Auditor Report of Royal Cushion Vinyl Products Ltd.

Mar 31, 2024

M/s. ROYAL CUSHION VINYL PRODUCTS LIMITED

Report on the Financial statements

We have audited the accompanying financial statements of M/s. ROYAL CUSHION VINYL PRODUCTS LIMITED (''the Company''), which comprise the balance sheet as at 31 March, 2024, the statement of profit and loss (including other comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, notes to the financial statements, a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the financial statements").

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the 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, including Indian Accounting Standards("Ind AS") specified u/s 133 of the Act, of the state of affairs of the Company as at 31 March, 2024 and its profit(financial performance including other comprehensive income, changes in equity) and its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion:

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

Material Uncertainty Related to Going Concern

We draw your attention to Note 43 of the financial statements, which indicates that the Company''s net worth has got eroded as of March 31, 2024 and the Company''s current liabilities exceeded its current assets. Our report is not modified in respect of this matter.

Emphasis of Matter

1) We draw your attention to amount written back of outstanding dues of Finquest Financial Solutions Private Limited ("FFSPL") of Rs.22860.44 lacs. Finquest Financial Solutions Private Limited ("FFSPL"), FFSPL had taken over the loans from SICOM & Saraswat Co-op bank. Pursuant to time to time deliberations and negotiations with FFSPL, the Company has finally negotiated with FFSPL to make a full and final payment of Rs.860 lacs ("Settlement Amount") towards settlement of all outstanding dues and accordingly, completed the full payment of the entire Settlement Amount during July 2023. Pursuant thereto, the Company has received the No Dues Certificate dated July 14, 2023 from FFSPL confirming no outstanding dues in the loan accounts of the Company with FFSPL. Accordingly, the said loan accounts stands settled in the books of the Company and outstanding balance amount lying in books, which is not payable has been written back in the books and current charges outstanding against above is nil and same is added in Exceptional items.

(Refer Note No 34.1 in the financial statements)

2) We Draw your attention to amount written back of outstanding Provisions for Custom Duty including interest of Rs.5683.95 lacs: Under the Duty Exemption Scheme of Advance License (as well as similar other license scheme) pursuant to Import & Export Policy of Government of India, duty free imports of raw materials were permitted, and they are required to be used in manufacturing of goods for export and export of goods has to be effected within the time allowed in terms of such scheme. In the past ( Prior to year 2000), the Company had availed benefit of such licenses from time to time and it had also fulfilled its export obligations as per the conditions of such scheme in many of the licenses but in some cases such exports were not done . The said matter relates back to the period of more than 25 years and as such, the management of the company, based on an expert opinion ,

evaluated its specific obligations which may still subsists, if any. Based on the comprehensive evaluation and expert opinion, the provision made in earlier years has been written back and same is added in Exceptional items.

(Refer Note No 34.2 in the financial statements)

3) We Draw your attention to unclaimed Liabilities/Balances written back of Rs. 329.44 lacs represents balances of various parties, which are no longer payable, have been written back. The same is added in Exceptional items.

(Refer Note No 34.3 in the financial statements)

4) We Draw your attention that during the year under review, the Company has done revaluation of it''s Land as per the provisions of IND AS. The revalued figure is Rs.3569.00 lacs and after reducing the book value, revaluation reserve created is Rs.3522.45 lacs. This value is credited in the Statement of Profit & Loss under the heading Other Comprehensive Income

(Refer Note No 3 in the financial statements)

5) We Draw your attention that the Company has completed preferential issue of i) 66,21,250 equity shares of the Company having face value of Rs.10/- each, to members of the Promoters and Promoter Group at an issue price of Rs.40/- per equity share including premium of Rs.30/- per equity share. Such preferential issue is against the conversion of their outstanding balance of unsecured loans given by promoters and promoters group to the Company ii) 1,79,00,000 equity shares of the Company having face value of Rs.10/- each at par, to private investors (non- Promoters) on preferential basis . Further, these shareholders will have voting rights at par with existing shareholders. The above shares are allotted in the meeting of Board of Directors on the Company on 17.11.2023. The Company has also received Trading approval from BSE Ltd for these preferential shares vide letter dated 26.01.2024 from BSE Ltd.

(Refer No te No 12.2 in the financial statements)

6) We Draw your attention that the company has sold its land parcels comprising of Factory Land. Profit on sale of assets Rs. Rs.1065.21 lacs is grouped under other income.

(Refer Note No 23 in the financial statements)Our conclusion on the financial statements is not modified in respect of the matters described in paragraph 1 to 6 above Key Audit Matters

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

Key Audit Report	How was the matter addressed in our audit
Revenue Recognition	Our audit procedures, among other things, included the
Revenue is recognized upon transfer of control of promised goods to customers in an amount that	following: • Considered the appropriateness of the Company''s
reflects the consideration which the Company expects	accounting policies regarding revenue recognition
to receive in exchange for those goods. Revenue is	• Testing controls, automated and manual, around
measured based on transaction price, which is the	dispatches/deliveries/shipments inventory
consideration, adjusted for rebates, discounts and	reconciliations and process of confirmation of
incentives as also estimated sales returns.	receivable balances, testing for cut-offs and
Revenue is one of the key profit drivers and therefore,	analytical review procedures. • Assessed the disclosures in accordance with the
accounting of revenue is considered as a key audit	requirements of Ind AS 115 on "Revenue from
matter.	Contracts with Customers".

[Refer Note 2(a) to the financial statements]	Our audit procedures, among other things, included the following.
Valuation of inventories The Company has complex product manufacturing process and thus, the overhead absorption over each	•	Evaluated the appropriateness of the basis applied to arrive at the overhead absorption rate;
	•	Examined the workings of the absorption of over heads to arrive at the cost of inventories.
process is quite complex and more particularly, to
have the basis of absorption. The Company has
worked out the overhead absorption cost rate based	•	Our audit methodology involves process adopted to
on the consumption of electricity and other utility		ascertain and evaluate the methods used are
resources of each process and apply the same for all		reasonable and absorbs overheads in an appropriate
other overheads.	•	& logical manner. Assessed the disclosures in accordance with the
Due to significance of arriving at the overhead absorption rate for the valuation of inventories, it is		requirements of Ind AS 2 on "Inventories".
considered to be a key audit matter.	Our audit procedures, among other things, included the following.
[Refer Note 2(d) to the financial statements]
Revaluation of Land	•	Evaluated the appropriateness of the basis applied.
The Company has done revaluation of it''s Land as per	•	Examined the workings and reviewed the valuation
the provisions of IND AS.		report from independent valuer.
The revalued figure is Rs. 3569.00 lacs and after reducing the book value, revaluation reserve created	•	Our audit methodology involves process adopted to
is Rs. 3522.45 lacs. This value is credited in the		evaluate the methods used are reasonable in an
Statement of Profit & Loss under the heading Other		appropriate & logical manner.
Comprehensive Income	•	Assessed the disclosures in accordance with the requirements of Ind AS 16 on "Property Plant and
Due to the significance of the amounts involved, it is considered to be a key audit matter.		Equipment".
[Refer Note 3 to the financial statements]

Information Other than the Financial statements and Auditor''s Report Thereon

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

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

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

Responsibilities of Management and Those Charged with the Governance 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 preparation and presentation of these Financial Statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows statement, statement of changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (IND AS) specified prescribed under Section 133 of the Act, (read with Rule 7 of the Companies Indian Accounting Standards) Rules, 2015, as amended.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and

application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error which have been used for the purpose of preparation of the Financial Statements by the Directors of the Company, as aforesaid.

In preparing the financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

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

Auditor''s Responsibilities for the Audit of the Financial Statements. Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance.

Auditor''s Responsibilities for the Audit of the Financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SA''s 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 financial statements.

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

Identify and assess the risks of material misstatement of the 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 financial controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

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

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

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

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

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

Other Matter

The financial statements of the Company for the year ended 31 March 2023 were audited by the predecessor auditor, Bipin & Co, who have expressed an unmodified opinion on those financial statements vide their audit report dated 29^th May , 2023.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor''s Report) Order, 2020, issued by the Central Government of India in term of subsection (11) of section 143 of the Companies Act, 2013, we give in the Annexure "A" a statement on the matters specified in the paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

(c) The balance sheet, the statement of profit and loss and the statement of cash flow dealt with by this Report are in agreement with the books of account;

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

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

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

(g) With respect to other matter to be included in the Auditor''s Report in accordance with the requirement of section 197(16) of the Act, as amended in our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, 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 litigation on its financial position in financial statements—Refer Note 36 to the financial statements.

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

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

iv. (a) The Management has represented that, to the best of it''s 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(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, 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, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity

("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.

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

(v) The Board of Directors of the Company have not proposed any dividend for the year and therefore provisions of rule 11(f) are not applicable.

(vi) As stated in note 50 to the financial statements and based on our examination which included test checks, except for instance mentioned below, the Company, in respect of financial year commencing on 1 April 2023, has used an accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with, other than the consequential impact of the exception given below:

Nature of exception noted	Details of Exception
Instances of accounting software for maintaining books of	The audit trail feature was not enabled at the
account for which the feature of recording audit trail (edit	database level for accounting software to log any
log) facility was not operated throughout the year for all	direct data changes, used for maintenance of all
relevant transactions recorded in the software.	accounting records by the Company.

2 As required by the Companies (Auditor''s Report) Order, 2020 ("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.

For MANEK & ASSOCIATES Chartered Accountants Firm''s registration number: 0126679W

(SHAILESH MANEK)

Mumbai Partner

Dated: 29^th May,2024 Membership number.034925

UDIN :- 24034925BKGEGU1320

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Mar 31, 2023

1. We have audited the standalone financial statements of ROYAL CUSHION VINYL PRODUCTS LIMITED ("the Company"), which comprise the Standalone Balance Sheet as at 31 March 2023, and the Standalone Statement of Profit and Loss (including other comprehensive income), Standalone Statement of Changes in Equity and Standalone Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").

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 including Indian Accounting Standards("Ind AS") specified u/s 133 of the Act, of the state of affairs (financial position ) of the Company as at 31 March 2023, and its profit (financial performance including other comprehensive income, changes in equity), its cash flows and the changes in equity for the year ended on that date.

3. Basis of Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Companies Act 2013 (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made 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 audit opinion on the standalone financial statements.

Emphasis of Matter

1. We draw your attention to Note No.20 to the financial statement with respect to the profit on sale of fixed assets comprising of sale of Factory Land. Profit on sale of asset Rs. 1876/- lacs grouped under the head other income.

2. We draw your attention to Note No. 14.1.(b) to the financial statement with respect to the payment of borrowing (Term Loan) with The Baroda City Co Operative bank Ltd. Accordingly interest Rs.73.05/- lacs paid and principal of Rs. 32.68/-lacs towards repayment of loan.

Key Audit Matters

4. Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current year. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the key audit matters to be communicated in our report.

Information Other than the Financial Statements and Auditor''s Report Thereon

5. The Company''s Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Board''s Report including annexure to Board''s Report, but does not include the Financial Statements and our auditor''s report thereon.

Our opinion on the 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 Financial Statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the Financial Statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

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

Responsibilities of Management and Those Charged with the Governance for the Financial Statements

6. The Company''s Board of Directors is responsible for the matter stated in Section 134(5) of the Companies Act, 2013 with respect to preparation and presentation of these Financial Statements in terms of the requirements of the Act that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and statement of changes in equity of the Group including its associates in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. The respective Board of Directors of the companies included in the Group and of its associates are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Group and of its associates and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error, which have been used for the purpose of preparation of the Financial Statements by the Directors of the Company, as aforesaid.

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

Those respective Board of Directors of the are also responsible for overseeing the financial reporting process.

Auditor''s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the Financial Statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance

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.

As part of an audit in accordance with SAs, we exercise professional judgment 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 financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

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

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

- 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.

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

We also provide those charged with governance with a statement that we have complied with relevant ethical requirement 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.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor''s Report) Order, 2020, issued by the Central Government of India in term

of sub-section (11) of section 143 of the Companies Act, 2013, we give in the Annexure "A" a statement on the matters specified in the paragraphs 3 and 4 of the Order, to the extent applicable.

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

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

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

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

g) With respect to other matter to be included in the Auditor''s Report in accordance with the requirement of section 197(16) of the Act, as amended in our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act.

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

i. the Company has disclosed the impact of pending litigations on its financial position in the standalone financial statements; Refer Note 32 to financial statements;

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

iii. there were no amount which were required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31^st 2023;

iv. i. 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 fund or share premium or any other sources of kind of funds) by the Company to or in any other person(s) or entity (ies), including foreign entities ("intermediaries"), with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly land 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 ultimate beneficiaries;

ii. The management has represented that, to the best of its knowledge and belief, that no funds have been received by the Company from any person(s) or entity (ies), including foreign entities ("funding parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly land 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 ultimate beneficiaries; and

iii. Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representation under subclause (i) and (ii) of the Rule 11(e) contained any material mis-statement.

v. There is no dividend declared or paid during the year by the Company and hence provision of section 123 of the Companies Act, 2013 are not applicable.

For, BIPIN & CO.

CHARTERED ACCOUNTANTS FRN:101509 W

CA AMIT SHAH PARTNER

PLACE: VADODARA M. No.: 126337

DATE: May 29, 2023 UIDN: 23126337BGSPIH2152

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Mar 31, 2015

1. We have audited the accompanying standalone financial statements of ROYAL CUSION VINYL PRODUCTS LTD ("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:

2. The Management and 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 provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the 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 internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility:

3. Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

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

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

6. (a) Basis for qualified Opinion

As in the past in current year also the company has not received bank statement/ bank advise / balance certificate from the financial installations /banks. Banks entries pertaining to banks and financial institutions and transactions and not reconciled. In absence of non reconciliation & non availability of such details of information amount payable to financial institution /Banks are not ascertained /yet to be reconciled.

(b) Under the micro, small and medium enterprises development Act, 2006 certain disclosure relating to amounts due to micro small and medium enterprises and remained unpaid principal or interest due there on, interest paid are required to be made. The company has not made such disclosure.

Qualified Opinion

7. In our opinion and to the best of our information and according to the explanations given to us except for the effect of the matters described on 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 March 31,2015;

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

c) In the Case of the Case Flow Statement, of the Cash Flows For the Year ended on that date.

8. Emphasis of Matters

We draw attention to the following matters in the notes to the financial statements:

a) The company has suffered substantial losses and due to this its entire net worth has been fully eroded. The company has incurred a net loss during the current and previous year (s) and, the company's current liabilities exceeded its current assets as at the balance sheet date. These conditions, along with other matters. Indicate the existence of a material uncertainty that may cast significant doubt about the company's ability to continue as a going concern. However since operation are continued the financial statements of the company have been prepared on a going concern basis for the reasons stated in the said note.(refer note no. 30} b) The company has been registered with the board for industrial and financial Reconstruction (BIFR) since sept .2002 The company's scheme for reconstruction and other related matters are pending before BIFR.

Report on other Legal and Regulatory Requirements

9. As required by the Companies (Auditor's Report) Order, 2015 ("the Order"), issued by the Central Government of India in terms of sub section (11) of section 143 of the Companies Act, 2013, we give in Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

(a) We have sought and except for matters described in the basis for qualified opinion paragraph, 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 possible effects of the matters 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 appears from our examination of those books.

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

(d) Except for the possible effects of the matter described in the basis for qualified opinion paragraph , in our opinion, the balance sheet, statement of profit and loss and cash flow statement comply with the accounting standards specified under section 133 of the act, rule 7 of the companies (Account) Rules,2013;

(e) On the basis of written representations received from the directors as on 31 March, 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.

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statement (Refer Note 26 to the financial statements);

(ii) The Company did not have any material foreseeable losses, in respect of long term contracts including derivative contracts.

(iii) There is no delay in transferring the amount, required to be transferred to the Investor Education and Protection Fund.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF ROYAL CUSHION VINYL PRODUCTS LTD, ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2015.

(Referred to in paragraph 9 under the heading of "Report on other legal and regulatory requirements" of our report of even date)

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

b) Major portion of fixed assets has been 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 interval having regards to the size of the Company and nature of its business. No material discrepancies were noticed on such physical verification.

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

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) On the basis of our examination of Inventory records, in our opinion, the Company is maintaining proper records of Inventory. The discrepancies notices on physical verification between the physical stock and book records were not material and have been properly dealt with in the books of accounts.

3. a) The Company has granted unsecured loan to Companies covered in the Registered maintain u/s 189 of the Companies Act. 2013.

b) In our opinion, the Companies to whom advance in the nature of loan is granted there is no stipulation for repayment thereof, and no interest is charged on the said loan granted. As per the information and explanation given to us the said loan is repayable on demand.

c) we have been informed that the Company is taking reasonable steps to recover the principal of loan in case where overdue amount is more than Rs. 1 lakh.

4. In our opinion and according to the information and explanations given to us, there are, having regard to the fact that certain items purchased /sold are of unique and social nature and suitable alternative sources do not exist to obtain comparative quotations, there are adequate internal control procedures commensurate with the size of company and the nature of its business, for the purchases of inventories and fixed assets and for the sales of goods, and services. During the course of our audit, we have not observed any major weakness in the internal controls.

5. In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from public during the year. Accordingly the provisions of clause (v) of the companies (Auditor's Report) order 2015, are not applicable to the company.

6. According to the information and explanations given to us, in our opinion , the Company have , prima facie, made and maintained the prescribed cost records pursuant to the Companies (Cost records and audit) Rules, 2014 as amended, prescribed by the cental government under sub section (1) of section 148 of the Companies Act 2013, wherever applicable. We have not, however made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

7-a) According to the records of the Company, the Company is generally not regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Valued Added Tax and Cess other statutory dues with the appropriate authorities.

According to the information and explanations given to us, the are undisputed statutory due which have remained outstanding as at 31st March, 2015, for a period of more than six months from the day they become payable are as under.

NAME OF THE STATUTE NATURE OF THE DUE AMOUNT

Custom Act Custom Duty 76,92,34,686/-

b) The disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under.

Sr. Name of the Status Nature of the due Amount No.

1 The Central Excise Act Custom Duty 21,05,053/-

2 The FERA Act Penalty 1,00,00,000/-

Sr. Name of the Status Period to Which Forum where No. the amount relate dispute is Pending

1 The Central Excise Various Year Commissioner Act Vadodara

2 The FERA Act 2002-03 Appellate Authority FERA New Delhi

c) according to information and explanations given to us, the amount required to be transferred to investor education and protection fund, in accordance with relevant provision of the Companies Act,1956 (1 of 1956) ad rules made there under has been transferred to such fund.

8) The accumulated losses of the Company as at the end of financial year are more than 50% of its net worth. The Company has incurred Cash Losses during the financial year covered by the Audit and also has incurred Cash losses during the immediately preceding financial year.

9) The Company has defaulted in repayment of dues to financial institution and Banks for the period exceeding 5 years The Company has been registered with the board for industrial and financial reconstructions (BIFR). The loan amount is payable after the final decision of BIFR.

10) In our opinion and according to information and explanations given to us the company has not given any guarantee for loans taken by others from bank or financial institutions during the year.

11) The company has not taken any term loan during the year.

12) To the best of our knowledge and belief and according to the information and explanations given to us, no material fraud on or by the company was noticed or reported during the year.

FOR CHANDRAKANT & SEVANTILAL & J.K. SHAH & CO. Chartered Accountants PLACE : VADODARA. Firm Registration No. 101676W DATE : 30/05/2015 Sd/- (H.B. SHAH) PARTNER MEMBERSHIP NO. 016642

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Mar 31, 2014

1. We have audited the accompanying Financial Statements of ROYAL CUSHION VINYL PRODUCTS LIMITED which comprise the Balance Sheet as at 31st March 2014, 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:

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

Auditors'' Responsibility:

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

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

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

Opinion

6. In our opinion, and to the best of our information and according to the explanations given to us, the aforesaid financial statements subjects to:

i) Non disclosure of amount(s) owned to small and medium scale industrial undertakings (Refer Note No.:- 29)

ii) Non reconciliation of accounts and balances in respect of Loans from Banks/Financial Institutions. (Refer Note No.: 33)

iii) Non provision for Gratuity liability as required by Accounting Standards 15 ''Employee Benefits''. (Refer Note No.: 39)

iv) Non-ascertainment and non-accounting of impairment loss of Assets of Unit-III as required by Accounting Standard 28 ''Impairment of Assets''. (Refer Note No.: 40)

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; and

b. In the case of the statement of Prof it and Loss, of the Loss for the year ended on that date.

c. In the case of Cash Flow statement, of the Cash Flows for the year ended on that date;

Report on Other Legal and Regulatory Requirements

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

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

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of the 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 BalanceSheet,statement of Profit and Loss, and Cash Flows statement dealt with by this report are in agreement with the books of account.

d) In our opinion Subject to non-provision for Gratuity liability and non ascertainment and non accounting of impairment loss in respect of its Assets of Unit-III, the Balance Sheet, statement of Profit and Loss, and Cash Flow statement Comply with the Accounting Standards referred to in sub-section (3C) of section 211of the Companies Act 1956;

e) On the bases of written representations received from the directors as on March 31st, 2014, and taken on record by the Board of Directors none of the directors is disqualified as on March 31st, 2014 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT ON THE ACCOUNTS OF ROYAL CUSHION VINYL PRODUCTS LIMITED FOR THE YEAR ENDED 31ST MARCH, 2014.

(Referred to in paragraph 7 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date)

1. a) The Company has maintained proper records to show full particulars including quantitative details and situation of Fixed Assets but, they need to be updated so as to include in the said register the addition made during each year as also allocation of the expenses capitalized to the relevant items of Fixed Assets and year wise depreciation provided in respect of each Asset.

b) As informed, the Fixed Assets have not been physically verified by the management, during the current year. Accordingly, discrepancies, if any, cannot be ascertained and reported.

c) There has not been any substantial disposal of fixed assets during the year.

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

b) In our opinion, the procedures of physical verification of Inventory (excepting inadequate/no prescribed procedure for identification and determination of non-moving, slow moving and/or unusable or non saleable items of stocks) followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) The Company had taken unsecured loan from Twenty One companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 69,88,95,311 and the year end balance of loans taken from such companies and other parties was Rs. 68,24,28,992. As per the records of the Company it has not granted any loans secured/unsecured to companies, firms or other parties covered in the register maintained u/s 301 of the Companies Act, 1956.

b) In our opinion, the rate of interest, where applicable, and other terms and conditions on which loans have been taken from Companies and other parties, listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

c) The Company is regular in repaying the principal amounts wherever stipulated and has been regular in the payment of interest wherever stipulated.

4. In our opinion and according to the information and explanations given to us, having regard to the fact that certain items purchased/sold are of unique and special nature and suitable alternative sources do not exist to obtain comparative quotations, 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, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in internal controls.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into 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, having regard to the fact that certain items purchase/sold are of unique and special nature and suitable alternative sources do not exist to obtain comparative quotations, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance to 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 prices which are reasonable having regard to the prevailing market prices at the relevant time and at the prices at which the transactions for similar goods have been made with other parties.

6. In Our Opinion, the Company has not complied with the provision of Section 58 A of the companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975 in so far as the return of deposit as required under Section 10 of the Act have not been filed with concerned authorities and the Company has not maintained the liquid assets as required by Rule 3(A) of Companies (Acceptance of Deposits) Rules, 1975.

7. The Company does not have an Internal Audit System.

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

9. a) According to the records of the Company, the Company is generally not regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax deducted at source, Sales tax, Customs Duty, Cess and other statutory dues applicable to it with the appropriate authorities.

b) According to the information and explanations given to us, undisputed amounts payable in respect of Wealth tax, Custom Duty, Sales tax, Excise Duty, Fringe Benefit Tax etc which have remained outstanding as at 31st March, 2014 for a period of more than six months from the date they become payable are as under:

Name of the Statute Nature of the dues Amount (Rs.)

Customs Act, (Refer Note No.30) Custom Duty for the various Years 73,14,09,612

Fringe Benefit Tax For the year 2007-2008 8,44,149

For the year 2008-2009 6,28,867

c) The disputed statutory dues that have not been deposited on account of disputed matters pending before appropriate authorities are as under:

Name of the Status Nature of Dues Amount (Rs.) Forum where dispute is pending

The Central Excise Appellate Tribunal, Act. Excise Duty 5,29,617 Mumbai

The Central Excise Commissioner, Act. Custom Duty 21,05,053 Vadodara

The Central Excise Commissioner, Act. Service Tax 2,92,730 Vadodara

The FERA Act. Penalty 1,00,00,000 Appellate Authority FERA New Delhi

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

11. The company has defaulted in repayment of dues to the Financial Institution and Banks for the period exceeding Five years. The Company has been registered with the Board For Industrial and Financial Reconstruction (BIFR). The Loan amount is payable after the final decision of BIFR.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not carrying on the chit fund business; hence, the provisions of any special statute applicable to chit fund are not applicable.

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

15. In our opinion and according to the information and explanations given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions during the year.

16. The Company has not taken any term loan during the year.

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 investments. No long-term funds have been used to finance short-term assets.

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. Since the Company does not have any debenture, the question of creation of securities does not arise.

20. Since the Company has not raised money by public issue, Clause (xx) of the Order is not applicable.

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

For Chandrakant & Sevantilal & J.K. Shah & Co. Chartered Accountants Firm registration number: 101676W

(H. B. SHAH) Place: VADODARA Partner Date: 10th June, 2014 Membership Number: 016642

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Mar 31, 2013

Report on Financial Statements

1. We have audited the accompanying Financial Statements of ROYAL CUSHION VINYL PRODUCTS LIMITED which comprise the Balance Sheet as at 31st March 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:

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

Auditors'' Responsibility:

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

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

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

6. In our opinion, and to the best of our information and according to the explanations given to us, the aforesaid financial statements subjects to:

i) Non disclosure of amount(s) owned to small and medium scale industrial undertakings (Refer Note No.: 29) II) Non reconciliation of accounts and balances in respect of Loans from Banks / Financial Institutions. (Refer Note No.: 33) ill) Non provision for Gratuity liability as required by Accounting Standards 15 ''Employee Benefits''. (Refer Note No.: 39) iv) Non-ascertainment and non-accounting of Impairment loss of Assets of Unit - III as required by Accounting Standard 28

''Impairment of Assets''. (Refer Note No.: 40) 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; and

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

c. In the case of Cash Flow statement, of the Cash Flows for the year ended on that date; Report on Other Legal and Regulatory Requirements

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

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

a) We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of the 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, statement of Profit and Loss, and Cash Flows statement dealt with by this report are in agreement with the books of account

d) In our opinion Subject to non-provision for Gratuity liability and non ascertainment and non accounting of impairment loss in respect of its Assets of Unit - III, the Balance Sheet, statement of Profit and Loss, and Cash Flow statement Comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act 1956;

e) On the bases 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 clause (g) of sub-section(l) of section 274 of the Companies act, 1956.

ANNEXURE TO THE AUDITORS'' REPORT ON THE ACCOUNTS OF ROYAL CUSHION VINYL PRODUCTS LIMITED FOR THE YEAR ENDED 31st MARCH, 2013.

(Referred to in Paragraph 8 under the heading "Report on other legal & regulatory requirements" at our report on even date)

1. a) The Company has maintained proper records to show full particulars including quantitative details and situation of Fixed Assets but, they need to be updated so as to include in the said register the addition made during each year as also allocation of the expenses capitalized to the relevant items of Fixed Assets and year wise depreciation provided in respect of each Asset.

b) As informed, the Fixed Assets have not been physically verified by the management, during the current year. Accordingly, discrepancies, if any, cannot be ascertained and reported.

c) There has not been any substantial disposal of fixed assets during the year.

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

b) In our opinion, the procedures of physical verification of Inventory (excepting inadequate/no prescribed procedure for identification and determination of non-moving, slow moving and/or unusable or non saleable items of stocks) followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) The Company had taken unsecured loan from Twenty One companies and other parties covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 670249047 and the year end balance of loans taken from such companies and other parties was Rs. 616539064. The Company has granted unsecured loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 2177812 and the year end balance of loan granted to such company was Rs. 2177812.

b) In our opinion, the rate of interest, where applicable, and other terms and conditions on which loans have been taken from/granted to Companies, listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company except interest free advance in the nature of loan given to the Company during the year aggregating to Rs. 2177812.

c) The Company is regular in repaying the principal amounts wherever stipulated and has been regular in the payment of interest wherever stipulated. The Company to whom advance in the nature of Loan is granted there is no stipulation for repayment thereof.

4. In our opinion and according to the information and explanations given to us, having regard to the fact that certain items purchased/sold are of unique and special nature and suitable alternative sources do not exist to obtain comparative quotations, 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, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in internal controls.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into 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, having regard to the fact that certain items purchase/sold are of unique and special nature and suitable alternative sources do not exist to obtain comparative quotations, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance to 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 prices which are reasonable having regard to the prevailing market prices at the relevant time and at the prices at which the transactions for similar goods have been made with other parties.

6. In Our Opinion, the Company has not complied with the provision of Section 58 A of the companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975 in so far as the return of deposit as required under Section 10 of the Act have not been filed with concerned authorities and the Company has not maintained the liquid assets as required by Rule 3(A) of Companies (Acceptance of Deposits) Rules, 1975.

7. The Company does not have an Internal Audit System.

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

9. a) According to the records of the Company, the Company is generally not regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax deducted at source, Sales tax, Customs Duty, Cess and other statutory dues applicable to it with the appropriate authorities.

b) According to the information and explanations given to us, undisputed amounts payable in respect of Wealth tax, Custom Duty, Sales tax, Excise Duty, Fringe Benefit Tax etc which have remained outstanding as at 31st March, 2013 for a period of more than six months from the date they become payable are as under:



Name of the Statute Nature of the dues Amount (Rs.)

Customs Act (Ref. Note No. 30) Custom Duty for the various years 69,35,84,538

Fringe Benefit Tax For the year 2007-2008 8,44,149

For the year 2008-2009 6,28,867

c) The disputed statutory dues that have not been deposited on account of disputed matters pending before apporpriate authorities are as under:

Name of the Status Nature of Dues Amount (Rs.) Forum where dispute Is pending

The Central Excise Act. Excise Duty 529,617 Appellate Tribunal, Mumbai

The Central Excise Act. Custom Duty 2,105,053 Commissioner, Vadodara

The Central Excise Act. Service Tax 2,92,730 Commissioner, Vadodara

The Income Tax Act. Income Tax Penalty 28,562 Commissioner,Mumbai

The Fera Act Penalty 1,00,00,000 Appellat Authority FERA New Delhi

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

11. The company has defaulted in repayment of dues to the Financial Institution and Banks for the period exceeding Five years. The Company has been registered with the Board For Industrial and Financial Reconstruction (BIFR). The Loan amount is payable after the final decision of BIFR.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not carrying on the chit fund business; hence, the provisions of any special statute applicable to chit fund are not applicable.

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

15. In our opinion and according to the information and explanations given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions during the year.

16. The Term Loans were applied for the purpose for which the Loan were obtained.

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 investments. No long-term funds have been used to finance short-term assets.

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. Since the Company does not have any debenture, the question of creation of securities does not arise.

20. Since the Company has not raised money by public issue, Clause (xx) of the Order is not applicable.

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



FOR CHANDRAKANT & SEVANTILAL & J.K.SHAH & CO.,

Chartered Accountants

Firm Registration No. 101676W



(H.B.SHAH)

Place: Vadodara Partner

Date : 30th May, 2013 Membership No. 16642

---

Mar 31, 2012

We have audited the attached Balance Sheet of ROYAL CUSHION VINYL PRODUCTS LIMITED, as at 31st March, 2012 and also the annexed Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date. 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.

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

1) As required by the Companies (Auditors' Report) order, 2003 as amended by Companies (Auditor's Report) (Amendment) order, 2004 (together 'the order') issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956, and on the basis of the information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we give in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order.

2) FURTHER AND SUBJECT TO OUR COMMENTS IN THE ANNEXURE REFERRED TO IN PARAGRAPH 1 ABOVE

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, Subject to treatment of certain expenses as deferred revenue expenditure, non- provision for Gratuity liability and non ascertainment and non accounting of impairment loss in respect of its Assets of Unit - III, proper books of account as required by law have been kept by the Company so far as appears from our examination of the books.

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

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

e) In our opinion the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the other Accounting Standards as refereed to in the Section 211(3C) of the Companies Act, 1956 and

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subjects to:

i) Non compliance of Accounting Standard 26 "INTANGIBLE ASSETS "by treating certain expenditure as deferred revenue expenditure. (Refer Note No.: 29)

ii) Non disclosure of amount(s) owned to small scale industrial undertakings (Refer Note No:- 30)

iii) Non reconciliation of accounts and balances in respect of Loans from Banks / Financial Institutions. (Refer Note No : 34)

iv) Non provision for Gratuity liability as required by Accounting Standards 15 'Employee Benefits'. (Refer Note No. : 40)

v) Non-ascertainment and non-accounting of impairment loss of Assets of Unit - III as required by Accounting Standard 28 'Impairment of Assets'. (Refer Note No. : 41)

and read with the other notes appearing thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

i) in the case of the Balance Sheet of the state of affairs, of the Company as at 31st March, 2012 and;

ii) in the case of the Statement of Profit and Loss of the Loss for the year ended on that date.

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

ANNEXURE TO THE AUDITORS' REPORT ON THE ACCOUNTS OF ROYAL CUSHION VINYL PRODUCTS LIMITED FOR THE YEAR ENDED 31st MARCH, 2012.

(Referred to in Paragraph 1 thereof)

1. a) The Company has maintained proper records to show full particulars including quantitative details and situation of Fixed Assets but, they need to be updated so as to include in the said register the addition made during each year as also allocation of the expenses capitalized to the relevant items of Fixed Assets and year wise depreciation provided in respect of each Asset.

b) As informed, the Fixed Assets have not been physically verified by the management, during the current year. Accordingly, discrepancies, if any, cannot be ascertained and reported.

c) There has not been any substantial disposal of fixed assets during the year.

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

b) In our opinion, the procedures of physical verification of Inventory (excepting inadequate/no prescribed procedure for identification and determination of non-moving, slow moving and/or unusable or non saleable items of stocks) followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) The Company had taken unsecured loan from fourteen companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 197994574 and the year end balance of loans taken from such companies was Rs. 188960674. The Company has granted unsecured loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 2163829 and the year end balance of loan granted to such company was Rs. 2163829.

b) In our opinion, the rate of interest, where applicable, and other terms and conditions on which loans have been taken from/granted to Companies, listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company except interest free advance in the nature of loan given to the Company during the year aggregating to Rs. 2163829.

c) The Company is regular in repaying the principal amounts wherever stipulated and has been regular in the payment of interest wherever stipulated. The Company to whom advance in the nature of Loan is granted there is no stipulation for repayment thereof.

4. In our opinion and according to the information and explanations given to us, having regard to the fact that certain items purchased/sold are of unique and special nature and suitable alternative sources do not exist to obtain comparative quotations, 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, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in internal controls.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into 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, having regard to the fact that certain items purchase/sold are of unique and special nature and suitable alternative sources do not exist to obtain comparative quotations, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance to 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 prices which are reasonable having regard to the prevailing market prices at the relevant time and at the prices at which the transactions for similar goods have been made with other parties.

6. In Our Opinion, the Company has not complied with the provision of Section 58 A of the companies Act, 1956 and the Companies (Acceptance of Deposits) Rule 1975 in so far as the return of deposit as required under Section 10 of the Act have not been filed with concerned authorities and the Company has not maintained the liquid assets as required by Rule 3(A) of Companies (Acceptance of Deposits) Rules, 1975.

7. The Company does not have an Internal Audit System.

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

9. a) According to the records of the Company, the Company is generally not regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax deducted at source, Sales tax, Customs Duty, Cess and other statutory dues applicable to it with the appropriate authorities.

b) According to the information and explanations given to us, undisputed amounts payable in respect of Wealth tax, Custom Duty, Sales tax, Excise Duty, Fringe Benefit Tax etc which have remained outstanding as at 31st March, 2012 for a period of more than six months from the date they become payable are as under:

Name of the Statute Nature of the dues Amount (Rs.)

Customs Act Custom Duty for the various years 65,57,59,464

Sales Tax Act GOA Local Sales Tax for the year 2008-2009 10,48,810

Fringe Benefit Tax For the year 2007-2008 8,44,149

For the year 2008-2009 6,28,867

Provident Fund For the year 2011-12 4,80,199

c) According to the information and explanations given to us there are no dues outstanding in respect of Sales tax, Income tax, Customs duty, Wealth tax, and Cess on account of any dispute except the following disputed amount in respect of:

Name of the Status Nature of Dues Amount (Rs.)Forum where dispute is pending

The Central Excise Act. Excise Duty 529,617 Appellate Tribunal, Mumbai

The Central Excise Act. Custom Duty 2,105,053 Commissioner, vadodara

The Central Excise Act. Service Tax 2,92,730 Commissioner, vadodara

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

11. The company has defaulted in repayment of dues to the Financial Institution and Banks for the period exceeding Five years. The Company has been registered with the Board For Industrial and Financial Reconstruction (BIFR). The Loan amount is payable after the final decision of BIFR.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not carrying on the chit fund business; hence, the provisions of any special statute applicable to chit fund are not applicable.

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

15. In our opinion and according to the information and explanations given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions during the year.

16. The Term Loans were applied for the purpose for which the Loan were obtained.

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 investments. No long-term funds have been used to finance short-term assets.

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. Since the Company does not raised have any debenture, the question of creation of securities does not arise.

20. Since the Company has not raised money by public issue, Clause (xx) of the Order is not applicable.

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

FOR CHANDRAKANT & SEVANTILAL & J.K.SHAH & CO.,

Chartered Accountants Firm Registration No. 101676W

(H.B.SHAH)

Place : Vadodara Partner

Date : 31st July, 2012 Membership No. 16642

---

Mar 31, 2010

We have audited the attached Balance Sheet of ROYAL CUSHION VINYL PRODUCTS LIMITED, as at 31st March, 2010 and also the annexed Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date. 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.

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

1) As required by the Companies (Auditors Report) order, 2003 as amended by Companies (Auditors Report) (Amendment) order, 2004 (together the order) issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956, and on the basis of the information and explanation given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we give in the Annexure a statement on the matters specified in the paragraphs 4 and 5 of the said order.

2) FURTHER AND SUBJECT TO OUR COMMENTS IN THE ANNEXURE REFERRED TO IN PARAGRAPH 1 ABOVE

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, Subject to treatment of certain expenses as deferred revenue expenditure, non-provision for Gratuity liability and non ascertainment and non accounting of impairment loss in respect of its Assets of Unit – III, proper books of account as required by law have been kept by the Company so far as appears from our examination of the books.

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

d) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause

(g) of sub-section (1) of section 274 of the Companies Act, 1956.

e) In our opinion the Balance Sheet, Profit and Loss Account, and the Cash Flow Statement dealt with by this report comply with the other Accounting Standards as refereed to in the Section 211(3C) of the Companies Act, 1956 and

f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subjects to:

i) Non compliance of Accounting Standard 26 " INTANGIBLE ASSETS " by treating certain expenditure as deferred revenue expenditure. (Refer Note No.: 5)

ii) Non disclosure of amount(s) owned to small scale industrial undertakings (Refer Note No: 6)

iii) Non reconciliation of accounts and balances in respect of Loans from Banks / Financial Institutions. (Refer Note No.: 11)

iv) Non provision for Gratuity liability as required by Accounting Standards 15 Employee Benefits. (Refer Note No.: 17)

v) Non-ascertainment and non- accounting of impairment loss of Assets of Unit – III as required by Accounting Standard 28 Impairment of Assets. (Refer Note No. : 18) and read with the other notes appearing thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India.

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

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

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



ANNEXURE TO THE AUDITORS REPORT ON THE ACCOUNTS OF ROYAL CUSHION VINYL PRODUCTS LIMITED FOR THE YEAR ENDED 31ST MARCH, 2010.

(Referred to in Paragraph 1 thereof)

1. a) The Company has maintained proper records to show full particulars including quantitative details and situation of Fixed Assets but, they need to be updated so as to include in the said register the addition made during each year as also allocation of the expenses capitalised to the relevant items of Fixed Assets and yearwise depreciation provided in respect of each Asset.

b) As informed, the Fixed Assets have not been physically verified by the management, during the current year. Accordingly, discrepancies, if any, cannot be ascertained and reported.

c) There has not been any substantial disposal of fixed assets during the year.

2. a] The inventory has been physically verified during the year by the management. In our opinion, the frequency

of verification is reasonable.

b) In our opinion, the procedures of physical verification of Inventory (excepting inadequate/no prescribed procedure for identification and determination of non-moving, slow moving and/or unusable or non saleable items of stocks) followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) The Company had taken unsecured loan from Thirteen companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1781.92 Lacs and the year end balance of loans taken from such companies was Rs. 1748.90 Lacs. The company has granted unsecured loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 21.47 Lacs and the year end balance of loan granted to such company was Rs.21.47 Lacs.

b) In our opinion, the rate of interest, where applicable, and other terms and conditions on which loans have been taken from/granted to Companies, listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company except interest free advance in the nature of loan given to the Company during the year aggregating to Rs. 21.47 Lacs.

c) The Company is regular in repaying the principal amounts wherever stipulated and has been regular in the payment of interest wherever stipulated.

4. In our opinion and according to the information and explanations given to us, having regard to the fact that certain items purchased/sold are of unique and special nature and suitable alternative sources do not exist to obtain comparative quotations, 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, we have neither observed nor have been informed of any continuing failure to correct major weaknesses in internal controls.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into 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, having regard to the fact that certain items purchase/sold are of unique and special nature and suitable alternative sources do not exist to obtain comparative quotations, the transactions made in pursuance of contracts or arrangements entered into the register in pursuance to Section 301 of the Companies Act, 1956 and exceeding the value of Rs.5 Lacs in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time and at the prices at which the transactions for similar goods have been made with other parties.

6. During the year the Company has not accepted any deposits to which the provisions of Section 58A and 58AA of the Companies Act, 1956 and the rules framed thereunder would apply.

7. The Company does not have an Internal Audit System.

8. The Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Companies Act, 1956 for any of the products of the Company.

9. a) According to the records of the Company, the Company is generally not regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax deducted at source, Sales tax, Customs Duty, Cess and other statutory dues applicable to it with the appropriate authorities.

b) According to the information and explanations given to us, undisputed amounts payable in respect of Wealth tax, Custom Duty, Sales tax, Excise Duty, Fringe Benefit Tax etc which have remained outstanding as at 31st March, 2010 for a period of more than six months from the date they become payable are as under:



Name of the Statute Nature of the dues Amount (Rs.)

Customs Act, (Refer Note No.8) Custom Duty for the various years 59,90,21,853

Sales Tax Act GOA Local Sales Tax for the year 2008-2009 10,48,810

VAT Baroda For the year 2009-2010 14,63,504

Fringe Benefit Tax For the year 2007-2008 8,44,149

For the year 2008-09 6,28,867

Provident Fund For the year 2008-2009 12,50,647

ESIC For the year 2009-2010 28,246



c) According to the information and explanations given to us there are no dues outstanding in respect of Sales tax, Income tax, Customs duty, Wealth tax, and Cess on account of any dispute except the following disputed amount in respect of:





Name of the Status Nature of Dues Amount(Rs.) Forum where dispute is pending

The Central Excise Act. Excise Duty 2.42 Lacs Commissioner, Vadodara.

The Central Excise Act. Excise Duty 6.35 Lacs Appellate Tribunal, Mumbai

The Income Tax Act Income Tax 17.24 Lacs CIT (Appeal)



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

11. The company has defaulted in repayment of dues to the Financial Institution and Banks for the period exceeding Five years. The entire Loan amount including Interest is due for payment as shown in Schedule C forming part of Accounts.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not carrying on the chit fund business, hence, the provisions of any special statute applicable to chit fund are not applicable.

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

15. In our opinion and according to the information and explanations given to us the Company has not given any guarantee for loans taken by others from bank or financial institutions during the year.

16. The Company has not raised any term loans from any party during the year.

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 investments. No long-term funds have been used to finance short-term assets.

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. There are no debentures issued and outstanding during the year.

20. During the year, the Company has not raised money by public issue.

Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.



FOR CHANDRAKANT & SEVANTILAL & J.K.SHAH & CO., Chartered Accountants

Firm Registration No. 101676W (H.B.SHAH)

Partner Membership No. 16642

Place : Baroda Date : 15 th July, 2010