Sanathnagar Enterprises Ltd. இன் முடிவுகள்

Mar 31, 2025

Sanathnagar Enterprises Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of Sanathnagar Enterprises Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2025, and 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, and notes to the financial statements, including material accounting policy information and other explanatory information (hereinafter referred to as the “financial statements”).

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 Indian Accounting Standards prescribed under section 133 of the Act read with 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, and loss (including other comprehensive income), changes in equity and its cash flows 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 (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 obtained by us is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

We have determined that there are no key audit matters to communicate in our report.

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

The Company''s Board of Directors is responsible for the other information. The other information comprises the Director''s report & Management Discussion and Analysis but does not include the financial statements and our auditor''s report thereon. The Director''s report & Management Discussion and Analysis is expected to be made available to us after the date of this auditor''s report.

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.

When we read the Director''s report & Management Discussion and Analysis, if we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance under SA 720 ''The Auditor''s responsibilities relating to other information''.

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

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 intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also 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 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 financial statements.

We give in “Annexure A” a detailed description of Auditor''s responsibilities for Audit of the Financial Statements.

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 terms of sub-section (11) of section 143 of the Act, we give in “Annexure B” 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, we report that:

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

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

(c) The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the Statement of Changes in Equity 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.

(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 are disqualified as on March 31, 2025 from being appointed as a director in terms of Section 164 (2) of the Act.

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

(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 20 to the financial statements;

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

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

iv. (1) The Management has represented that, to the best of its knowledge and belief, no funds have been

advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(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.

(2) 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, as on the date of this audit report, that the Company shall, 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.

(3) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, and according to the information and explanations provided to us by the Management in this regard nothing has come to our notice that has caused us to believe that the representations under subclause (i) and (ii) of Rule 11(e) as provided under (1) and (2) above, contain any material mis-statement.

v. The Company has neither declared nor paid any dividend during the year.

vi. Based on our examination, which includes test checks, the Company 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 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 the audit trail feature being tampered with. Additionally, the audit trail of prior year has been preserved by the Company as per the statutory requirements for record retention.

3. In our opinion, according to information, explanations given to us, there is no remuneration paid by the Company to its directors and hence the provisions of Section 197 is not applicable to the Company.

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Mar 31, 2024

We have audited the accompanying financial statements of Sanathnagar Enterprises Limited (“the Company”),which
comprise the Balance Sheet as at March 31, 2024, and the Statement of Profit and Loss,including Other Comprehensive
Income,Statement of Changes in Equityand Statement of Cash Flows for the year then ended, and notes to the financial
statements, including material accounting policyinformation and other explanatoryinformation(hereinafter referred to as the
“financial statements”).

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 sorequired and give a true and fair view
in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian
Accounting Standards) Rules, 2015,as amended(“Ind AS”) and other accounting principles generally acceptedin India, of the
state of affairs of the Company as at March 31, 2024, and profit, other comprehensive income,changes in equityand its cash
flows 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 (SAs) specified under
section143(10) of the Act.Our responsibilities under those Standards are further describedin 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 Ethicsissued by the Institute of Chartered Accountants of India (“ICAI”) together with the ethical requirements that are
relevant to our audit ofthe 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 obtained by us is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

We have determined that there are no key audit matters to communicate in our report.

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

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

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 identified above
when it becomes available and, in doing so, consider whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.

When we read the Director''s report,if we conclude that there is a material misstatement therein, we are required to communicate
the matter to those charged with governanceunder SA 720 ''The Auditor''s responsibilities Relating to Other Information''.

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

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of theAct with respect to the preparation
of these financial statements that give a true and fair view of the financial position, financial performance, changes in equityand
cash flows of the Company in accordance with the accounting principles generallyaccepted in India, including the Accounting
Standards specified under section 133 of the Act. This responsibility also includes maintenance of adequate accounting
records in accordance with theprovisions of the Act for safeguarding of the assets of the Company and for preventing and
detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial
controls, thatwere operating effectively for ensuring the accuracy and completeness of the accounting records,relevant to the
preparation and presentation of the financial statement that give a true and fair viewand are free from material misstatement,
whether due to fraud or error.

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 usingthe going concern basis of accounting
unless the Board of Directors either intends to liquidate the Company orto cease operations, or has no realistic alternative but
to do so.

The Board of Directors are also responsible for overseeing the Company''s financial reportingprocess.

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

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a wholeare free from material
misstatement, whether due to fraud or error, and to issue an auditor''s reportthat includes our opinion. Reasonable assurance
is a high level of assurance,but is not a guaranteethat an audit conducted in accordance with SAs will always detect a
material misstatement when itexists. Misstatements can arise from fraud or error and are considered material if, individually
or in theaggregate, they could reasonably be expected to influence the economic decisions of users taken onthe basis of
thesefinancial statements.

We give in “Annexure A” a detailed description of Auditor''s responsibilities for Audit of the Financial Statements.

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 terms of sub-section (11) of section 143 of the Act, we givein“Annexure B” 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, we report that:

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

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

(c) The Balance Sheet, the Statement of Profit and Loss including other comprehensive income, the Statement of
Changes in Equityand 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 AccountingStandards specified under
Section 133 of the Act.

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

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

(g) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule''ll of the Companies

(Audit and Auditors) Rules, 2014, in our opinion and to the best of ourinformation and according to the explanations

given to us:

i. The Company has disclosed the impact of pending litigations on its financial position initsfinancial statements
- Refer Note 21A to thefinancial statements;

ii. The Company did nothave any long-term contracts including derivative contracts for which there were
anymaterial foreseeable losses.

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

iv. (1) The Management has represented that, to the best of its knowledge and belief, no funds have been

advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(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.

(2) 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, as on the date of this audit report, that
the Company shall, 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.

(3) Based on the audit procedures performed that have been considered reasonable and appropriate in the
circumstances, and according to the information and explanations provided to us by the Management
in this regard 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 (1) and (2) above, contain any material mis¬
statement.

v. The Company has neither declared nor paid any dividend during the year.

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

3. In our opinion, according to information, explanations given to us, the remuneration paid by the Company to its

directors is within the limits prescribed under Section 197 read with Schedule V of the Act and the rules thereunder.

For MSKA & Associates

Chartered Accountants

ICAI Firm Registration No. 105047W

Mayank Vijay Jain
Partner

Membership No. 512495
UDIN: 24512495BKFPTY6082

Place: Mumbai
Date: April 18, 2024

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Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 5/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

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

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

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

(b) 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 the Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) in our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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

ANNEXURE REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF SANATHNAGAR ENTERPRISES LIMITED

On the basis of our examination of the books and records of the Company carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we state that:

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

b) The fixed assets have been physically verified by the management at the year-end which is considered reasonable and no material discrepancies were noticed on such verification.

c) No substantial part of the fixed assets has been disposed off by the Company during the year.

2. a) As per the information furnished, the inventory has been physically verified by the management at reasonable intervals during the year.

b) In our opinion, the procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification of inventory as compared to book records.

3. The Company has not granted / taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Consequently, clause (iii) of the said Order is not applicable to the Company during the year covered by the report.

4. In our opinion and according to the information and explanations given to us, and having regard to the explanation that certain items are of specialized nature and suitable alternative quotations are not available there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control system.

5. According to the information and explanations given to us, there are no contracts or arrangements entered into during the year that need to be entered into the register maintained under Section 301 of the Act.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975 during the year. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

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

8. According to the information and explanation given to us, the Companies (Cost Accounting Records) Rules, 2011 have become applicable to the Company for its real estate operations; however, no specific format for the maintenance of the cost records in respect of the real estate projects have been prescribed under the said rules. In terms of the clarification issued by the Ministry of Corporate Affairs vide notification No. F. No. 52/1/CAB/-2012, dated May 25, 2012, the management believes that the cost records currently maintained by the Company provide the information required under the said rules. We have broadly reviewed the books of account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Act in respect of real estate operations, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records with a view to determine whether these are accurate or complete.

9. a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing with the appropriate authorities the undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it. No undisputed amounts payable in respect of aforesaid statutory dues were outstanding as at 31st March, 2014 for a period of more than six months from the date they became payable.

b) According to the records of the Company, there are no dues of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom Duty / Excise Duty / Cess which have not been deposited on account of any dispute. Attention is also invited to Note No. 21(1)(a).

10. The Company''s accumulated losses as at 31st March, 2014 is more than its net worth. The Company has incurred cash losses during the financial year covered by our audit, however there were no cash losses in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayments of dues to its bank.

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

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

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. Accordingly to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the Company has not availed any term loan during the year.

17. According to the information and explanations given to us and on an overall examination of the cash flow statement and balance sheet of the Company, in our opinion, the funds raised on short-term basis have, prima facie, not been used for long term investment.

18. In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act during the year.

19. Accordingly to the information and explanations given to us, the Company did not have any outstanding debentures during the year covered by this report or in the recent past.

20. The Company has not raised any money by way of public issues during the year or in the recent past.

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

For LODHA & COMPANY ICAI FRN: 301051E Chartered Accountants

A.M. Hariharan

Mumbai Partner

April 28, 2014 Membership No. : 38323

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Mar 31, 2012

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

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test 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.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, (hereinafter referred to as the ‘Act'), we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) Without qualifying our opinion, we draw your attention to Note no. 17D, regarding the appropriateness or otherwise of the preparation of these financial statements on a going concern basis as the net-worth of the Company has been completely eroded as at March 31,2012, In our opinion, the validity of the going concern basis would depend upon the continuance of the existing funding, technical and administrative support by the present promoters of the Company.

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

c) 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;

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

e) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Act, to the extent applicable;

f) On the basis of written representations received from the Directors as on 31st March, 2012, and taken on record by the Board of Directors, 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 Act;

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies and accompanying notes give the information required by the Act and in the manner so required, give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Annexure referred to in Paragraph 3 of the Auditors' Report of even date on the financial statements for the year ended 31st March, 2012 of SANATHNAGAR ENTERPRISES LIMITED.

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, we state that

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

fixed assets,

b) As informed to us, the fixed assets have been physically verified by the management at the reasonable intervals during the year and no discrepancies were noticed on such verification.

c) No substantial part of the fixed assets has been disposed off by the Company during the year.

2. a) As per the information furnished, the inventory has been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of verification is reasonable.

b) In our opinion, the procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no materia! discrepancies were noticed on physical verification of inventory as compare to book records.

3. The Company has not granted / taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Ad. Consequently, clause (iii) of the said Order is not applicable to the Company during the year covered by the report

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

5. According to the information and explanations given to us, there are no contracts or arrangements that need to be entered into the register maintained under Section 301 of the Act

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975 during the year. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

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

8. On the basis of records produced, we are of the opinion that prima fade, the cost records and accounts prescribed by the Central Government under Section 209 (1) (d) of the Act have been maintained. However, we are not required to and thus have not carried out any detailed examination of such accounts and records, with a view to ascertain whether these are accurate and complete.

9. a) According to the information and explanations given to us and the records of the Company examined by us, in our

opinion, the Company is generaly regular in depositing with the appropriate authorities the undisputed statutory dues induding Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it and during the year except that there have been delays in the payment of Service Tax and Tax Deducted at Source. No undisputed amounts payable in respect of aforesaid statutory dues were outstanding as at 31 st March, 2012 for a period of more than six months from the date they became payable.

b) According to the records of the Company, there are no dues of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom Duty / Excise Duty / Cess which have not been deposited on account of any dispute. Attention is also invited to Note No.17A. '

10. The Company's accumulated losses as at 31st March, 2012 is more than its net worth. The Company has not incurred cash losses during the year but had incurred losses in the immediately preceding financial year.

11. In our opinion and according to the information aid explanations given to us, the company has not defaulted in repayments of dues to its bank.

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

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

14. In our opinion, the Company is not dealing in ortrading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. Accordingly to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information aid explanations given to us, the Company has not availed any term loan during the year.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, no funds raised on short term basis have been used long term investment during the year.

18. In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties aid companies covered in the Register maintained under Section 301 of the Act during the year.

19. Accordingly to the information and explanations given to us, the Company did not have any outstanding debentures during the year covered by this report or in the recent past.

20. The Company has not raised any money by way of public issues during the year or in the recent past. .

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

For LODHA & COMPANY Chartered Accountants

R.P. BARADIYA Partner

Place : Mumbai Membership No.: 44101

Date : 28th May, 2012 Firm Registration No.: 301051E

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Mar 31, 2011

1. We have audited the attached Balance Sheet of SANATHNAGAR ENTERPRISES LIMITED (formerly BAKELITE HYLAM LIMITED) as at 31th March, 2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements-are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test 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.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, (hereinafter referred to as the Act'), we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) Without qualifying our opinion, we draw your attention to Note no. B(7) in Schedule XIII, regarding the appropriate- ness or otherwise of the preparation of these accounts on going concern basis as the net-worth of the Company has been completely eroded as at March 31,2011 and it has become substantially negative. In our opinion, the validity of the going concern basis would depend upon the continuance of the existing funding by the present promoters of the Company. The Accounts do not include adjustments, if any, that would result from discontinuance of the funding;

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

c) 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;

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

e) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Act, to the extent applicable;

f) On the basis of written representations received from the Directors as on 31st March, 2011, and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

g) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies, Contingent Liabilities arid notes appearing in the Schedule XIII and those appearing elsewhere in the said accounts, give the information required by the Act and in the manner so required, give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of Balance Sheet, of the state of affairs of the Company as at 31st March, 2011 ;

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

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

Annexure referred to in our Report of even date on the Financial Statements as on and for the year ended 31st March, 2011 of SANATHNAGAR ENTERPRISES LIMITED {formerly BAKELITE HYLAM LIMITED).

On the basis of our examination of the books and records of the Company carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us during the course of audit, we state that:

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

b) As informed to us, the fixed assets have been physically verified by the management at the reasonable intervals dur- ing the year and no discrepancies were noticed on such verification.

c) No substantial part of the fixed assets has been disposed off by the Company during the year.

2. a) As per the information furnished, the inventory has been physically verified by the management at reasonable inter- vals during the year. In our opinion, the frequency of verification is reasonable.

b) In our opinion, the procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification of inventory as compare to book records.

3. The Company has not granted / taken any loans, secured or unsecured, to / from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Consequently, clause (iii) of the said Order is not applicable to the Company during the year covered by the report.

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

5. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975 during the year. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

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

8. As informed to us, maintenance of cost records has not been prescribed by the Central Government under section 209(1) (d) of the Companies Act, 1956 in respect of activities carried on by the Company.

9. a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing with the appropriate authorities the undisputed statutory dues including Provident Fund, Employees' State Insurance, Income1 Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it and during the year except that there have been delays in the payment of Service Tax, Tax Deducted at Source and Work Contractors; Tax. No undisputed amounts payable in respect of aforesaid statutory dues were outstanding as at 31st March, 2011 for a period of more than six months from the date they became payable.

b) According to the records of the Company, there are no dues of Income Tax / Sales Tax / Wealth Tax / Service Tax / Custom Duty / Excise Duty / Cess which have not been deposited on account of any dispute. Attention is also invited to note no. B(3) to B(4) in Schedule XIII.

10. The Company's accumulated losses as at 31st March, 2011 is more than fifty percent of its net worth. The Company has incurred cash losses during the year and also in the immediately preceding financial period.

11. In our opinion and according to the information and explanations given to us, there exist no dues to any bank or financial institution or debenture holders. Hence, the question of default does not arise.

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

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

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. Accordingly to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the Company has not obtained any term loan during the year.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, no funds raised on short term basis have been used long term investment during the year.

18. In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act during the year.

19. Accordingly to the information and explanations given to us, the Company did not have any outstanding debentures during the year covered by this report or in the recent past.

20. The Company has not raised any money by way of public issues during the year or in the recent past.

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

For LODHA & COMPANY Chartered Accountants

R.P.BARADIYA Partner Place : Mumbai Membership No.: 44101 Date :5th September, 2011 Firm Registration No.: 301051E

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of SANATHNAGAR ENERPRISES LIMITED (formerly BAKELITE HYLAM LIMITED) as at 31st March, 2010, the Profit and Loss Account and also the Cash Flow Statement for the period ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidencesupporting 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.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, (hereinafter referred to as the Act), we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) Without qualifying our opinion, we draw your attention to Note no. 5 in Schedule 15, regarding the appropriateness or otherwise of the preparation of these accounts on going concern basis as the net- worth of the Company has been completely eroded as at March 31, 2010. In our opinion, the validity of the going concern basis would depend upon the continuance of the existing funding by the new promoters of the Company. The Accounts do not include adjustments, if any, that would result from discontinuance of the funding;

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

c) 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;

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

e) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Act, to the extent applicable;

f) On the basis of written representations received from the Directors as on 31st March, 2010, and taken on record by the Board of Directors, 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 Act;

g) In, our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with Significant Accounting Policies, Contingent Liabilities and notes appearing in the Schedule 15 and those appearing elsewhere in the said accounts, give the information required by the Act and in the manner so required, give a true and fair view in conformity with the accounting principles generally accepted in India:

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

b) in the case of Profit and Loss Account, of the profit of the Company for the period ended on that date; and

c) in the case of Cash Flow Statement, of the Cash Flows for the period ended on that date.

Annexure referred to in our Report of even date on the Financial Statements as on and for the period ended 31st March, 2010 of SANATHNAGAR ENERPRISES LIMITED (formerly BAKELITE HYLAM LIMITED).

On the basis of our examinatior. of the books and records of the Company carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us during the course of audit, we state that:

1. a) The Company is in the process of updating its fixed assets records to show full particulars including quantitative details and situation of fixed assets.

b) As informed to us, physical verification of assets has been carried out by the management during the period in accordance with the phased programme of verification adopted by the Company. Also, in view of demerger / divestment of various businesses, assignment / sale of assets, differences / discrepancies noticed on physical verification carried out in earlier years stand adjusted between the book records and assets physically verified.

c) The Company presently holds only building and as more fully explained in note no, 4 and 7 of Schedule 15 to the financial statements about the Scheme of Arrangement de-merging Foam and Resins as well as Particle Board Business which had been given effect to in the financiaJs of an earlier year and also divestment of Surface Texture Business of the Company in an earlier year resulting in transfer / sale of fixed assets pertaining to these businesses. In our opinion and according to the information and explanations given by the management (also refer para 4(a) of our main audit report), the aforesaid transfer / sale may not affect the going concern assumption in view of what is stated in note no. 15(a) in Schedule 15 though substantial part of the fixed assets had been transferred / sold.

2. a) As per the information furnished, the inventory has been physically verified by the management at reasonable intervals during the period. In our opinion, the frequency of verification is reasonable.

b) In our opinion, the procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification of inventory as compare to book records.

3. a) The Company has granted interest free unsecured loans to two companies covered in the register maintained under Section 301 of the Act. The maximum amount involved during the period and the closing balances of such loans were Rs. 4,19,98,874 and Rs. 30,38,770, respectively (also refer note no. 16 in Schedule 15);

b) In our opinion and according to the information and explanations given to us, the interest free nature and other terms and conditions of such loans prima facie are not prejudicial to the interest of the company.

c) According to the information and explanations given to us, the above loans are repayable on demand, the question of their receipt being regular does not arise.

d) As the above loans are repayable on demand, the question of overdue amount does not arise.

e) The Company has taken interest free secured from a Company and unsecured loans from two companies covered in the register maintained under Section 301 of the Act. The maximum amount involved during the period and the balances at the end of the period of such loans were Rs. 106,08,77,300.

f) In our opinion and according to the information and explanations given to us, the interest free nature and other terms and conditions on which such loan has been taken by the Company are prima-facie, not prejudicial to the interest of the Company.

g) According to the information and explanations given to us, the above loans are repayable on demand and consequently, the question of its regular payment does not arise.

4. In our opinion and according to the information and explanations given to us and subject to what is stated in para 7 below regarding the Company not having an internal audit system, internal control system needs to be strengthened to make it commensurate with the size of the Company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

5. According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

6. The Company has not accepted any deposits from the public within the meaning of Section 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975 during the period. Accordingly, the provisions of clause 4(vi) of the Order are not applicable.

7. The Company does not have an internal audit system.

8. As informed to us, maintenance of cost records has not been prescribed by the Central Government under section 209(1 )(d) of the Companies Act, 1956 in respect of activities carried on by the Company.

9. a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally not regular in depositing with the appropriate authorities the undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it and there have been delays in all the cases. No undisputed amounts payable in respect of aforesaid statutory dues were outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable.

b) According to the records of the Company, there are no dues of Income Tax / Sales Tax / Wealth Tax / Sen/ice Tax / Custom Duty / Excise Duty / Cess which have not been.deposited on account of any dispute. Attention is also invited to note no. 3 in Schedule 15.

10. The Companys accumulated losses as at 31st March, 2010 are more than fifty percent of its net worth. The Company has incurred cash losses during the period and also in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, there exist no dues to any bank or financial institution or debenture holders. Hence, the question of default does not arise.

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

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

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. Accordingly to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. According to the information and explanations given to us, the Company has not obtained any term loan during the period.

17. On the basis of an overall examination of the Balance Sheet of the Company, in our opinion and according to the information and explanations given to us, no funds raised on short-term basis have been used for long term investment during the period.

18. In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act during the period.

19. Accordingly to the information and explanations given to us, the Company did not have any outstanding debentures during the period covered by this report or in the recent past.

20. The Company has not raised any money by way of public issues during the period or in the recent past.

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

For LODHA & COMPANY

Chartered Accountants

Place : Mumbai R.P. BARADIYA

Date : 12th October, 2010 Partner Membership No.: 44101

Firm Registration No.: 301051E

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Jun 30, 2009

1. We have audited the attached Balance Sheet of SANATHNAGAR ENERPRISES LIMITED (formerly BAKELITE HYLAM LIMITED) as at 30th June, 2009, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test 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.

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government in terms of Section 227 (4A) of the Companies Act, 1956, (hereinafter referred to as the Act), we annex hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) the accumulated losses of the Company have far exceeded its entire net worth. The accounts have, however, been prepared by the management on a going concern basis as explained in note no. 6 of Schedule 18 of Significant Accounting Policies and Notes to Accounts. Should, however, the Company be unable to continue as a going concern, the extent of the effect of the resultant adjustments on the net worth of the Company as at the year end and loss for the year, as explained by the management, is presently not ascertainable;

b) we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit except information mentioned in para (f) below;

c) 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 except what is stated in para (f) below;

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

e) in our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Section 211 (3C) of the Act, to the extent applicable;

f) attention is invited to note no. 15 in Schedule 18 regarding pending reconciliations and / or confirmations of accounts of secured loans and unsecured loans and consequential revenue and other adjustments as may be required to be carried out, amount of adjustment, if any, have not been ascertained;

g) On the basis of written representations received from the Directors as on 30" June, 2009, and taken on record by the Board of Directors, none of the Directors is disqualified as on 30th June, 2009 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

h) In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to what is stated in paragraphs 4 (a) and (f) above, the effect whereof is presently not determinable and read together with Significant Accounting Policies, Contingent Liabilities and notes appearing in the Schedule 18 and those appearing elsewhere in the said accounts, give the information required by the Act and in the manner so required, give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of Balance Sheet, of the state of affairs of the Company as at 30th June, 2009;

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

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

Annexure referred to in our Report of even date on the Financial Statements as on and for the year ended 30th June, 2009 of SANATHNAGAR ENERPRISE5 LIMITED (formerly BAKELITE HYLAWI LIMITED).

On the basis of our examination of the books and records of the Company carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us during the course of audit, we state that:

1. a) The Company is in the process of updating its fixed assets records to show full particulars including quantitative details and situation of fixed assets.

b) As informed to us, no physical verification of assets has been carried out by the management during the year in accordance with the phased programme of verification adopted by the Company. Also, in view of demerger / divestment of various businesses, assignment / sale of assets, differences / discrepancies noticed on physical verification carried out in earlier years stand adjusted between the book records and assets physically verified.

c) The Company presently holds only land and building at Sanathnagar and as more fully explained in note no, 4 and 7 of Schedule 18 to the financial statements about the Scheme of Arrangement de-merging Foam and Resins as well as Particle Board Business which has been given effect to in the financials and also divestment of Surface Texture Business of the Company during the year resulting in transfer / sale of fixed assets pertaining to these businesses. In our opinion and according to the information and explanations given by the management (also refer para 4(a) of our main audit report), the aforesaid transfer / sale may not affect the going concern assumption in view of what is stated in note no. 6 in Schedule 18 though substantial part of the fixed assets have been transferred / sold.

2. a) The inventory has not been physically verified by the management at reasonable intervals during the year. In view of demerger / divestment of various businesses, assignment / sale of assets, differences / discrepancies between the book records and physical inventory stand adjusted. The Company is maintaining proper records of inventory.

3. a) The Company has granted interest free unsecured loans to a resulting

company as stated in note no. 4 of Schedule 18 covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year and the closing balance of such loans was Rs. 341.10 lacs and Rs 341.10 lacs, respectively.

b) In our opinion and according to the information and explanations given to us, the other terms and conditions of such loans prima facie are not prejudicial to the interest of the company.

c) In respect of the aforesaid unsecured loans, the said companies are regular in repayment of principal amount as stipulated.

d) There is no overdue amount in respect of the aforesaid unsecured loans granted by the Company.

e) The Company has taken interest free unsecured loans from companies and other parties covered in the register maintained under Section 301 of the Act. There are 7 such parties and the maximum amount involved during the year and the closing balances of such loans were Rs. 12,015 lacs and Rs 10,766 lacs, respectively.

f) In our opinion and according to the information and explanations given to us, other terms and conditions on which such loans have been taken by the Company are prima-facie, not prejudicial to the interest of the Company.

g) The Company is regular in repayment of principal amounts as stipulated.

4. In our opinion and according to the information and explanations given to us subject to what is stated in para 7 below regarding the Companys internal audit system requiring strengthening to be commensurate with its size and nature of its business, internal control system needs to be strengthened to make it commensurate with the size of the Company and nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services.

5. (a) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangement referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding Rs. 5,00,000 in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. In our opinion and according to the information and explanations given to us and also in view of the Rehabilitation Scheme sanctioned by the BIFR in an earlier year, the Company has complied with the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provision of the Act and Rules framed there under. Attention is, however, drawn to note no. 4 in Schedule 18 forming part of the financial statements.

7. The Company has an internal audit system which, in our opinion, needs to be strengthened to make it commensurate with the size and nature of its business, particularly in respect of areas of coverage, extent of checking, responses to and implementation of various suggestions / remarks made by the internal auditors.

8. As informed to us, maintenance of cost records has not been prescribed by the Central Government under section 209(1 )(d) of the Companies Act, 1956 in respect of activities carried on by the Company.

9. a) According to the information and explanations given to us and the records

of the Company examined by us, in our opinion, the Company is generally regular in depositing with the appropriate authorities the undisputed statutory dues including Provident Fund, Employees State Insurafice, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and any other material statutory dues applicable to it. No undisputed amounts payable in respect of aforesaid statutory dues were outstanding as at 30th June, 2009 for a period of more than six months from the date they became payable.

)rding to the records of the Company, there are no dues of Income Tax les Tax / Wealth Tax / Service Tax / Custom Duty / Excise Duty / Cess h have not been deposited on account of any dispute. Attention is also 3d to note no. 3 and 7 (b) in Schedule 18.

10. The Companys accumulated losses as at 30th June, 2009 are more than fifty percent of its net worth. The Company has not incurred cash losses during the year but it had cash losses in the immediately preceding period.

11. In our opinion and according to the information and explanations given to us, there exist no dues to any bank or financial institution or debenture holders. Hence, the question of default does not arise.

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

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

14. In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

15. Accordingly to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

16. In our opinion and according to the information and explanations given to us, the term loans were applied for the purpose for which they were obtained.

17. According to the information and explanations given to us, the Company has not raised any funds on short term basis during the year.

18. In our opinion and according to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Act.

19. Accordingly to the information and explanations given to us, the Company did not have any outstanding debentures during the year covered by this report or in the recent past.

20. The Company has not raised any money by way of public issues during the year or in the recent past.

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

For LODHA & COMPANY

CHARTERED ACCOUNTANTS

R.P. BARADIYA

Place : Mumbai Partner

Date : 05-12-2009 Membership No.: 44101