Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation 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 adequate 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.

Auditor's Responsibility

My responsibility is to express an opinion on these financial statements based on my audit.

I 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.

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 controls system over financial reporting and 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 Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

Attention is drawn to the following:

a. As stated in Note No. 15 to the accounts, the company has included in other non- current assets a sum of Rs. 428.00 lacs as deferred interest expenditure. In the past the company had availed a term loan ICICI Bank Ltd (which was under OTS with them) which was subsequently assigned by ICICI to Kotak Mahindra Bank Ltd. Consequent upon assignment The Kotak Mahindra Bank Ltd had filed suit against the company in DRAT for recovery. The company has settled the said loan with Kotak Mahindra Bank Ltd for an agreed amount of Rs. 750 lacs of which Rs. 325 lacs was deposited before DRAT and Rs. 425 lacs is paid on or before 31/05/2013 and accordingly no balance is now outstanding.

b. The company had a transferred balance in Capital Reserve of Rs. 150 lacs when the loan was settled with ICICI Bank Ltd. The said balance is now reversed from Capital Reserve and balance Rs. 600 lacs represent the amount of interest from the year 2002 to the date of settlement. The company has deferred this interest amount of Rs. 600 lacs to be written off over a period of 7 years and have accordingly charged Rs. 86 lacs each year in the last two years but has not charged Rs. 86.00 lacs to the statement of profit and loss for the year under audit and balance Rs. 428.00 lacs is carried as deferred revenue expenditure.

c. Had the items reported in para 4 (b) and (c) above been charged to the statement of profit and loss, the profit for the year of Rs. 18.53 lacs would have been resulted into loss of Rs. 502.22 lacs. To that extent it has resulted into overstatement of year end net Current Assets and Reserves and Surplus by Rs. 502.22 lacs.

d. No provision is made for payment for gratuity on actuarial basis as on 31st March 2015 hence its impact on the net profit could not be ascertained as referred to Note. No. 27(b) in the notes on accounts.

In my opinion and to the best of my information and according to the explanations given to me, except as reported in para 4(a) to (e) above, the financial statements give the information required by the Act in the manner so required and except as reported in para 4(a) to (e) above, give a true and fair view in conformity with the accounting principles generally accepted in India:

Report on other Legal and Regulatory Requirements

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

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

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

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

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

e) On the basis of written representations received from the directors as on 31 March, 2015, 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) In my opinion and to the best of my information and according to the explanations given to me, I report as under with respect to other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014:

g) In my opinion, the company has adequate internal financial control systems in place and the same are effective and commensurate with the nature of business of the company and the scale of its operations.

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 does not have any pending litigations which would impact its financial position.

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

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

Annexure to the Auditors' Report

Referred to in paragraph 1 of our report of even date under the heading "Report on Other Legal and Regulatory Requirements"

(i) In respect of its fixed assets:

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

b) Fixed assets have been physically verified by the management during the year in accordance with the phased programme of verification adopted by the management which, in my opinion, provides for physical verification of all the fixed assets at reasonable intervals. No material discrepancies were noticed on such verification.

(ii) In respect of its inventory:

a) The inventories of finished goods, semi-finished goods, stores, spare parts and raw materials were physically verified at regular intervals by the Management.

b) The procedures of physical verification of inventories followed by the Management

c) were reasonable and adequate in relation to the size of the Company and the nature of its business.

d) The Company has maintained proper records of its inventories. According to information and explanation given to me, the discrepancies noticed on physical verification of stocks as compared to book records were not material and have been properly dealt with in the books of account.

(iii) The Company has not granted any loans to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act, 2013 and therefore paragraph 3(iii) of the Order is not applicable.

(iv) In my opinion, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory, fixed assets and for the sale of goods and services. During the course of my Audit, I have not observed any continuing failure to correct major weaknesses in internal control.

(v) The company has not accepted any deposits from the public during the year except the unsecured advances received from the directors and their relatives/associates.

(vi) I have broadly reviewed the cost records maintained by the Company pursuant to the the Rules made by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been made and maintained. I have, however, not made a detailed examination of these records with a view to determining whether they are accurate or complete.

(vii) In respect of statutory dues:

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

b) There were no undisputed amounts payable in respect of Income-tax, Wealth Tax, Custom Duty, Excise Duty, Sales Tax, VAT, Cess and other material statutory dues in arrears/were outstanding as at 31 March, 2015 for a period of more than six months from the date they became payable.

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

(viii) The company does not have the accumulated losses at the end of financial year. The company has not incurred any cash losses during the financial covered by my Audit and the immediately preceding financial year.

In arriving at the accumulated losses and net worth as above, I have considered the quantifications which are quantifiable in the audit reports of the years to which these losses pertain.

(ix) The Company has not defaulted in the repayment of dues to financial institutions and banks except the Special Capital Incentive in the form of loan of Rs. 3,16,139 which remained unpaid as at the date of the Balance Sheet.

(x) The company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xi) The Term loans taken by the company have been applied for the purpose for which they were raised.

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

Place : Solapur                                        G.M.PAWLE
                                                 Chartered Accountant
Date : 31st August 2015                         Membership No. : 032561