Auditor Report of Baroda Rayon Corporation Ltd.

Mar 31, 2025

We have audited the accompanying standalone financial statements of The Baroda Rayon Corporation Limited
(“the Company”), which comprise the Balance Sheet as at March 31, 2025, the Statement of Profit and Loss
(including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash
Flows for the year ended on that date, notes to financial statements and the significant accounting policies and
other explanatory information (hereinafter referred to as “the standalone financial statements”).

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

Basis of Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10)
of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the 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 financial statements under the provisions of the Act
and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.

Emphasis of matter

(i) We draw attention to Note 35 of accompanying standalone financial statements, some of the strategic
investors were supposed to introduce funds under rehabilitation scheme sanctioned by Board for
Industrial and Financial Reconstruction (BIFR), however the said investors could not introduce funds as
per stipulation. Consequently, Company’s rehabilitation process delayed and Company has forfeited
amount received from strategic investors for ?856.98 lakhs. Further, ?275.48 lakhs have been written off
for liabilities no longer payable. These amounts are treated under exceptional items of accompanying
standalone financial statements.

(ii) We draw attention to Note 30 of accompanying standalone financial statements, as per the Modified Draft
Rehabilitation Scheme (MDRS) the company had availed secured loans from strategic investors
amounting to ? 6321.87 lakhs which was overdue. However, during the year under review the said debts
were settled by way of Debt Settlement Agreement dated March 08, 2025. Further as per MDRS, the
company had also availed unsecured loans from various lenders for which the company has negotiated
and reached an agreement with the lenders to settle the amount of loans in the subsequent financial
year.

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.

The Key Audit Matter How the matter was addressed in our audit
Revenue recognition for real estate projects (as described in note 3.2(a) of the Notes to financial statements)
The Company applies Ind AS 115 ''Revenue from contracts with customers'' for recognition of revenue from real estate projects, which is being recognised at a point in time upon the Company satisfying its performance obligation and the customer obtaining control of the underlying asset. Considering application of Ind AS 115 involves significant judgement in identifying performance obligations and determining when ''control'' of the asset underlying the performance obligation is transferred to the customer, the same has been considered as key audit matter.	Our audit procedures included: • Read the Company''s revenue recognition accounting policies and assessed compliance of the policies with Ind AS 115; • Obtained and understood revenue recognition process including identification of performance obligations and determination of transfer of control of the asset underlying the performance obligation to the customer; • Read the legal opinion obtained by the Company to determine the point in time at which the control is transferred in accordance with the underlying agreements; • Tested, revenue related transactions with the underlying customer contracts and documents evidencing the transfer of control of the assets to the customer based on which revenue is recognized; • Assessed that the performance obligation is satisfied by the Company.
Pending Litigations (as described in note 27 of the standalone financial statements)
As on 31st March, 2025, the Company has recognised pending litigation and wage settlement to the extent it is crystallised. Considering the materiality of the amounts involved, the significant management judgement required in estimating various liabilities being inherently subjective, this matter has been identified as a key audit matter for the current year audit.	Our audit procedures included the following: • Obtained an understanding of management''s process and evaluated design and tested operating effectiveness of controls around identification of indicators of various pending litigations under Ind AS. • Financial liabilities at fair value through profit or loss include financial liabilities held for trading and designated upon initial recognition as at fair value through profit or loss.
Inventory Valuation
Refer Note 3.2(e) to the standalone financial statements which includes the accounting policies followed by the Company for valuation of inventory. The Company''s inventory comprises of ongoing and completed real estate projects. As at 31st March 2025, the carrying values of inventories amounts to 60891.10 lakhs. The inventories are carried at the lower of the cost and net realizable value (''NRV''). The determination of the NRV involves estimates based on prevailing market conditions, current prices and expected date of commencement and completion of the project, the estimated future selling price, cost to complete projects and selling costs. Considering significance of the amount of carrying value of inventories in the standalone financial statements and the involvement of significant estimation and judgement in such assessment of NRV, the same has been considered as key audit matter.	Our audit procedures/ tested included, among others: • Read and evaluated the accounting policies and disclosures made in the standalone financial statements with respect to inventories; • Understood and reviewed the management''s p r o c e s s and methodology of using key assumptions for determination of NRV of the inventories; • Tested the NRV of the inventories to its carrying value in books on sample basis; and • Where the Company involved specialists to perform valuations, we also performed the following procedures: • Obtained and read the valuation report used by the management for determining the NRV; • Considered the independence, competence and objectivity of the specialist involved in determination of valuation; and • Involved internal specialists to review the assumptions used by the management''s experts.

Information Other than the Standalone Financial Statements and Auditors'' Report Thereon

The Company''s Management and Board of Directors are responsible for the other information. The other
information comprises of Management Reports such as Board''s Report, Management Discussion and
Analysis, Corporate Governance Report and Business Responsibility Report (but does not include the
Standalone Financial Statements and our Auditors'' Report thereon) which we obtained prior to the date of this
Auditor''s Report, and the remaining section of the Company''s Annual Report, which are expected to be made
available to us after that date.

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

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

If, based on the work we have performed on the other information that we obtained prior to the date of this
Auditor''s Report, 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.

When we read the other sections of Annual Report (other than those mentioned above), if we conclude that
there is a material misstatement therein, we are required to communicate the matter to those charged with
governance and take necessary actions, as applicable under the applicable laws and regulations.

Responsibilities of Management for the Standalone Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with
respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the
financial position, financial performance including other comprehensive income, cash flows and changes in
equity of the Company in accordance with the accounting principles generally accepted in India, including the
Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with 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 of the assets of the Company
and for preventing and detecting frauds and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable and prudent; and 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 standalone Ind AS financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.

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

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

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

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for
expressing our opinion on whether the Company has adequate internal financial controls 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 standalone Ind AS financial statements,
including the disclosures, and whether the standalone Ind AS financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the standalone Ind AS financial statements for the financial year ended March
31, 2025 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law
or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of
doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order'''') issued by the Central
Government of India, in exercise of powers conferred by sub-section 11 of section 143 of the Act, and on
the basis of such checks of books and records of the Company as we considered appropriate and
according to the information and explanations given to us, we give in the “Annexure-A” attached hereto our
comments on the matters specified in the paragraphs 3 and 4 of the said Order.

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss, Statement of Changes in Equity and the 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 Emphasis of matter Paragraph, In our
opinion, the aforesaid financial statements comply with the Ind AS specified under Section 133 of the
Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

(e) On the basis of the written representations received from the directors as on March 31, 2025 taken on
record by the Board of Directors, none of the directors is disqualified as on March 31, 2025 from being
appointed as a director in terms 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 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 litigations on its financial position in its financial
statements (Refer Note 27 to the financial statements).

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

(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 or entity, including foreign
entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that, to the best of its knowledge and belief, 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, lend or invest in other persons or entities identified
in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

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

(v) Based on our examination which included test checks -

a) The Company uses accounting software for maintaining its books of account which has a
feature of recording audit trail (edit log) facility and the same has operated throughout the year for
all relevant transactions recorded in the software. Further, during the course of our audit we did
not come across any instance of audit trail feature being tampered with and

b) The Company has used Tally Prime software service provider, for maintaining its books of
account which has a feature of recording audit trail (edit log) facility and the same has operated
throughout the year for all relevant transactions recorded in the software except that in the
absence of sufficient information, we are unable to comment on whether audit trail feature of the
underlying database of the said software was enabled and operated throughout the year. Further,
during the course of our audit we did not come across any instance of audit trail feature being
tampered with in respect of Tally Prime.

For Kansariwala & Chevli
Chartered Accountants
(FRN 123689W)

Date: May 30, 2025 A. H. Chevli

Place: Surat Partner

Membership No. 038259
UDIN - 25038259BMIFJN9301

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Mar 31, 2024

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

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

Basis for Qualified Opinion

(i) Attention is drawn to Note 32(i) to the statement regarding non provision of interest on loan of

T157,29,49,931/- of overdue debts availed under the Modified Draft Restructuring Scheme (MDRS) till March, 2024. These stipulated overdue debts were not settled due to legal hurdle. Now the Company is in process to create the security of overdue unsecured loans along with the secured loans, which shall rank pari passu, with existing debt if any, after the interest is finalized on negotiation with lenders. Since the interest is not ascertained it is not provided in the books. To that extent the reported profit is overstated and other equity balance is overstated.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the 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 financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

i) We draw attention to Note 37 of accompanying standalone financial statements, as regards to the exceptional item of unsecured loan of ? 24,48,89,155/- which was forfeited pursuant to violation of agreement as per sanctioned BIFR scheme.

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.

The Key Audit Matter

How the matter was addressed in our audit

Refer Note 27 & 28 to the accompanying standalone financial statements: As on 31st March, 2024, the Company has recognised contingent liabilities, pending litigation and wage settlement to the extent it is crystallised. Considering the materiality of the amounts involved, the significant management judgement required in estimating various liabilities being inherently subjective, this matter has been identified as a key audit matter for the current year audit.

Our audit procedures included the following: Our procedures included, but were not limited to the following: (i) Obtained an understanding of management''s process and evaluated design and tested operating effectiveness of controls around identification of indicators of various pending litigations and contingent liabilities under Ind AS. (ii) Financial liabilities at fair value through profit or loss include financial liabilities held for trading and designated upon initial recognition as at fair value through profit or loss.

Information Other than the Standalone Financial Statements and Auditors’ Report Thereon

The Company''s Management and Board of Directors are responsible for the other information. The other information comprises of Management Reports such as Board''s Report, Management Discussion and Analysis, Corporate Governance Report and Business Responsibility Report (but does not include the Standalone Financial Statements and our Auditors'' Report thereon) which we obtained prior to the date of this Auditor''s Report, and the remaining section of the Company''s Annual Report, which are expected to be made available to us after that date.

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

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

If, based on the work we have performed on the other information that we obtained prior to the date of this Auditor''s Report, 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.

When we read the other sections of Annual Report (other than those mentioned above), if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the applicable laws and regulations.

Responsibilities of Management for the Standalone Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls 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 standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2024 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order'''') issued by the Central Government of India, in exercise of powers conferred by sub-section 11 of section 143 of the Act, and on the basis of such checks of books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the “Annexure-A” attached hereto our comments on the matters specified in the paragraphs 3 and 4 of the said Order.

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss, Statement of Changes in Equity and the 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 aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

(e) On the basis of the written representations received from the directors as on 31^st March, 2024 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2024 from being appointed as a director in terms 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 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 litigations on its financial position in its financial statements (Refer Note 28 to the financial statements).

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

(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 or entity, including foreign

entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) The management has represented that, to the best of its knowledge and belief, 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, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and

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

(v) Based on our examination which included test checks -

a) The Company uses accounting software for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with and

b) The Company has used Tally Prime software service provider, for maintaining its books of account which has a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software except that in the absence of sufficient information, we are unable to comment on whether audit trail feature of the underlying database of the said software was enabled and operated throughout the year. Further, during the course of our audit we did not come across any instance of audit trail feature being tampered with in respect of Tally Prime.

For Kansariwala & Chevli Chartered Accountants (FRN 123689W)

Date: 30^th May, 2024 A. H. Chevli

Place: Surat Partner

Membership No. 038259 UDIN - 24038259BKELCG4320

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Mar 31, 2023

BARODA RAYON CORPORATION LIMITED

Report on the Audit of the Standalone Financial Statements Qualified

Opinion

We have audited the accompanying standalone financial statements of The Baroda Rayon Corporation Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date, notes to financial statements and the significant accounting policies and other explanatory information (hereinafter referred to as “the standalone financial statements”).

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“the Act”) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“Ind AS”) and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, its Profit and total comprehensive income, changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

(i) Attention is drawn to Note 33(i) to the statement regarding non provision of interest on loan of

''197,76,91,423/- of overdue debts availed under the Modified Draft Restructuring Scheme (MDRS) till March, 2023. These stipulated overdue debts were not settled due to legal hurdle. Now the Company is in process to create the security of overdue unsecured loans along with the secured loans, which shall rank paripassu, with existing debt if any, after the interest is finalized on negotiation with lenders. Since the interest is not ascertained it is not provided in the books. To that extent the reported profit is overstated and other equity balance is overstated.

We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the 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 financial statements under the provisions of the Act and the rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter

i) We draw attention to Note 38 of accompanying standalone financial statements, as regards to the exceptional item of unsecured loan of ? 16,74,98,673/- which was forfeited pursuant to violation of agreement as per sanctioned BIFR scheme.

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.

The Key Audit Matter

How the matter was addressed in our audit

Refer Note 28 & 29 to the accompanying standalone financial statements: As on 31st March, 2023, the Company has recognised liabilities relating pending litigation, employees gratuities, wage settlement to the extent it is crystallised. Considering the materiality of the amounts involved, the significant management judgement required in estimating various liabilities being inherently subjective, this matter has been identified as a key audit matter for the current year audit.

Our audit procedures included the following: Our procedures included, but were not limited to the following: (i) Obtained an understanding of management''s process and evaluated design and tested operating effectiveness of controls around identification of indicators of various crystallized and contingent liabilities under Ind AS. (ii) Financial liabilities at fair value through profit or loss include financial liabilities held for trading and designated upon initial recognition as at fair value through profit or loss.

Information Other than the Standalone Financial Statements and Auditors’ Report Thereon

The Company''s Management and Board of Directors are responsible for the other information. The other information comprises of Management Reports such as Board''s Report, Management Discussion and Analysis, Corporate Governance Report and Business Responsibility Report (but does not include the Standalone Financial Statements and our Auditors'' Report thereon) which we obtained prior to the date of this Auditor''s Report, and the remaining section of the Company''s Annual Report, which are expected to be made available to us after that date.

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

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

If, based on the work we have performed on the other information that we obtained prior to the date of this Auditor''s Report, 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.

When we read the other sections of Annual Report (other than those mentioned above), if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions, as applicable under the applicable laws and regulations.

Responsibilities of Management for the Standalone Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

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

Auditor’s Responsibilities for the Audit of the Standalone Ind AS Financial Statements

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

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls 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 standalone Ind AS financial statements, including the disclosures, and whether the standalone Ind AS financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

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

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

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone Ind AS financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2020 (“the Order'''') issued by the Central Government of India, in exercise of powers conferred by sub-section 11 of section 143 of the Act, and on the basis of such checks of books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the “Annexure-A” attached hereto our comments on the matters specified in the paragraphs 3 and 4 of the said Order.

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss, Statement of Changes in Equity and the 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 aforesaid financial statements comply with the Ind AS specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended.

(e) On the basis of the written representations received from the directors as on 31^st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms 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 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 litigations on its financial position in its financialstatements (Refer Note 29 to the financial statements).

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

(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 or entity, including foreign entities

(“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

(b) In financial year 2021-2022, the company has started real estate business by converting its existing land reported under Property, plant & equipment into inventory. In the current year under review, the company has again done fair valuation of real estate held as inventory on the basis of valuation report obtained from Government Approved Valuer. This revised net realization value has resulted in increase in profit of ? 233,40,50,189/- for details refer to note 7 of financial statements.

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

For Kansariwala & Chevli Chartered Accountants (FRN 123689W)

Date: 30^th May, 2023 A. H. Chevli

Place: Surat Partner

Membership No. 038259 UDIN - 23038259BGWHEF6256

---

Mar 31, 2012

We have audited the attached Balance Sheet of THE BARODA RAYON CORPORATION LIMITED as at 31st March 2012 and also the Profit and Loss Account of the Company for the year ended 31st March 2012 annexed thereto and the Cash Flow Statements for the said year ended on that date. These financial statements aie the responsibility of the company,'s management Our responsibility is to express an opinion on these financial statements based on our audit

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

2. As required by the Companies (Auditors Report) Order2003 issued by the Central Government of India in terms of

Section 227 (4A) of the Companies Act, 1956 (hereinafter referred to as the Ace), we enclose in the annexure a statement on the matters specified in the paragraph 4 and 5 of the said order, to the extent applicable to the Company.

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

a) As stated in note No. 19 (a) of notes forming part of financial statements, the accounts have been prepared on going concern basis. However the net worth of the Company had been fully eroded due to the continued losses, the Company’s entire operations have been suspended since August 2008 and there are many legal cases pending against the Company which may affect the future functioning of the Company. In our 1 opinion, the Company is not a gang concern, though accounts have been prepared on historic cost basis.

No valuation reports is obtained for arriving at the fair market value of the assets, hence we are unable to report on the realizable value of the asset valuation as well as the provision for impairment In the absence of key personnel in accounting and finance departments and the non-availability of adequate data and information for its accounting compilation, the Company had to prepare the accounts ongoing concern basis. Consequently no adjustments have been made in the accounts relating to the recoverability of recorded assets and in respect of recorded liabilities and contingent liabilities that might devolve on the Company.

b) In view of huge accumulated losses of Rs.34474.70 lacs and financial constraints, there was loss of key personnel and staff responsible for financial and accounting matters, as such the financial information and accounting data were prepared on the bass of available information and we are expressing our opinion with such limitation, subject to above, 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

c) Except for the maintenance of cost records and cost accounts mentioned under section 209(1)(d) of the Companies Acf 1956, in our opinion, proper books of Accounts as required by Law have been kept by the Company so far as appears from our examinations of those books.

d) The Balance Sheet Profit & Loss Account and Cash Flow Statement dealt with this report are in agreement with the books of account

e) Except as discussed in paragraph referred below from3 (g)(i) to 3 g(xi), in our opinion, the Profit and Loss Account and Balance Sheet comply with the Accounting standards referred to in Sub Section (3c) of Section 211 of the Companies Act 1956 to the extent applicable to the Company.

f) In absence of the information related to the Corporate compliances, statutory records related to Registrar of Companies and qualification of directors as contemplated in Section 274 (1) (g) of the Companies Acf 1956, we are unable to express our opinion of qualification/ disqualification of directors for their appointment and reappointment

g) Attention is invited to

We are unable to express an opinion on the financial impact not ascertained by the Company, that may arise on account of impairment of assets related to discontinued operations for details refer to note 32 forming part of the financial statements. No separate disclosure has been made In the profit and loss account and Cash flow statements for the year for the discontinued operations. Non- disclosure of information with respect to discontinued operation and non-provision of impairment value in assets are inconsistent with the compliance of Accounting Standard - 24 relating to discontinuing operation and Accounting Standard -28 relating to Impairment of Assets.

II. The Company could not make full payment of settled past dues as desired in the terms of wage settlement agreement referred in note 22 forming part of the financial statements during its tenure and no fresh renewal agreement was entered as the agreement has expired. Subsequently, employee

Union has filed the litigation in September’ 2008 recovery of their total dues against the Company at Gujarat High court The Hon’ble High court has directed to resolve the litigation by way of arbitration process; accordingly Company has filed the necessary affidavit with Board. The matter is pending with the Board. We are unable to express any opinion on probable liabilities until disposal of final verdict in arbitration award.

III. The balances for Sundry Debtors, Sundry creditors, secured and unsecured loans, loans & advances, bank balances, statutory and other liabilities as on 31st March’ 2012 are subject to confirmation. The figures reported in the financial statement are as per the ledger account

IV. No Segment Information is prepared in the financial statement, which is contrary to Accounting Standard AS -17.

V. On account of closure of operation since August 2008, we have not physically verified the inventories, stores & spares, cash on hand and fixed assets of the Company as on 31* March’ 2012.

VI. No information is disclosed of related party disclosure in the financial statement, which is contrary to AS

18

VII. The Company has not made any provision for the decline in the value of investment related to investment in unquoted shares of Thai Baroda Industries Ltd for Rs. 574.84 lacs and equity shares in TAIB Capital Corporation Ltd for Rs. 24.50 lacs, which is contrary to the Accounting Standard 13.

VIII. The provision has been made for Gratuities, P.F, E.S.I.C. as per Company’s own estimate up to 31ST March’ 2009; no liabilities have been provided after discontinue operation. Hence the reported losses and accumulated losses are understated to the extent of such non-provision. The accounting of said employees dues are not as per the actuary valuation, which is contrary to Accounting Standard AS 15.

IX. No information is available regarding the amount payable to suppliers under Micro, Small and Medium Enterprises Development Act, 2006. Accordingly, interest provision required under the said Act is not made.

X. The Company has not complied with the Section 292A regarding appointment of audit committee and various compliances of Corporate Governance.

4. Subject to our comments/observation referred in Paragraph above 3(a), 3(b) 3(c) and paragraph from 3(g) (i) to 3(g) (*) and note 28 forming part of the financial statements relating to non-confirmation of bank accounts, in our opinion and according to the best of information and explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India:

(i) In so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012; and

(ii) In so far as it relates to the Profits. Loss account, of the 'Loss” of the Company for the period ended on that date;

(iii) In the cast '.f Cash Flow Statement of the cash flow for the period ended on that date.

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DA TE

1. (a) The Company has generally maintained proper records showing full particulars Including quantitative details and situation of Its fixed assets.

(b) According to the information given to us the Management has not physically verified the Fixed Assets of the Company since 1998-99, We are unable to express any comments for any physical

discrepancies/differences that may arise in respect of the verification of Fixed Assets.

(c) The Company has not disposed off any substantial part of assets.

2. (a) As informed to us, the Inventory has not been physically verified during the year by the management After

closure of operation since August 2008, the Company does not have any Inventory except few stores of Rs. 17.89 lacs.

(b) In our opinion, the Company has not physically verified the stock; hence our opinion on procedures of physical verification of stocks followed by the management does not arise.

(c) The Company was maintaining proper records of inventory, however after closure of manufacturing activity there are no records required to be maintained as there were no activity, accordingly there is no question of any discrepancies to be reported. However, the Company has not considered the Impairment aspect for the carrying value of stock, which are old and obsolete.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other

parties covered In the register maintained under Section 301 of the Companies Act, 1956:

a. The Company has granted loans of Rs.182.21 lacs to companies, firms or other parties covered In the register maintained under Section 301 of the Companies Act, 1956. The Company has granted loans to 3 parties and maximum balance outstanding at any time during the year was Rs. 182.21 lacs.

b. In our opinion and according to the information and explanation given to us, the aforesaid ban is interest free and other terms and conditions, are prima facie prejudicial tooth-e interest of the Company.

c. The said loans are repayable on demand and there is no repayment schedule.

d. As the said loans are repayable on demand, the question of overdue amounts does not arise.

e. As informed to us, the Company has taken unsecured loans from thirteen parties referred as above amounting to Rs. 5909.65 lacs. The maximum balance outstanding at any time during the year was Rs. 5909.65 lacs.

f. In our opinion and according to the information and explanations given to us, the unsecured loans are Interest free and other terms are not prejudicial to the interest of the company.

g. In respect of the interest free unsecured loans, the amounts were repaid as per stipulation and there Is no overdue amount In respect of loans taken by the Company.

4. Since there is closure of operation from August 2008, in our opinion, there is no internal control procedure . commensurate with the size of the company and the nature of business. On account of the closure of operation there Is no sale or purchase of goods and purchase of fixed assets; however there Is no internal control on safeguarding the asset of the Company like scrap materials, stores and other movable assets. In addition, the system of confirmation / reconciliation of balances of parties as well as Inoperative bank accounts for details refer to note 28 forming part of the financial statements need to be strengthened to make them commensurate with the size of the Company and the nature of its business.

5. Based on the audit procedures applied by us and according to the information and explanations provided by the management, the Company has not recorded the transaction that needs to be entered In to the register maintained under section 301 of the Act

6. In our opinion and according to the information and explanation given to us, the Company has contravened-the provisions of repayment of deposits along with interest thereon as contemplated In Section 58A & 58AA of the Companies Act, 1956, and the rules framed there under with regard to deposits accepted from public, which are overdue. However, the Company is declared sick by The Board tor Industrial and Financial Reconstruction (now referred BIFR) under section 3(1)(0) of the Sick Industrial Companies (Special Provisions) Act'1985. By virtue of the rehabilitation scheme of BIFR, all the claims relating^ to future and past interest is waived and the Company has to repay the 100% principal dues as on 31.03.2003 in five equal installments after 5 years from 22.05.2006 viz. date at the scheme. However the Company has not made payment as per the terms desired In the scheme except Rs. 8.06 lacs during the financial year 2011-12. No fresh deposits are accepted from the public during the year.

In contemplation of Section 58AA inserted by the Companies (Amendment) Act, 2000, the company has yet to comply for intimating the Company Law Board (CLB) on a monthly basis.

7. In our opinion, the Company has no internal audit system commensurate with the size and nature of Its business.

8. We are of the opinion that the company has not maintained books of account pursuant to the order made by the Central Government for the maintenance of cost raoonjs under Section 209(1)(d) of tha Companies Act 1950,

9. (a) Tha statutory liabilities sre restructured and deferred as per the comprehensive rehabilitation scheme approved by the BIFR, however various statutory agencies are in process of granting their sanction as per said scheme for determent and settlement of said liabilities. Hence, we are reporting the Undisputed Statutory dues, which Is subject to confirmation from respective departments and shown as per the ledger account including provident fund. Investor Education and Protection fund, Employee's State Insurance,

Income tax, Sales tax, Custom duty, Excise duty, cess and other statutory dues with appropriate authorities for a period more than six months from the date they became payable, which are as under;

SR STATUTORY DUES AMOUNT

NO. (Rs.lN LACS)

a. Safes Tax/VAT & interest thereon 1893.81

b. Custom Duty 680.93

c. Excise Duty (Including penalty of Rs, 5 lacs) 34.00

d. Interest on excise duty 645.75

e. income Tax/TDS/Weaith Tax/FBT 7.15

f. Provident Fund dues & Interest thereon 1135.02

g. Employee's Stats Insurance dues 338.05

h. Water Tax& Interest thereon 1811.45

I. Gujarat Electricity Board & interest thereon 981.94

J. Textile Committee Cess 12.19

k. Water Cess (Gujarat Pollution Control Board) 8.35

I. Electricity Duty (Power plant) 1671.02

m Professional Tax 20.18

Note;

The said statutory dues are given as per the information and records produced before us. The company has received various notices from E.S.I., Provident fund offices, GEB etc claiming penal interest damages and penalty for delay in deposit of th/sir dues, Which is not ascertainable, hence it is not provided in the books.

(b) According to the Information and explanation given to us, the company has disputed dues of Excise duties, which are given below.

Sr. Name of Nature of Amount Period to which the Forum where dispute is No. Statue dues (Rs.in amount relates pending lacs)

1. Central Excise Act, 1944 Excise Duty 8.16 1995-1996 Asst Commissioner Central Excise CEGAT

2. Central Excise Act, 1914 Excise Duty 0.91 1996-1997 Asst Commissioner Central Excise CEGAT.

3. Central Excise Act, 1994 Excise Duty 11.72 1996-1997 Commissioner (Appeal) Central Excise CEGAT

4. Central Excise Act, 1914 Exclse Duty 0.18 1996-1997 The Appellant Tribunal, Central Excise CEGAT

5. Central Excise Act 1944 Exclse Curs 8.93 1996-1997 Asst Commissioner Central Excise CEGAT

6. Central Excise Act 1944 Excise Duty 29.15 1997-1998 Asst Commissioner Central Excise CEGAT

7. Central Excise Act 1944 Excise Duty 2046.54 1998-1999 Asst Commissioner Central Excise CEGAT

8. Income Tax Act 1961 Tax Deducted 224.98 1998-99 Commissioner of Income Tax at Source 254.95 1999-00 (Appeal), TDS (TDS) 277.11 2000-01 299.78 2001-02

10. The company has accumulated losses at the end of the financial year of Rs. 34474.70 lacs; however It has generated cash loss Rs. 1094.21 lacs in the current year against the cash losses of Rs. 627.21 lacs for Immediately preceding year.

11. The Company has paid all the dues to CDR members, however, PNB Asset Management Limited which is not participating member under CDR scheme is as under.

(Rs.In lacs)

Name of Principal Interest Interest overdue & Totpl amount Repaymen lender amount overdue & not provided in outsta nding t provided in books At year end Overdue books from year

Debenture 179.09 196.78 Not Ascertained Not ascerta ined (Up F.Y.1997 - Holders (Up to P. Y. 466.13) to P. Y. 840.04) 98

Note: The above balance is subject to confirmation.

12. According to the information and explanations given to us, the company has not granted any loans on the basis of security by way of pledge of shares, securities, debentures or others.

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

14. In our opinion and according to the information and explanations given to us, the company has no transaction of dealing in buying and selling of shares, securities or such other investments.

15. Except the guarart being given to HDFC Limited of Rs. 60.91 lacs for availing Housing loan to staff, according to the information nrid explanations given to us and the records examined by us, the company had not given the guarantee to banks for loans taken by others. However, said arrangement is not prejudicial to the interest of the company, as any invoked guarantee is recoverable from employee's salary.

16. As informed to us, the company had not availed any fresh loans during the year.

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

18. The Company has not made preferential allotment of shares to parties or companies covered under Section 301 of the Act

19. According to the information and explanations given to us, the company has not issued debentures during the year.

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

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

FOR AMP AC & ASSOCIATES CHARTERED ACCOUNTANTS

FRN112236W

PLACE: MUMBAI

DATE: 9th August, 2012 P.B. SHETH

Partner Membership No. 44062