. 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, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments

and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

8. 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. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor''s responsibilities for the audit of the standalone

financial statements

9. 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.

10. 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 control.

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

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

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

11. 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.

12. 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.

13. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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

14. 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 B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

15. 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) I n 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 matter stated in paragraph 15(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).

(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 Accounting Standards specified under Section 133 of the Act.

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

(f) With respect to the maintenance of accounts and other matters connected therewith, reference is made to our remarks in paragraph 15(b) above on reporting under Section 143(3)(b) and paragraph 15(h)(vi) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 (as amended).

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

(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 Notes 43 and 50 to the standalone financial statements.

ii. The Company was not required to recognize a provision as at March 31,2024 under the applicable law or accounting standards, as it does not have any material foreseeable losses on long-term contract. The Company did not have any derivative contracts as at March 31,2024.

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

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

best of its knowledge and belief, as disclosed in Note 53(vi) to the standalone financial statements, 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 person or entity, 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, as disclosed

in the Note 53(vi) to the standalone financial statements, no funds have been received by the Company from any person or entity, 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 such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) 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 which has a feature of recording audit trail (edit log) facility and that has operated throughout the year for all relevant transactions recorded in the software except that audit trail was not available in case of modification with certain specific functionality in the application and for direct database changes. Further, during the course of performing our procedures, we did not notice any instance of audit trail feature being tampered with in cases where the audit trail feature was enabled.

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

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016

Pankaj Khandelia

Partner

Membership Number: 102022

UDIN: 24102022BKFNYW7808

Place: Mumbai

Date: May 27, 2024

---

Mar 31, 2023

Mafatlal Industries Limited

Report on the audit of the standalone financial statements

Opinion

1. We have audited the accompanying standalone financial statements of Mafatlal Industries Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31,2023, 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 then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, total comprehensive income (comprising of profit and other comprehensive income), changes in equity and its cash flows for the year then ended.

Basis for Opinion

3. We conducted our audit 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 together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key audit matters

4. 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. These matters were addressed in the context of our audit of the standalone financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

How our audit addressed the key audit matter

Assessment of recoverability of deferred tax assets Refer Note 36(e) to the standalone financial statements. The Company has recognised Deferred Tax Assets (DTA) on temporary differences and unabsorbed depreciation as it is considered to be recoverable based on the Company’s projected taxable profits in the forecast period. The carrying value of DTA (net) is '' 498.11 Lakhs as at March 31,2023. We considered this a key audit matter because significant judgement is required by the Company in determining the recoverability of DTA recognised on unabsorbed depreciation as the realisation of tax benefits is dependent on future taxable profits and there are inherent uncertainties involved in forecasting such profits.

Our audit procedures included the following • Evaluation of the design and testing operating effectiveness of Company’s controls relating to the assessment of carrying amount of deferred tax assets. • Assessed the appropriateness of the Company’s accounting policy in respect of recognizing deferred tax assets on unabsorbed depreciation and temporary differences. • Obtained the future taxable profit projections prepared by the management and performed enquiries to understand the assumptions used in such preparation. • Assessed the appropriateness of tax rate applied to the taxable profit forecasts. • Evaluated whether the unabsorbed depreciation, on which deferred tax asset is recognised, has been assessed by the tax authorities and is available for utilisation in accordance with the provisions of the Income-tax Act, 1961. • Verified the mathematical accuracy of the calculations underlying the profit projections. • Assessed the adequacy of disclosures made in the standalone financial statements with regard to deferred taxes. • Verified the income tax computation for the current year resulting in a reversal of the deferred tax assets from the previous year. Based on the above procedures, Management’s assessment of recoverability of deferred tax assets was considered to be reasonable.

Other Information

5. The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the annual report, but does not include the standalone financial statements and our auditor’s report thereon. The annual report is expected to be made available to us after the date of this auditor’s report.

Our opinion on the standalone financial statements does not cover the other information and we will 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 identified above when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the annual report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take appropriate action as applicable under the relevant laws and regulations.

Responsibilities of management and those charged with

governance for the standalone financial statements

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

7. 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. Those Board of Directors are also responsible for overseeing the Company’s financial reporting process.

Auditor''s responsibilities for the audit of the standalone

financial statements

8. 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.

9. 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 control.

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

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

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

10. 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.

11. 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.

12. From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our 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

13. 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 B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

14. 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 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 accounting standards specified under Section 133 of the Act.

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

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

(g) With respect to the other matters to be included in the 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 Notes 43 and 50 to the standalone financial statements.

ii. The Company was not required to recognise a provision as at March 31,2023 under the applicable law or accounting standards, as it does not have any material foreseeable losses on long-term contracts. The Company did not have any derivative contracts as at March 31,2023.

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

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 person or entity, 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 [Refer Note 53(vi) to the standalone financial statements];

(b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person or entity, 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 [Refer Note 53(vi) to the standalone financial statements]; and

(c) Based on such audit procedures that we considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.

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

vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (as amended), which provides for books of account to have the feature of audit trail, edit log and related matters in the accounting software used by the Company, is applicable to the Company only with effect from financial year beginning April 01, 2023, the reporting under clause (g) of Rule 11 of the Companies (Audit and Auditors) Rules, 2014 (as amended), is currently not applicable.

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

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N / N500016

Pankaj Khandelia

Partner

Membership Number: 102022 UDIN: 23102022BGTWNJ8292

Place: Mumbai Date: May 30, 2023

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Mar 31, 2018

INDEPENDENT AUDITORS'' REPORT

TO THE MEMBERS OF Mafatlal Industries Limited

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

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

Management''s Responsibility for the Standalone Ind AS Financial Statements

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

Auditors'' Responsibility

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

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

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

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

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

Opinion

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

Other Matter

9. The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 01, 2016 included in these standalone Ind AS financial statements, are based on the previously issued statutory standalone financial statements for the years ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by the predecessor auditor who expressed an unmodified opinion vide reports dated May 5, 2017 and May 2, 2016 respectively. The adjustments to those standalone financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us. Our report is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

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

(i) The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its standalone Ind AS financial statements - Refer Note 42 and 49;

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

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

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

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N-500016
	Priyanshu Gundana
Mumbai	Partner
Date: May 3, 2018	Membership Number: 109553

Annexure A to Independent Auditors'' Report

Referred to in paragraph 11 (f) of the Independent Auditors'' Report of even date to the members of Mafatlal Industries Limited on the standalone Ind AS financial statements for the year ended March 31, 2018

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section 143 of the Act

1. We have audited the internal financial controls over financial reporting of Mafatlal Industries Limited ("the Company") as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

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

Auditors'' Responsibility

3. Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing 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.

4. 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

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

Meaning of Internal Financial Controls Over Financial Reporting

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

7. 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

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

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N-500016
	Priyanshu Gundana
Mumbai	Partner
Date: May 3, 2018	Membership Number: 109553

Annexure B to Independent Auditors'' Report

Referred to in paragraph 10 of the Independent Auditors'' Report of even date to the members of Mafatlal Industries Limited on the standalone Ind AS financial statements as of and for the year ended March 31, 2018

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

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

(c) The title deeds of immovable properties, other than self constructed properties, as disclosed in Note 3 and 4 on Property Plant and Equipment and Investment Properties respectively, to the standalone Ind AS financial statements, are held in the name of the Company, except for a lease hold land of gross and net book value of Rs. 0.08 Lakhs, where the Company is in process of getting expired lease term renewed.

The physical verification of inventory excluding stocks with third parties have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

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

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

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

Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, except for dues in respect of interest on employees'' state insurance and duty of excise which has not been deposited with appropriate authorities, the Company is regular in depositing undisputed statutory dues, including provident fund, employees'' state insurance, income tax, sales tax, service tax, duty of customs, value added tax, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities. The extent of the arrears of statutory dues outstanding as at March 31, 2018, for a period of more than six months from the date they became payable are as follows:

Name of the statute	Nature of dues	Amount (Rs.in lakhs)	Period to which the amount relates	Due date	Date of Payment
Employees'' State Insurance Act, 1948	Interest on ESIC	40.85	2000-2007 and April 2008 to May 2010	2000 to 2007 and 2008 to 2010	Not paid
Central Excise Act, 1944	Central Excise	3.44	April 1986 to October 1986, May 1995 to December 1995	1986 and 1995	Not paid

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

Name of the statute	Nature of dues	Amount under dispute not yet deposited (Rs. In lakhs) #	Period to which the amount relates	Forum where the dispute is pending
Central Excise Act, 1944	Central Excise	13.41	1998-2000,2002-03	Supreme Court
Central Excise Act, 1944	Central Excise	57.67	2003-04	High Court
Central Excise Act, 1944	Central Excise	196.72	1989-90 to 2003-04	Commissioner of Central Excise (Appeals)
Central Excise Act, 1944	Central Excise	8.11	1999-2000	Commissioner of Central Excise
Central Excise Act, 1944	Central Excise	2,820.83	1997-99, 2007-08 to 2009-10	Appellate Tribunal
Central Excise Act, 1944	Central Excise	1.41	2006-11	Assistant Commissioner of Central Excise
Customs Act, 1944	Customs Duty	4.79	1989-90 to 1999-2000	Joint Director General of Foreign Trade
Maharashtra Value Added Tax	Sales Tax	23.22	1989-90 to 1999-2000	Joint Commissioner of Sales Tax (Appeals)- II
Central Sales Tax Act, 1956	Sales Tax	0.92	1989-90 to 1999-2000	Joint Commissioner of Sales Tax (Appeals)- II
Finance Act, 1994	Service Tax	0.70	1997-99	Appellate Tribunal
Income Tax Act, 1961	Income Tax	481.49	Assessment Years 2003-04, 2004-05, 2006-07, 2007-08	Income tax Appellate Tribunal
Income Tax Act, 1961	Income Tax	994.77	Assessment Years 1997-98, 2012-13 and 2015-16	Commissioner of Income Tax

# Net of amounts paid under Protest

8. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government. The Company has not issued any debentures.

9. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

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

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

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

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

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

15. The Company has not entered into any non-cash transactions with its directors or persons connected with him as prescribed under section 192 of the Act. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

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

For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N-500016
	Priyanshu Gundana
Mumbai	Partner
Date: May 3, 2018	Membership Number: 109553

---

Mar 31, 2017

To The Members of Mafatlal Industries Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of MAFATLAL INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as at 31^st March, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''s branches located at Ahmedabad and Nadiad.

Management''s Responsibility for the Standalone Financial Statements

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

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

Auditor''s Responsibility

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

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

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

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

We believe that the audit evidence obtained by us and the audit evidence obtained by the branch auditors in terms of their reports referred to in the Other Matter paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, and based on the consideration of reports of the branch auditors on separate financial information of the branches referred to in the Other Matter paragraph below, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31^st March, 2017, and its loss and its cash flows for the year ended on that date.

Other Matter

We did not audit the financial information of two branches included in the standalone financial statements of the Company whose financial information reflect total assets of Rs. 31,342.78 lakhs as at 31st March, 2017 and total revenues of Rs. 33,508.94 lakhs for the year ended on that date, as considered in the standalone financial statements. The financial information of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches and our report in terms of subsection (3) of Section 143 of the Act, in so far as it relates to the aforesaid branches, is based solely on the report of such branch auditors.

Our opinion on the standalone financial statements and our report on Other Legal and Regulatory Requirements below is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act, based on our audit and on the consideration of the reports of the branch auditors on the separate financial information of the branches, referred to in the Other Matter paragraph above we report, to the extent applicable that:

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

b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

c) The reports on the accounts of the branch offices of the Company audited under Section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d) 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 returns received from the branches not visited by us.

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

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

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

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. Also refer Note no. 31.1 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the standalone financial statements as regards its holding and dealings in Specified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8^th November, 2016 of the Ministry of Finance, during the period from 8^th November, 2016 to 30^th December, 2016; and such disclosures are in accordance with the books of accounts maintained by the Company.

2. As required by the Companies (Auditor''s Report) Order,

2016 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

ANNEXURE "A" TO THE INDEPENDENT AUDITOR''S REPORT ON THE FINANCIAL STATEMENTS OF MAFATLAL INDUSTRIES LIMITED

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) 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 Mafatlal Industries Limited ("the Company") as of March 31, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date which includes internal financial controls over financial reporting of the Company''s branches.

Management''s Responsibility for Internal Financial Controls

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

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

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

We believe that the audit evidence we have obtained and the audit evidence obtained by the branch auditors of branches located in India, in terms of their reports referred to in the Other Matter paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting

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

Opinion

In our opinion, to the best of our information and according to the explanations given to us and based on the consideration of the reports of the branch auditors on internal financial controls system over financial reporting of the branches referred to in the Other Matter paragraph below, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Other Matter

Our aforesaid report under Section 143(3)(i) of the Act on the adequacy and operating effectiveness of the internal financial controls over financial reporting insofar as it relates to two branches located in India, is based on the corresponding reports of the branch auditors.

Our opinion is not modified in respect of this matter.

ANNEXURE "B" TO THE independent AUDITORS'' REPORT 0N THE FINANCIAL STATEMENTS OF MAFATLAL INDUSTRIES LIMITED

(Referred to in paragraph 2, under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

(i) In respect of its fixed assets:

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

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

(c) With respect to immovable properties of acquired land and buildings that are freehold and leasehold, according to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed / transfer deed / conveyance deed / lease deed / court orders approving schemes of arrangements / amalgamations provided to us, we report that, the title deeds of such immovable properties are held in the name of the Company as at the balance sheet date.

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

(iii) According to the information and explanations given to us, the Company has granted loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013, in respect of which:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company''s interest.

(b) The schedule of repayment of principal and payment of interest has not been stipulated and in the absence of such schedule, we are unable to comment on the regularity of the repayments or receipts of principal amounts and interest.

(c) There is no overdue amount remaining outstanding as at the year-end.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013 in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year.

(vi) The maintenance of cost records has been specified by the Central Government under section 148(1) of the Companies Act, 2013. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

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

(a) The Company has generally been regular in depositing undisputed statutory dues, including

Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Value Added Tax, Service Tax, Customs Duty, Excise Duty, cess and other material statutory dues applicable to it to the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees ‘State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Value Added Tax, cess and other material statutory dues in arrears as at 31^stMarch, 2017 for a period of more than six months from the date they became payable. As at the year end, the arrears of Statutory Dues outstanding for a period of more than six months aggregate to '' 49.02 lakhs in respect of interest on Employees State Insurance dues, Rs. 3.34 lakhs in respect of Excise Duty and Rs. 297.77 lakhs in respect of interest on water charges.

(c) Details of dues of Income-tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, and Value Added Tax which have not been deposited as on 31^st March, 2017 on account of disputes are given below:

Name of Statute	Nature of Dues Forum where Dispute is period to which the Amount Amount pending Relates Involved (Rs. in lakhs)
Central Excise Act, 1944	Excise Duty	Assistant Commissioner	2006-07 to 2010-11	1.42
Central Excise Act, 1944	Excise Duty	Commissioner	1989-90 to 2003-04	74.58
Central Excise Act, 1944	Excise Duty	CESTAT	1989-90 to 2003-04	63.44
Central Excise Act, 1944	Excise Duty	High Court	1989-90 to 2003-04	14.99
Central Excise Act, 1944	Excise Duty	Supreme Court	1989-90 to 1999-2000	13.42
Central Excise Act, 1944	Excise Duty	Assistant Commissioner	1989-90 to 2003-04	182.11
Central Excise Act, 1944	Excise Duty	Commissioner (Appeals)	1989-90 to 2003-04	54.92
Central Excise Act, 1944	Excise Duty	Commissioner of Central Excise	2007-08 to 2009-10	2,960.55
Customs Act, 1944	Custom Duty	Joint Director General of Foreign Trade	1989-90 to 1999-00	4.79
Bombay Industrial Relations Act, 1946	Labour Dues	Labour Court	1993 to 2013	608.70
Maharashtra Value Added Tax	Sales Tax	Joint Commissioner of Sales Tax (Appeals) - II	1989-90 to 1999-2000	3.22
Central Sales Tax Act, 1956	Sales Tax	Joint Commissioner of Sales Tax (Appeals) - II	1989-90 to 1999-2000	0.04
Mumbai Municipal Corporation Act, 1988	Property Tax [Refer Note No. 31.1(a) (viii)]	Assessor and Collector (City), Assessment and Collection Department	2000-05, 2004-07, 2008-10	3,489.44
Income Tax Act, 1961	Income Tax	Dy. Commissioner of Income Tax	Assessment Year 2012-13	9.48
Income Tax Act, 1961	Income Tax	ITAT	Assessment Years 2003-04, 2004-05, 2006-07, 2007-08	501.61
Income Tax Act, 1961	Income Tax	Commissioner of Income Tax	Assessment Years 1997-98, 1998-99, 2002-03, 2003-04, 2006-07, 2009-10, 2011-12 and 2012-13	1,925.44
Service Tax Rules	Service Tax	CESTAT, Ahmedabad	1997-99	0.70

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

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

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid/provided managerial remuneration in excess of the limits and approvals prescribed under section 197 read with Schedule V to the Companies Act, 2013 to the following managerial personnel:

Managerial Position	Excess amount of remuneration paid/ provided (Rs. in lakhs)	Financial year ending	Treatment of the excess remuneration in the respective year financial statements	Steps taken by the Company for securing refund
Managing Director	228.84	31st March, 2017	Charged to the Statement of Profit and Loss	Special Resolution will be passed at the ensuing Annual General Meeting.
Executive Director	27.56	31st March, 2017	Charged to the Statement of Profit and Loss	Special Resolution will be passed at the ensuing Annual General Meeting.
Director	149.86	31st March, 2017	Charged to the Statement of Profit and Loss	Special Resolution will be passed at the ensuing Annual General Meeting.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the CARO 2016 is not applicable.

(xiii)In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements etc. as required by the applicable accounting standards.

(xiv)During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

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

For Deloitte Haskins & Sells

Chartered Accountants

(Firm''s Registration Number 117364W)

(Ketan Vora)

Place: Mumbai (Partner)

Date: 5^th May, 2017 (Membership Number 100459)

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Mar 31, 2014

We have audited the accompanying financial statements of MAFATLAL INDUSTRIES LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''s branches at Ahmedabad and Nadiad.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit

procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Basis for Qualified Opinion

Attention is invited to Note no.30.5, regarding non – accounting of income from rent and other charges aggregating to Rs. 83.61 lacs upto 31st March, 2014 (Rs. 186.29 lacs upto 31st March, 2013) for the reasons stated therein which constitutes a departure from the Accounting Standard (AS)-1 ''Disclosure of Accounting Policies'' and Accounting Standard (AS)-9 ''Revenue Recognition'' referred to in Section 211(3C) of the Act; if the same is considered, rental income from investment property would be higher by aggregate amount of Rs. 83.61 lacs (aggregate upto 31st March 2013, Rs. 186.29 lacs), income tax, net profit and shareholder''s funds would have been increased by Rs. 17.53 lacs, Rs. 66.08 lacs and by Rs. 66.08 lacs respectively (previous year ended 31st March 2013: increased by Rs. 60.45 lacs, Rs. 125.84 lacs and by Rs. 125.84 lacs respectively). This matter was also qualified in our report on the financial statements for the year ended 31st March 2013.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Emphasis of Matter

We draw attention to Note no.30.13 to the financial statements regarding managerial remuneration for which the Central Government''s approval is required.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

(b) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.

(c) The reports on the accounts of the Ahmedabad and Nadiad branches audited by the branch auditors appointed under Section 228 of the Act have been forwarded to us and have been properly dealt with by us in preparing this report.

(d) 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 returns received from the branches not visited by us.

(e) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under the Act (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs).

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

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

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

(ii) In respect of its fixed assets:

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

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

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

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

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

(iv) 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.

In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs. 25.00 lacs to one party during the year. At the year-end, the outstanding balances of such loans granted aggregated Rs. 1,113.08 lacs (five parties) and the maximum amount involved during the year was Rs. 1,187.46 lacs (six parties).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Company.

(c) The receipts of principal amounts and interest have been as per stipulation.

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

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

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

(b) Where each of such transaction (excluding loans reported under paragraph (iv) above),is in excess of Rs. 5 lacs in respect of any party, having regard to our comments in paragraph (v) above, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, other than certain purchases which are of a special nature for which comparable quotations are not available and in respect of which we are, therefore, unable to comment if the transactions have been carried out at prices having regard to the prevailing market prices at the relevant time.

(vii) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year.

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

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

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

(a) The Company has generally been regular in depositing undisputed statutory dues, including Investor Education and Protection Fund, Income Tax, Wealth Tax, Customs Duty, Cess and other material

statutory dues applicable to it with the appropriate authorities and has not been regular in depositing interest on Provident Fund, interest on Employees'' State Insurance, Value Added Tax, Excise Duty, Gratuity, Interest on Water charges and Service Tax.

(b) There were no undisputed amounts payable in respect of Investor Education and Protection Fund, Income Tax, Wealth Tax, Customs Duty, Cess and other material statutory dues in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable. As at the year end, the arrears of statutory dues outstanding for a period of more than six months aggregate to Rs. 68.29 lacs in respect of interest on Provident Fund, Rs. 85.66 lacs in respect of interest on Employees'' State Insurance Dues, Rs. 0.36 lacs in respect of Value Added Tax (including interest), Rs. 3.34 lacs in respect of Excise Duty, Rs. 731.34 lacs in respect of Gratuity and Rs. 769.02 lacs in respect of interest on Water Charges.

(c) Details of dues of Excise Duty, Customs Duty, Labour dues, Sales Tax, Property Tax, Income Tax, Service Tax and Cess which have not been deposited as on 31st March, 2014 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is pending

Central Excise Act, 1944 Excise Duty Assistant Commissioner

Central Excise Act, 1944 Excise Duty Assistant Commissioner

Central Excise Act, 1944 Excise Duty Commissioner

Central Excise Act, 1944 Excise Duty Commissioner (Appeals)

Central Excise Act, 1944 Excise Duty CESTAT

Central Excise Act, 1944 Excise Duty High Court

Central Excise Act, 1944 Excise Duty Supreme Court

Central Excise Act, 1944 Excise Duty Commissioner of Central Excise

Customs Act, 1962 Custom Duty Joint Director General of Foreign Trade

Bombay Industrial Labour Dues Labour Court Relations Act, 1946

Maharashtra Value Sales Tax Joint Commissioner of Added Tax (including Sales Tax (Appeals) - II Interest of Rs 70.55 lacs)

Central Sales Tax Sales Tax Joint Commissioner of Act 1956 (including Sales Tax (Appeals) - II Interest of Rs 15.35 lacs)

Mumbai Municipal Property Tax Assessor and Collecto Corporation Act, 1988 (Refer Note no. (City), Assessment and 30.1(a)(ix)) Collection Departmen

The Income Tax Act,1961 Income Tax Commissioner of Income Tax

The Income Tax Act,1961 Income Tax Income Tax Appellate Tribunal

Service Tax Rules Service Tax CESTAT (Ahmedabad)

Name of Statute Period to which the Amount involved amount Relates (Rs in lacs)

Central Excise Act, 1944 1989-90 to 2003-04 251.80

Central Excise Act, 1944 2006-07 to 2010-11 1.42

Central Excise Act, 1944 1989-90 to 2003-04 2,224.25

Central Excise Act, 1944 1989-90 to 2003-04 54.92

Central Excise Act, 1944 1989-90 to 2003-04 54.10

Central Excise Act, 1944 1989-90 to 2003-04 14.99

Central Excise Act, 1944 1989-90 to 2003-04 13.42

Central Excise Act, 1944 2007-08 to 2009-10 2,960.55

Customs Act 1962 1989-90 to 1999-00 4.79

Bombay Industrial Relation 1993 to 2008 1,172.08 Act 1946

Maharashtra Value Added tax 1999-2000 90.94

Central Sales Tax Act 1956 1999-2000 21.74

Mumbai Municipal 2009-2014 4,266.34 Corporation Act 1988

The Income Tax Act 1961 Assessment Years 458.11 1997-98 to 1998-99, 2002-03 to 2004-05, 2006-07, 2009-10 and 2011 -12

The Income Tax Act 1961 Assessment Year 177.46 2003-04, 2006-07 and 2007-08

Service Tax Rules 1997-99 0.70

(xi) The Company does not have accumulated losses at the end of the financial year and the Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

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

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

(xiv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company. (Refer Note no. 30.1(b) on guarantee given for a subsidiary).

(xv) In our opinion and according to the information and explanations given to us, the term loans have been

applied by the Company during the year for the purposes for which they were obtained.

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

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

For DELOITTE HASKINS & SELLS Chartered Accountants (Firm''s Registration No. 117364W)

(R. Salivati) (Partner) (Membership No. 34004)

MUMBAI, 30th May, 2014

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of MAFATLAL INDUSTRIES LIMITED ("the Company”) which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''s branches at Ahmedabad and Nadiad Units / Branches audited by other auditors.

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

Auditors'' Responsibility

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

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

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

Basis for Qualified Opinion

1. Attention is invited to Note no. 30.8 which was also the subject matter of our report similarly qualified in the previous period, regarding non - accounting of rent/ recovery of expenses for the reasons stated therein which constitutes a departure from the Accounting Standard (AS) 1 ''Disclosure of Accounting Policies'' and Accounting Standard (AS) 9 ''Revenue Recognition'' referred to in Section 211(3C) of the Act; if the same is considered, rental income from investment property would be higher by aggregate amount of Rs. 186.29 lacs (aggregate upto 31st March 2012 Rs. 754.11 lacs), income tax, net profit and shareholder''s funds would have been increased by Rs. 60.45 lacs, Rs. 125.84 lacs and by Rs. 125.84 lacs respectively (previous period ended 31st March 2012: increased by Rs. 244.71 lacs, Rs. 509.40 lacs and Rs. 509.40 lacs respectively).

2. Attention is invited to Note no. 32.1(a) to the financial

statement, in the earlier year, the erstwhile Mafatlal Denim Limited (the Amalgamating Company) had made representation to the ministry of Corporate Affairs against the rejection of application under sections 269, 198, 309 and 310 of the Act, relating to re-appointment and payment of remuneration with effect from 1st April 2011 for two whole-time directors. Total remuneration of Rs. 281.85 lacs was paid to the said directors during the period 1st April, 2011 to 31st March, 2013. The said approval is pending from the Ministry Of Corporate Affairs and accordingly, we are unable to comment on the impact, if any arising out of the same in these financial statements.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effect of the matter described in para 1 of the Basis for Qualified Opinion paragraph above and possible effect of the matter described in para 2 of the Basis for Qualified Opinion paragraph above, and based on the consideration of the report of the other auditors on the financial statements of an amalgamating company referred to below in the Other Matter paragraph, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Emphasis of Matter

We draw attention to the Note no. 30.3 (1e) to the financial statements regarding the write-off of Goodwill of Rs. 3,931.71 lacs arising on amalgamation of Mishapar Investments Ltd. with the Company and adjustment thereof from the Securities Premium Account, in accordance with the approved Scheme of Amalgamation as no specific accounting treatment has been prescribed in the Accounting Standards (AS) notified pursuant to the Companies (Accounting Standards) Rules, 2006 as per Section 211(3C) of the Companies Act, 1956.

Our opinion is not qualified in respect of this matter.

Other Matter

We did not audit the financial statement of erstwhile Mafatlal Denim Limited ("the amalgamating company”), which reflect total assets of Rs. 21,946.56 lacs as at 31st March 2013, total revenue of Rs. 29,679.11 lacs and net profit before tax of Rs. 3,919.52 lacs for the year ended on that date, as considered in the financial statements pursuant to amalgamation with the Company (refer Note no. 30.3). These financial statements and other financial information have been audited by other auditors whose report has been furnished to us by the Management and our opinion, in so far as it relates to the amounts and disclosures included in respect of this amalgamating company, is solely based on the reports of other auditors.

Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

(b) Except for the effects of the matter described in sub- para 1 of the Basis for Qualified Opinion paragraph, 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 and audited returns adequate for the purposes of our audit have been received from the branches audited by the branch auditors.

(c) The reports on the accounts of the Ahmedabad and Nadiad branches audited by branch auditors appointed under section 228 have been forwarded to us and have been properly dealt with by us in preparing this report.

(d) 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 returns from the branches audited by the branch auditors.

(e) Except for the effect of the matter described in sub- para 1 of the Basis for Qualified Opinion paragraph above, in our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

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

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

(ii) In respect of its fixed assets:

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

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

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

(iii) In respect of its inventories:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

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

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

(iv) 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.

In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act,1956, according to the information and explanations given to us:

(a) The Company has granted loans aggregating Rs. 330.00 lacs to one party during the year. Including balances transferred from the amalgamating companies,at the year-end, the outstanding balances of such loans granted aggregated Rs. 1,096.00 lacs (seven parties) and the maximum amount involved during the year was Rs. 1207.29 lacs (seven parties).

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interest of the Company.

(c) The receipts of principal amounts and interest have been as per stipulations.

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

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

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

(b) Where each of such transaction is in excess of Rs. 5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time, other than certain purchases which are of a special nature for which comparable quotations are not available and in respect of which we are, therefore, unable to comment.

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

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

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

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

(a) The Company has generally been regular in depositing undisputed statutory dues, including Investor Education and Protection Fund, Income-tax,Wealth Tax, Customs Duty, Cess and other material statutory dues applicable to it with the appropriate authorities and has not been regular in depositing interest on Provident Fund, interest on Employees'' State Insurance, Sales Tax, Value Added Tax, Excise Duty, Gratuity, Interest on Electricity charges, Interest on Water charges and Service Tax.

(b) There were no undisputed amounts payable in respect of Investor Education and Protection Fund, Income-tax, Wealth Tax, Customs Duty, Cess and other material statutory dues in arrears as at 31st March, 2013 for a period of more than six months from the date they became payable. As at the year end, the arrears of statutory dues outstanding for a period of more than six months aggregate to Rs. 486.92 lacs in respect of interest on Provident Fund, Rs. 85.66 lacs in respect of interest on Employees'' State Insurance Dues, Rs. 12.46 lacs in respect of Sales Tax (inclusive of Interest), Rs. 0.33 lacs in respect of Value Added Tax, Rs. 9.90 lacs in respect of Excise Duty, Rs. 555.69 lacs in respect of Gratuity, Rs. 296.88 lacs in respect of Interest on Electricity Charges, Rs. 758.06 lacs in respect of Interest on Water Charges and Rs. 0.02 lacs in respect of Service Tax.

(xi) The Company does not have accumulated losses at the end of the financial year and the Company has not incurred any cash loss during the current financial year but has incurred cash loss during the preceeding period.

(xii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to financial institutions and banks except that there were delays upto 48 months in repayment of dues of term loans and interest thereon to a financial institution to the extent of Rs. 2,775.50 lacs and Rs. 1,338.55 lacs respectively by an amalgamating company. The duration of delay spanned from period prior to amalgamation on 1st April 2012 to July 2012. The Company has not issued debentures.

(xiii) In our opinion, the Company has maintained adequate documents and records where it has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities. No such secured loans and advances are outstanding as at the year end.

(xiv) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken by others from banks and financial institutions are not, prima facie, prejudicial to the interests of the Company. (Refer Note no. 30.1(b) on guarantee given for a subsidiary).

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

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

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No.117364W)

R.SALIVATI

Partner

(Membership No. 34004)

MUMBAI, 30th May, 2013

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of MAFATLAL INDUSTRIES LIMITED ("the Company") as at 31st March, 2012, the Statement of Profit and Loss and the Cash Flow Statement of the Company for the period from 1st July, 2011 to 31st March, 2012 both annexed thereto, in which are incorporated the Returns from Ahmedabad and Nadiad Units / Branches audited by other auditors. 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. Attention is invited to sub-note 9 of Note 29, which was also the subject matter of our report similarly qualified in the previous period, regarding non-accounting of rent/ recovery of expenses for the reasons stated therein; if the same is considered including the revision awarded by the Hon'ble Small Causes court, rental income from investment property would be higher by Rs. 754.11 lacs (aggregate to 30th June, 2011 Rs. 178.65 lacs),

We further report that had the observation made by us above been considered, in the current period there would have been a loss of Rs 4,431.88 lacs, as against the reported loss of Rs. 5,185.99 lacs (previous period, profit would have been Rs. 38,234.65 lacs, as against the reported profit of Rs. 38,056.00 lacs), reserves and surplus would have been Rs. 30,300.07 lacs, as against the reported figure of Rs. 29,545.96 lacs (as at 36th June, 2011, F;,. 34,900.60 lacs, as against the reported figure of Rs.34,731.Rs.5 lacs), trade receivables (net of provision) would have been Rs. 5,936.10 lacs, as against the reported figure of Rs. 5181.99 lacs (as at 30th June, 2011, Rs. 6,270.35 lacs, as against the reported figure of Rs. 6,091.70 lacs).

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

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

(ii) in our opinion, subject to our comment in para (4) above, 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 Ahmedabad and Nadiad Units / Branches audited by other auditors;

(iii) the reports on the accounts of the Ahmedabad and Nadiad Units / Branches audited by other auditors have been forwarded to us and have been dealt with by us in preparing this report;

(iv) 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 the audited Branch Returns; '

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

(vi) Subject to our comment in para (4) above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31s< March, 2012;

(b) in the case of the Statement of Profit and Loss, of the loss of the Company for the period from 1st July, 2011 to 31st March, 2012 and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the period from 1sl July, 2011 to 31st March, 2012.

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

ANNEXURETO THE AUDITORS'REPORT

(Referred to in paragraph 3 of our report of even date)

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

(ii) In respect of its fixed assets:

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

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

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

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the period by the Management at reasonable intervals.

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

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

(iv) (a) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 301. of the Companies Act, 1956. (b) In respect of loans, secured or unsecured, taken by the Company, from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanation given to us: (i) The Company has taken loans aggregating Nil frorn parties during the period. At the period end, the outstanding balance of such loan from a party was Nil and 'the maximum amount involved during the period was Rs. 3,443.73 lacs. (ii) The rate of interest and other terms and conditions of such loan are, in our opinion, prima facie not prejudicial to the interests of the Company. (iii) The payment of principal amount and interest in respect of such loan is as per stipulations. (v) In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weakness in such internal control system. (vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information . and explanations given to us:

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

(b) Where each of such transaction is in excess of Rs. 5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain purchases for which comparable quotations are not available and in respect of which we are unable to comment.

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

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

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

(a) The Company has been generally regular in depositing undisputed dues, including Investor Education and Protection Fund, Income- tax, Wealth Tax, Service Tax, Custom Duty, Cess and other material statutory dues applicable to it with the appropriate authorities and has not been regular in depositing interest on Provident Fund, interest on Employees' State Insurance, Sales Tax and Excise duty.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Cess and other material statutory dues in arrears as at 31st March, 2012, for a period of more than six months from the date they became payable. As at the period end, the arrears of statutory dues outstanding for a period of more than six months aggregate to Rs. 187.28 lacs in respect of interest on Provident Fund, Rs. 16.80 lacs in respect of interest on Employees State Insurance dues, Rs. 9.42 lacs in respect of Sales tax, Rs. 51.90 lacs in respect of Gratuity, Rs. 280.25 lacs in respect of Excise duty, Rs. 232.27 lacs in respect of Municipal Water Charges and Rs. 129.61 lacs in respect of interest on Electricity duty.

(c) Details of dues of Excise duty, Customs duty and Labour dues which have not been deposited as on 31st March, 2012 on account of disputes are given below:



Statute Nature of Dues Forum where Period to which Amount involved Dispute is pending the amount relates (Rs. in lacs)

Central Excise Excise Duty Assistant 1989-90 to 2003-04 254.29 Act, 1944 Commissioner

Central Excise Excise Duty Assistant 2006-07 to 2010-11 1.42 Act, 1944 Commissioner

Central Excise Excise Duty Commissioner 1989-90 to 2003-04 2,224.25 Act, 1944

Central Excise Excise Duty Commissioner (A) 1989-90 to 2003-04 133.90 Act, 1944

Central Excise Excise Duty CESTAT 1989-90 to 2003-01 54.95 Act, 1944

Central Excise Excise Duty High Court 1989-90 to 2003-04 14.99 Act, 1944

Central Excise Excise Duty Supreme Court 1989-90 to 2003-04 13.42 Act, 1944

Customs Act, Customs Duty Joint Director 1989-90 to 1999-00 4.79 1962 General of Foreign Trade

Bombay Indus- Labour Dues Labour Court From 1993 to 2008 1,163.29 trial Relations Act, 1946

(x) The Company does not have accumulated losses at the end of the financial period. The Company has incurred cash losses in the financial period and the Company did not incur cash losses in the immediately preceding financial period.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to. bank.

(xii) In our opinion, the Company has maintained adequate records where it has granted loans and advances on the basis of security by way of pledge of shares.

(xiii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantee given by the Company for loans taken by other from banks and financial institutions are not prima facie prejudicial to the interests of the Company. [Refer note 1(a) of Note 29 on guarantee given for a subsidiary].

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

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

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



For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117364W)

R. SALIVATI

Partner

MUMBAI,

10th October, 2012 (Membership No. 34004)

---

Jun 30, 2011

1. We have audited the attached Balance Sheet of MAFATLAL INDUSTRIES LIMITED ("the Company") as at 30th June, 2011, the Profit and Loss account and the Cash Flow Statement of the Company for the period from 1st June 2011 to 30th June 2011 both annexed thereto, in which are incorporated the Returns from Ahmedabad and Nadiad Units / Branches audited by other auditors. 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 misstatements. An audit includes examining, on a test basis, evidence supporting the amounts and the disclosures in the financial statements. An audit also includes assessing the accounting principles used and the significant estimates made by the Management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

4. We invite attention to note 18 of schedule 18, which was also the subject matter of our report similarly qualified in the previous period, regarding non- accounting of rent/ recovery of expenses of Rs. 4.72 lacs; aggregate to date, Rs. 178.65 lacs (previous period, Rs. 7.63 lacs; aggregate to date as at 31st May, 2010, Rs. 173.93 lacs).

We further report that had the observation made by us above, been considered, in the current period there would have been a profit of Rs. 38,234.65 lacs, as against the reported profit of Rs. 38,056.00 lacs (previous period, profit would have been Rs. 5,350.23 lacs, as against the reported profit of Rs. 5,176.30 lacs), reserves and surplus would have been Rs. 34,910.60 lacs, as against the reported figure of Rs. 34,731.95 lacs (as at 31st May, 2010, accumulated losses would have been Rs. 25,927.80 lacs, as against the reported figure of Rs.26,101.73 lacs), sundry debtors (net of provision) would have been Rs. 6,270.35 lacs, as against the reported figure of Rs. 6,091.70 lacs (as at 31st May, 2010, Rs.5,196.75 lacs, as against the reported figure of Rs.5,022.82 lacs).

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

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

(ii) in our opinion, subject to our comment in para (4) above, 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 Ahmedabad and Nadiad Units / Branches audited by other auditors;

(iii) the reports on the accounts of the Ahmedabad and Nadiad Units / Branches audited by other auditors have been forwarded to us and have been dealt with by us in preparing this report;

(iv) the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report are in agreement with the books of account and the audited Branch Returns;

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

(vi) Subject to our comment in para (4) above, in our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30th June 2011;

(b) in the case of the Profit and Loss Account, of the profit of the Company for the period from 1st June 2010 to 30th June 2011 and

(c) in the case of the Cash Flow Statement, of the cash flows of the Company for the period from 1st June 2010 to 30th June 2011.

6. On the basis of written representations received from the Directors, as on 30th June, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 30th June, 2011 from being appointed as a director in terms of Section 274(1)(g) of the Companies Act, 1956.

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

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

(ii) In respect of its fixed assets:

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

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

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

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the period by the Management at reasonable intervals.

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

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

(iv) (a) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(b) In respect of loans, secured or unsecured, taken by the Company, from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanation given to us:

(i) The Company has taken loans aggregating Nil from parties during the period. At the period end, the outstanding balance of such loan from a party was Rs. 3,420.97 lacs (including interest accrued and due) and the maximum amount involved during the period was Rs.3,420.97 lacs.

(ii) The rate of interest and other terms and conditions of such loan are, in our opinion, prima facie not prejudicial to the interests of the Company.

(iii) The payment of principal amount and interest in respect of such loan is as per stipulations.

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

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

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

(b) Where each of such transaction is in excess of Rs.5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain purchases for which comparable quotations are not available and in respect of which we are unable to comment.

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

(viii) 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 209(1)(d) of the Companies Act, 1956 in respect of Textiles and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The prescribed cost statements are in the process of being compiled for the period. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

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

(a) The Company has not been regular in depositing undisputed dues including Provident Fund, Employees' State Insurance dues, Income Tax, Sales Tax, Custom Duty, Excise Duty, Gratuity, Property Tax, Municipal Water Charges and Electricity Duty with the appropriate authorities. In respect of Investor Education & Protection Fund, Wealth Tax, Service Tax, Cess and other material statutory dues, it has generally been regular in depositing undisputed statutory dues with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Cess and other material statutory dues in arrears as at 30th June, 2011, for a period of more than six months from the date they became payable. As at the period end, the arrears of statutory dues outstanding for a period of more than six months aggregate to Rs. 502.32 lacs in respect of Provident Fund (including interest), Rs. 50.49 lacs in respect of Employees State Insurance dues

(including interest), Rs. 9.41 lacs in respect of Sales tax, Rs. 2,572.52 lacs in respect of Gratuity, Rs. 280.25 lacs in respect of excise duty, Rs. 232.27 lacs in respect of Municipal Water Charges and Rs. 1,345.08 lacs in respect of Electricity duty.

(c) Details of dues of Excise duty, Customs duty and Labour dues which have not been deposited as on 30th June, 2011 on account of disputes are given below:

Statute Nature of Forum where Period to Amount Dues Dispute is which the involved pending amount relates (Rs. in lacs)

Central Excise Excise Duty Assistant 1989-90 to 254.29 Act, 1944 Commissioner 2003-04

Central Excise Excise Duty Assistant 2006-07 to 1.42 Act, 1944 Commissioner 2010-11

Central Excise Excise Duty Commissioner 1989-90 to 2,224.25 Act, 1944 2003-04

Central Excise Excise Duty Commissioner 1989-90 to 133.90 Act, 1944 (A) 2003-04

Central Excise Excise Duty CESTAT 1989-90 to 54.95 Act, 1944 2003-04

Central Excise Excise Duty High Court 1989-90 to 14.99 Act, 1944 2003-04

Central Excise Excise Duty Supreme Court 1989-90 to 13.42 Act, 1944 2003-04

Customs Act, Customs Joint Director 1989-90 to 311.56 1962 Duty General of 1999-00 Foreign Trade Bombay Labour Labour Court From 1993 to 1,101.12 Industrial Dues 2008 Relations Act, 1946

(x) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to bank.

(xi) In our opinion, the Company has maintained adequate records where it has granted loans and advances on the basis of security by way of pledge of shares.

(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantee given by the Company for loans taken by other from banks and financial institutions are not prima facie prejudicial to the interests of the Company [Refer note 2(i) of Schedule 18].

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

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

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No.117364W)

R. SALIVATI

Partner

(Membership No.34004)

MUMBAI,

8th August, 2011

---

May 31, 2010

1. We have audited the attached Balance Sheet of MAFATLAL INDUSTRIES LIMITED ("the Company") as at 31st May, 2010, the Profit and Loss account and the Cash Row Statement of the Company for the period from 1st April 2009 to 31st May 2010 both annexed thereto, in which are incorporated the Returns from Ahmedabad and Nadiad Units/ branches audited by other auditors. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

4. We invite attention to note 6 of Schedule 18 regarding accounts of the Company being prepared on a going concern basis; this was also drawn attention to in our report of the previous year.

5. In respect of the following issues, our report was qualified in the previous year, but which are no longer relevant for the current period:

(a) Non-provisior for diminution in the value of certain unquoted investments as the same has been provided during the period [Refer Note 11 of Schedule 18];

(b) Non-provision for overdue debts, loans and advances in view of security created [Refer Note 12 of Schedule 18].

6. We invite attention to note 18 of schedule 18, which was also the subject matter of our report similarly qualified in the previous year, regarding non- accounting of rent/ recovery of expenses of Rs. 7.63 lacs; aggregate to date, Rs.173.93 lacs (previous year, Rs.9.46 lacs; aggregate to date as at 31" March, 2009, Rs. 180.30 lacs).

We further report that had the observation made by us above, been considered, (without considering items (a) and (b) of para 5 above in case of the previous year, the effect of which on the financial statements for the year ended 31* Match, 2009 could not be determined) in the current period there would have been a profit of Rs.5,350.23 lacs, as against the reported profit- of Rs.5,176.30 lacs (previous year, profit would have been Rs.33,931.02 lacs, as against the reported profit of Rs.33,750.72 lacs), the accumulated losses would have been Rs.25,927.80 lacs, as against the reported figure of Rs.26,101.73 lacs (at 31st March, 2009, Rs.31,097.73 lacs, as against the reported figure of Rs.31,278.03 lacs), sundry debtors (net of provision) would have been Rs.5,196.75 lacs, as against the reported figure of Rs.5,022.82 lacs (as at 31st March, 2009, Rs.5,453.98 lacs, as against the reported figure of Rs.5,273.68 lacs).

7. Further to our comments in the annexure referred to in para (3) above, we report that:

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

(ii) in our opinion, subject to our comment in para (6) above, 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 Ahmedabad and Nadiad Branches audited by other auditors;

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

(iv) in our opinion, subject to our comment in para (6) above, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub section (3C) of section 211 of the Companies Act, 1956;

(v) Subject to our comment in para (6) above (paras 5 & 6 in case of previous year), in our opinion and to the best of our information and . according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required, and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance sheet, of the state of affairs of the Company as at 31st May, 2010;

(b) in the case of the Profit and Loss account, of the Profit for the period from 1sl April, 2009 to 31" May, 2010; and

(c) in the case of the Cash Flow Statement, of the Cash Flows for the period from 1s1 April, 2009 to 31" May, 2010.

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

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

(I) Having regard to the nature of the Companys business/activities/ result, clauses (vi), (xii), (xiii), (xiv), (xix) and (xx) of Companies Auditors Report Order, 2003 are not applicable.

(ii) In respect of its fixed assets:

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

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

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

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the period by the Management at reasonable intervals.

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

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

(iv) (a) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) In respect of loans, secured or unsecured, taken by the Company, from companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, according to the Information and explanation given to us:

(i) The Company has not taken loans from such parties during the period. At the period end, the outstanding balance of such Interest free loan from a party was fis.3,108.96 lacs and the maximum amount involved during the period was Rs.3,108.96 lacs.

(II) The rate of interest and other terms and conditions of such loan are, in our opinion, prima facie, not prejudicial to the interests of the Company.

(iii) The payments of principal amounts in respect of such loan is as per stipulations.

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

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

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

(b) Where each of such transaction is in excess of Rs.5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

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

(viii) 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 209(1 )(d) of the Companies Act, 1956 in respect of Textiles and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. The prescribed cost statements are in the process of being compiled for the period. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

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

(a) The Company has not been regular in depositing undisputed dues including Provident Fund, Employees State Insurance dues, Sales. Tax, Excise Duty, Customs Duty, Gratuity, Property Tax, Municipal Water Charges & electricity duty with the appropriate authorities. In respect of Investor Education & Protection Fund, Wealth Tax, Income Tax, Service Tax, Cess and other material statutory dues, it has generally been regular in depositing undisputed statutory dues with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Income- tax, Wealth Tax, Custom Duty, Cess and other material statutory dues in arrears as at 31st May, 2010, for a period of more than six months from the date they became payable. As at the period end, the arrears of statutory dues outstanding for a period of more than six months aggregate to Rs.728.58 lacs in respect of Provident Fund, Rs.66.26 lacs in respect of Employees State Insurance dues, Rs.9.41 lacs in respect of Sales tax, Rs.2,325.19 lacs in respect of Gratuity, Rs.280.25 lacs in respect of excise duty, Rs.68.40 lacs in respect of Property Tax, Rs.254.60 lacs in respect of Municipal Water Charges and Rs.1,960.08 lacs In respect of Electricity duty.

(c) Details of dues of Excise duty, Customs duty and Stamps duty which have not been deposited as on 31" May, 2010 on account of disputes are given below:

Statute Nature of Forum where Period to which Amount

Dues Dispute is the amount Involved

pending relates (Rs. In lacs)

Central Excise Excise Assistant 1989-90 to 69.73

Act, 1944 Duty Commissioner 2003-04

Central Excise Excise Deputy 1989-90 to 15.28

Act, 1944 Duty Commissioner 2003-04

Central Excise Excise Joint 1989-90 to 10.70

Act, 1944 Duty Commissioner 2003-04

Central Excise Excise Additional 1989-90 to 8.11 Act, 1944 Duty Commissioner 2003-04

Central Excise Excise Commissioner 1989-90 to 2,149.67 Act, 1944 Duty 2003-04

Central Excise Excise Commissioner 1989-90 to 295.62 Act, 1944 Duty 2003-04

Central Excise Excise CESTAT 1989-90 to 54.25 Act, 1944 Duty 2003-04

Customs Act, Customs Director 1989-90 to 384.97

1962 Duty General of 1999-00

Foreign Trade

Bombay Labour Labour Court From 1993 to 1,116.95

Industrial Dues 2008

Relations Act,

1946

Bombay Stamp Superintendent 1996-97 1,229.47

Stamps Act, Duty of Stamps

1958

(x) The accumulated losses of the Company at the end of the financial period are more than fifty percent of its net worth and the Company has not incurred cash losses in the financial year and in the immediately preceding financial year.

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

(xii) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantee given by the Company for loans taken by other from banks and financial institutions are not prima facie prejudicial to the interests of the Company [Refer note 2(i) of Schedule 18].

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

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

(xv) According to the information and explanations given to us, the Company has made preferential allotment of shares to parties covered in the Register maintained under Section 301 of the Companies Act, 1956 at a price which is prima facie not prejudicial to the interests of the Company.

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No. 117364W)

R. Salivati

Partner

(Membership No.34004)

MUMBAI, Dated, 28th June, 2010