Auditor Report of Pradip Overseas Ltd.

Mar 31, 2015

Report on the Financial Statements

We were engaged to audit the accompanying financial statements of Pradip Overseas Limited ("the company"), which comprise the Balance Sheet as at 31st March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the 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 for ensuring accuracy and completeness of the accounting records relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on conducting our audit in accordance with the Standards on Auditing under Section 143(10) of the Act.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. Because of the matters described in the Basis for Disclaimer of Opinion paragraph, however, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion.

Basis for Disclaimer of Opinion

A. In respect of Trade Receivables amounting to Rs. 930.32 Cr., we have not received balance confirmations from the debtors. There have been defaults on the payment obligations by debtors on the due dates. The Company has created a provision for doubtful debts to the tune of Rs. 262.56 Cr. during the reporting period. The Company has stated that the provision is based on receivables which are older than 36 months, which in our opinion is not commensurate with the size and operation of the Company. In our opinion, the provision made is inadequate and the impact on loss and carrying value of trade receivables could not be ascertained.

B. In respect of Inventories, during the reporting period, the management has not undertaken physical verification of Inventories at periodic intervals. The Company has not maintained adequate inventory records at the factory. In our opinion, the comparative inventory holding levels, in view of steep decline in the turnover as compared to earlier years, are higher and therefore there is a possibility of loss on sale / realization of slow moving / old items. No provision has been made on diminution in the value of old and slow moving inventory. The impact of the above remarks, presently not ascertainable and, therefore, cannot be commented upon.

C. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company has suffered recurring losses from operations, has net capital deficiencies and non fulfillment of commitment of approved CDR package that raises substantial doubts about the Company's ability to continue as a going concern. The financial statement does not include any adjustment that might result from the outcome of this uncertainty. Management plans in regard to this matter are described in note 3.1.4 to the financial statements. The appropriateness of going concern assumption is dependent on the Company's ability to raise adequate finance from alternate means and / or recoveries from debtors to meet its short term and long term obligations as well as to establish consistent business operations.

In the absence of any convincing audit evidences, no positive steps taken by the management, non recovery of Trade Receivables since long, default in payment of the restructured loans forming part of CDR package and financial difficulties faced by the Company due to decrease in business operations, we are unable to determine the possible effects of these multiple uncertainties on the financial statements.

Disclaimer of Opinion

Because of the significance of the matters described in the Basis for Disclaimer of Opinion paragraph, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Accordingly, we do not express an opinion on the financial statements.

Report on Other Legal and Regulatory Requirements

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

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

a. As described in the Basis of Disclaimer of Opinion paragraph, we sought but were unable to obtain all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the matters as referred to in Basis for Disclaimer of Opinion.

c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the books of account except for the matters as referred to in Basis for Disclaimer of Opinion.

d. Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e. The matters described in the Basis for Disclaimer of Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

g. The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis of Disclaimer of Opinion paragraph above.

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

i. Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer note 17 to the Financial Statements;

ii. Due to the possible effects of the matters described in the Basis for Disclaimer of Opinion paragraph, we are unable to state whether the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts;

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

Referred to in Paragraph 1 under the heading of "report on other legal and regulatory requirements" 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 the fixed assets.

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

(ii) In respect of its inventories:

a. The management has not conducted physical verification of inventory at reasonable intervals.

b. In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are not reasonable and adequate in relation to the size of the Company and the nature of its business. The management has not undertaken physical verification of inventory at periodic intervals during the reporting period.

c. The Company has not maintained proper records of inventory. In the absence of adequate documentation of physical verification of inventory and inventory records, we are unable to determine whether there were any material discrepancies noticed on physical verification of inventories as compared to the book records and whether the same has been properly dealt with in the books of accounts.

(iii) According to the information and explanations given to us, the Company has not granted loans, secured or unsecured to the Companies, firms or other parties covered in register maintained under section 189 of the Act. Accordingly, the provisions of clause (iii) (a) and (iii) (b) of paragraph 3 of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

(v) According to the information and explanations given to us, the Company has not accepted any deposit from the public during the year. Therefore, the provisions of Clause (v) of paragraph 3 of the Order are not applicable to the Company.

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

(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, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess to the extent applicable and any other statutory dues with the appropriate authorities. There were no undisputed statutory dues in arrears as on 31st of March, 2015 for a period of more than six months from the date they became payable.

b) There are no amounts payable in respect of income tax, wealth tax, service tax, sales tax, duty of customs, duty of excise or value added tax or cess which have not been deposited on account of any disputes.

c) According to the information and explanations given to us, there were no amounts which were required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

(viii) The accumulated losses of the Company at the end of the financial year exceed its net worth. The Company has incurred cash losses during the financial period covered by our audit. The cash losses were also incurred in the immediately preceding financial year.

(ix) Based on our audit procedure and as per the information and explanation given by the management, the Company has defaulted in meeting its scheduled debt service obligations as per the approved Corporate Debt Restructuring proposal. The details of such default are as under:

Bank Name Total Amount Defaulted (in Cr.) Date from when Default Started

State Bank of India 0.10 31/03/2015

Canara Bank 0.12 31/03/2015

Indian Overseas Bank 0.05 31/03/2015

Allahabad Bank 0.08 31/03/2015

Union Bank of India 0.01 31/03/2015

Punjab National Bank 0.02 31/03/2015

State Bank of Patiala 0.02 31/03/2015

Karur Vyasa Bank 0.01 31/03/2015

Bank of India 0.04 31/03/2015

Laxmi Vilas Bank 0.02 31/03/2015

Total 0.47

The above defaults are the primary amounts as on the date of the defaults and do not consider any levies of interest and penal interest charged by the banks / provided by the company after the date of the defaults. The Company does not have any outstanding dues from financial institutions and/or by way of debentures.

(x) In our opinion and according to the information and explanations given to us, the company has not given any guarantee for the loan taken by others from banks or financial institutions. Accordingly, the provisions of clause (x) of the paragraph 3 of the Order are not applicable to the Company.

(xi) The Company has raised new term loans during the year. In our opinion, the term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

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

For, Ashok Dhariwal & Co.,

Chartered Accountants,

(Reg. No. 100648W)

Sd/-

(CA Ashok Dhariwal)

Place: Ahmedabad Partner

Date : 09/06/2015 Membership No. 036452

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Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

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") read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013 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 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 accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 March 31, 2014;

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

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

a. We draw attention to Note 3.1 to the financial statements which, describes the Scheme of Corporate Debt Restructuring and its effects given in the financial statements. Our opinion is not qualified in respect of this matter.

b. We draw attention to Note 17 to the financial statements in respect of contingency related to compensation payable in lieu of bank sacrifice, the outcome of which is materially uncertain and cannot be determined currently. 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 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 Order.

2. As required by Section 227(3) of the Companies Act, 1956, we report that:

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

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

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

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

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

Referred to in Paragraph 1 under the heading of "report on other legal and regulatory requirements" of our report of even date

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including Quantitative details and situation of fixed assets on the basis of available Information.

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

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

2. In respect of its inventories:

a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

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

3. In respect of the loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

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

b. The Company has taken unsecured loans from Directors. The outstanding amount of unsecured loan as on March 31, 2014 is Rs. 33,38,16,460 (Previous Year Rs. 23,89,46,460). Apart from this, the company has not taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956.

c. In our opinion, the terms and conditions on which loans have been taken from Companies, Firms and other Parties covered in the register maintained under section 301 of the Companies Act,1956 are not prima facie prejudicial to the interest of the Company.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

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

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

6. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost 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 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. In respect of statutory dues:

a. According to the records of the company, undisputed statutory dues including Provident Fund, Income - Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and other statutory dues have been generally regularly deposited with the appropriate authorities.

b. According to the information and explanation given to us, there are no dues of VAT, Service Tax, Income tax, Wealth Tax, Customs duty, Excise duty and cess, which have not been deposited on account of any dispute.

10. The accumulated losses of the Company as at the end of the financial period are more than fifty percent of its net worth as on March 31, 2014. The Company has incurred cash losses during the financial period covered by our audit. The cash losses were also incurred in the immediately preceding financial year.

11. Based on our audit procedure and as per the information and explanation given by the management, the Company has defaulted in meeting its scheduled debt service obligations as per the Debt Restructuring proposal. The company approached the Corporate Debt Restructuring Cell to restructure its debt obligations. The CDR proposal of the company has been approved by CDR empowered group and a master restructuring agreement has been entered into on 22.03.2014 which cured all defaults during the year to banks.

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

13. In our opinion, the Company is not a chit fund /nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name.

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

16. The company has not raised any new term loan during the year. The Term Loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.

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

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

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

21. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For, Ashok Dhariwal & Co., Chartered Accountants, (Reg. No.100648W) Sd/- (CA Ashok Dhariwal) Place: Ahmedabad Partner Date : 29/05/2014 Membership No. 036452

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Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the 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 March 31, 2013;

b. In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") 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 Order.

2. As required by Section 227(3) of the Companies Act, 1956, we report that:

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

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

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

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

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

Referred to in Paragraph 1 under the heading of "report on other legal and regulatory requirements" of our report of even date

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars including Quantitative details and situation of fixed assets on the basis of available Information.

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

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

2. In respect of its inventories:

a. The inventories have been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

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

3. In respect of the loans, secured or unsecured, granted or taken by the Company to / from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956:

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

b. The Company has taken unsecured loans from Directors. The outstanding amount of unsecured loan as on March 31, 2013 is Rs.23,89,46,460 (Previous Year Rs.16,79,26,000). Apart from this, the company has not taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5. In respect of the contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

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

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts / arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

6. According to the information and explanations given to us, the Company has not accepted any deposit from the public. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

8. We have broadly reviewed the books of account relating to materials, labour and other items of cost 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 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. In respect of statutory dues:

a. According to the records of the company, undisputed statutory dues including Provident Fund, Income – Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and other statutory dues have been generally regularly deposited with the appropriate authorities.

b. According to the information and explanation given to us, there are no dues of VAT, Service Tax, Income tax, Wealth Tax, Customs duty, Excise duty and cess, which have not been deposited on account of any dispute.

10. The accumulated losses of the Company as at the end of the financial period are not in excess of fifty percent of its net worth as on March 31, 2013. The Company has incurred cash losses during the financial period covered by our audit. The cash losses were also incurred in the immediately preceding financial year.

11. Based on our audit procedure and as per the information and explanation given by the management, the Company has defaulted in repayment of term loan of Rs.2.57 Cr. (SBI, Canara & IOB) and Rs.20.86 Cr. (Allahabad Bank). The company has decided to approach the Corporate Debt Restructuring Cell to restructure its debt obligations. The above mentioned loans will now form part of the CDR package.

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

13. In our opinion, the Company is not a chit fund /nidhi / mutual benefit fund / society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

14. The Company has maintained proper records of the transactions and contracts in respect of dealing or trading in shares, securities, debentures and other investments and timely entries have been made therein. All shares, securities, debentures and other investments have been held by the Company in its own name.

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

16. The company has not raised any new Term Loan during the year. The Term Loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that there are no funds raised on short-term basis that have been used for long-term investment.

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

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

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

21. In our opinion and according to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the year.

For, Ashok Dhariwal & Co.,

Chartered Accountants,

(Reg. No. 100648W)

(CA Ashok Dhariwal)

Place: Ahmedabad Partner

Date:30/05/2013 Membership No. 36452

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of PRADIP OVERSEAS LIMITED as at March 31, 2012, the Statement of Profit and Loss account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the companies (Auditor''s Report) Order,2003 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. Further to our comments in the Annexure referred to above, we report that:

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

(ii) In our opinion, proper books of account as required by law have been kept by the company as far as appears from our examination of those books;

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

(iv) In our opinion, the Balance Sheet, Statement of 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) On the basis of written representations received from the Directors as on March 31,2012 and taken on record by the Board of Directors, we report that, none of the Directors is disqualified as on March 31,2012 from being appointed as Director under Section 274(l)(g) of Companies Act,1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts 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 March 31, 2012;

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

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

REF: PRADIP OVERSEAS LIMITED

Referred to in paragraph 3 of our report of even date,

1. In respect of its fixed assets:

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

(b) As explained to in all the fixed assets are physically verified by the management during the year, which in our opinion is reasonable, having regard to the size of the Company and nature of its fixed assets. We are informed that no material discrepancies were noticed on such verification.

(c) In our opinion the Company has not disposed off any part of its fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its inventories :

(a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. (a) As per the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956 and hence sub clauses (b),(c),(d),(f) and (g) of clause 4 of the order are not applicable.

(b) The company has taken unsecured Loans from directors. The outstanding amount of unsecured loan as on March 31,2012 is Rs.16.79 Lacs (Previous Year Rs. NIL). Apart from this, the company has not taken any Loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956.

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

5. In respect of contracts or arrangements referred to in Section 301 of the Companies Act, 1956:

(a) According to the information and explanations provided by the management, we are of the opinion that the particulars of Contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained U/s 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs.5.00 Lacs in respect of each party during the year have been made at price which appear reasonable as per information available with the company.

6. The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

8. 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 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

9. In respect of Statutory Dues:

(a) According to the records of the company, undisputed statutory dues including Provident Fund, Income - Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty and other statutory dues have been generally regularly deposited with the appropriate authorities.

(b) According to the information and explanation given to us, there are no dues of VAT, Service Tax, Income tax, Wealth Tax, Customs duty, Excise duty and cess, which have not been deposited on account of any dispute.

10. The accumulated losses of the Company as at the end of the financial period are not in excess of fifty percent of its net worth as on March 31, 2012. The Company has incurred cash losses during the financial period covered by our audit. The cash losses were not incurred in the immediately preceding financial year.

11. Based on our audit procedure and as per the information and explanation given by the management, the Company has defaulted in repayment of short term loans and overdrawn working capital limits for the period from December, 2011 to February, 2012 and such defaults have subsequently been restructured by the Consortium of banks in February,2012. In December 2011, the Company had defaulted in payment of overdrawn working capital facilities with Allahabad Bank which was for the period from October, 2011 to December, 2011. The said default was restructured by the bank in December, 2011.

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

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

14. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments except Mutual Funds. The company has maintained proper record of the transaction for investment in mutual fund and timely entries have been made therein. All investments in the mutual fund have been held by the company in its own name.

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

16. The company has not raised any new Term Loan during the year. The Term Loans outstanding at the beginning of the year have been applied for the purposes for which they were raised.

17. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-terms assets except permanent working capital.

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

19. According to the information and explanation given to us, during the year covered by our Audit Report, Company had not issued Debentures. Accordingly clause 4(xix) of the order is not applicable.

20. We have verified the end use of money raised by public issue as disclosed in notes to the financial statements.

21. Based upon the Audit procedure performed for the purpose of reporting the true and fair view of the financial statements and as for the information and explanations given by the management, we report, no fraud on or by the Company has been noticed or reported during the course of our audit.

For, Ashok Dhariwal & Co.,

Chartered Accountants,

(Reg. No. 100648W)

(CA Ashok Dhariwal)

Place: Ahmedabad Partner

Date : August 24, 2012 Membership No. 36452

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of PRADIP OVERSEAS LIMITED as at 31st March, 2011, the Profit and Loss account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the companies (Auditor's Report) 0rder,2003 issued by the Central Government of India in term of section 227 ( 4A ) of the companies Act,1956, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

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

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

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

(iii) The Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet, Profit 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) On the basis of written representations received from the Directors as on 31st March,2011 and taken on record by the Board of Directors, in our opinion, none of the Directors are disqualified from being appointed as Director under Section 274(l)(g) of Companies Act,1956.

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

(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2011.

(b) In the case of the Profit and Loss account, of the profit for the year ended on 31st March, 2011. and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on 31st March, 2011.

ANNEXURE TO AUDITORS' REPORT REF: PRADIP OVERSEAS LIMITED Referred to in paragraph 3 of our report of given date,

(1) (a) The company is maintaining proper records showing full particulars including quantitative detail and situation of fixed assets.

(b) As explained to us, all the fixed assets are physically verified by the management during the year, which in our opinion is reasonable, having regard to the size of the Company and nature of its fixed assets. We are informed that no material discrepancies were noticed on such verification.

(c) In our opinion the Company has not disposed off any part of its fixed assets during the year and the going concern status of the Company is not affected.

(2) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(3) (a) As per the information and explanations given to us, the Company has not granted or taken any loans, secured or unsecured to/from companies, firms or other parties covered in the register maintained under section 301 of Companies Act, 1956.

(b) As the company has neither granted nor taken any loans, secured or unsecured to/form companies, firms or other parties covered in the register maintained U/s 301 of the Companies Act, 1956, sub clauses (b),(c),(d),(f) and (g) of clause 4 of the order are not applicable.

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

(5) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of Contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained U/s 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5.00 Lacs in respect of each party during the year have been made at price which appear reasonable as per information available with the company.

(6) The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

(8) 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 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

(9) (a) The Company is regular in depositing Provident Fund with appropriate authorities.

(b) According to the information and explanation given to us, there are no dues of VAT, Service Tax, Income tax, Wealth Tax, Customs duty, Excise duty and cess, which have not been deposited on account of any dispute.

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

(11) Based on our audit procedure and as per the information and explanation given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to Banks.

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

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

(14) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments except Mutual Funds. The company has maintained proper record of the transaction for investment in mutual fund and timely entries have been made therein. All investments in the mutual fund have been held by the company in its own name.

(15) In our opinion, and according to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(16) The company has raised new Term Loan during the year. The Term Loan outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

(17) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-terms assets except permanent working capital.

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

(19) According to the information and explanation given to us, during the year covered by our Audit Report, Company had not issued Debentures. Accordingly clause 4(xix) of the order is not applicable.

(20) We have verified the end use of money raised by public issue as disclosed in notes to the financial statements.

(21) Based upon the Audit procedure performed for the purpose of reporting the true and fair view of the financial statements and as for the information and explanations given by the management, we report, no fraud on or by the Company has been noticed or reported during the course of our audit.

For, Ashok Dhariwal & Co.,

Chartered Accountants,

(Reg. No. 100648W)

(CA Ashok Dhariwal)

Place: Ahmedabad Proprietor

Date : 27th June, 2011 Membership No. 36452

---

Mar 31, 2009

1. We have audited the attached Balance Sheet of PRADIP OVERSEAS LIMITED as at 31 st March, 2009, the Profit and Loss account and Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

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

(iii) The Balance Sheet, Profit and Loss account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the Balance Sheet, Profit 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) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2009.

(b) In the case of the Profit and Loss account, of the profit for the year ended on 31st March, 2009 and

(c) In the case of Cash Flow Statement, of the Cash Flows for the year ended on 31st March,

ANNEXURE REF: PRADIP OVERSEAS LIMITED Referred to in paragraph 3 of our report of given date, (1) (a) The company is maintaining proper records showing full particulars including quantitative detail and situation of fixed assets.

(b) As explained to us, all the fixed assets are physically verified by the management during the year, which in our opinion is reasonable, having regard to the size of the Company and nature of its fixed assets. We are informed that no material discrepancies were noticed on such verification.

(c) In our opinion the Company has not disposed off any part of its fixed assets during the year and the going concern status of the Company is not affected.

(2) (a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(3) (a) The company has taken unsecured loans from the Directors and Companies covered in the Register maintained U/s 301 of the Companies Act, the balance as on 31st March, 2009 was Rs. 296, 935, 176/- ( Previous Year Rs. 209, 841, 964/- ) .

(b) As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained U/s 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (b), 4 (iii) (c), 4 (iii) (d) of the Companies (Auditors Report) order 2003 (as amended) are not applicable to the Company.

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

(5) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of Contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained U/s 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(6) The company has not accepted any deposits from the public within the meaning of Sections 58A and 58AA of the Act and the rules framed there under.

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

(8) 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 209 (1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained.

(9) (a) The Company is regular in depositing Provident Fund with appropriate authorities.

(b) According to the information and explanation given to us, there are no dues of VAT, income tax, customs duty, excise duty and cess, which have not been deposited on account of any dispute.

(c) The company has no accumulated losses as at the end of the financial year and has not incurred any cash losses in the current and immediately preceding financial year.

(10) Based on our audit procedure and as per the information and explanation given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to Banks.

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

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

(13) In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause 4 (xiv) of the Companies (Auditors Report) order 2003 (as amended) are not applicable to the Company.

(14) In our opinion, and according to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(15) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(16) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis have been used for long-term investment. No long-term funds have been used to finance short-terms assets except permanent working capital.

(17) According to the information and explanation given to us, during the year covered by our Audit Report, Company had not issued Debentures. Accordingly clause 4(xix) of the order is not applicable.

(18) The company has made preferential allotment of Bonus shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956.

(19) Based upon the Audit procedure performed for the purpose of reporting the true and fair view of the financial statements and as for the information and explanations given by the management, we report, no fraud on or by the Company has been noticed or reported during the course of our audit.

For Ashok Dhariwal & Co., Chartered Accountants,

Place : Ahmedabad Date : 9th July, 2009

(CA Ashok Dhariwal)

(Proprietor) Membership No. 36452