MANAGEMENT RESPONSIBILTY:

The Company's Board of Directors is responsible for the matters in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities, selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR'S RESPONSIBILITY:

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

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

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(subject to the matters of emphasis mentioned below) in conformity with the accounting principles generally accepted in India;

i) In the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

ii) In the case of the Statement of Profit and Loss for the year ended on that date; and

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

EMPHASIS OF MATTERS

We draw attention to the following observations:

a) Debtors includeRs. 2348.49 lakhs which are due for more than six months out of which Debtors of Rs. 110.13 lacs are under litigations.No provisionfor doubtful debtshas been created by the company.Had the provision been made, the loss for the year would have been higher with that amount and debtors would have been lower with the same amount.

b) No provisions has been made by the Company for outstanding claims receivable from it suppliers for Rs. 1394.88 lacs (previous year 232.08). As per the management, same have not been accepted by the suppliers. In our opinion, the raw material consumption for the year is lowered by Rs. 1195.00 lacs (previous year Nil).Had the provision been made on such outstanding claims receivable, the Loss for the year would have been more by Rs. 1394.88 lacsand the Accumulated Losses would have also been higher by the same amount. (Refer Note No.11 under other notes in Notes to Accounts annexed with the financial statements for the year ended March 31, 2015 )

c) No provisions has been made against zero coupon Debentures issued by the Company to its lender in terms of the CDR package approved by the CDR EG

on 24th December 2014 of Rs. 3412.00 lacs to be redeemed on 31.03.2026. Had a proportionate provision of Rs. 262.46 lacsfor the year been made in the books, the Loss for the year would have been higher by that amount and the Accumulated Losses would have also been higher by the identical amount. (Refer Note No. 16 under other notes in Notes to Accounts annexed with the financial statements for the year ended March 31, 2015)

d) Balances of Debtors & Creditors are subject to confirmation and reconciliation consequential effect (if any) on the account remained unascertained

e) The company has shown Term Loans and Interest accrued on them as per there CDR package. However, CDR package as informed to us is yet to be implemented. In absence of the details of interest accrued etc. the consequential effect of the same remains unascertained

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS:

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") as required by Companies Act,2013 and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we annex hereto a statement on the matters specified in 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 purpose of our audit;

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

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

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

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

f) With respect to the other matters included in the Auditor's Report and to our 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 Part B (1) to the financial statements.

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection FUND by the Company.

ANNEXURE REFERRED TO IN OUR AUDIT REPORT OF EVEN DATE OF M/S MAGNUM VENTURES LIMITED, PURSUANT TO THE COMPANIES (AUDITORS' REPORT) ORDER 2015 ON THE ACCOUNTS FOR THE YEAR ENDED MARCH 31, 2015

i. (a) The Company has updated its records of fixed assets showing full particulars including quantitative details and situation of Fixed Assets.

(b)As explained to us, most of the fixed assets have been physically verified by the management during the year and as per the explanations and information given to us, there is a regular program of verification which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. As explained to us discrepancies noticed on physical verification were not significant and have been properly dealt with in the books of accounts.

(c) During the year, the Company has not disposed off any part of the fixed assets, which will have the effect on the going concern of the company.

ii. (a) As explained to us the inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

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

(c) As explained and based on the information given to us, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

iii. (a) The Company has neither granted nor taken any loan, secured or unsecured, to/from companies, firms or other parties covered in the Register maintained under section 189 of the Companies Act. 2013.

iv. In our opinion and according to the information and explanations given to us, the company does not have an adequate internal control system commensurate with the size of company and the nature of its business with regard to purchase of inventory, fixed assets, and with regard to the sale of goods as they are unable to collect their sale proceeds and also not able to recover their claims against their rejection in purchase of inventory.

v. In our opinion and according to the information and explanation given to us, the company has not accepted any deposits, hence provisions of section 73 to 76 or any other relevant provisions of the Company Act does not applicable.

vi. The Company hasprepared and maintained cost records as prescribed by the Central Government under sub-section (1) of section 148 of the companies Act 2013.

vii (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education protection fund, employee's state insurance, income tax, sales tax, wealth tax, custom duty, excise-duty, cess and other statutory dues applicable to it.

(b) According to the records of the Company, there are following dues of Central Excise Department as on March 31, 2015 which have not been deposited on account of disputes : -

* Rs. 26,135 (Plus Interest and Penalty) for the period September 2010 to April 2011.

* Rs. 1,73,115 (Plus Interest and Penalty) for the period February 2009 to August 2010.

* Rs. 1,58,816 (Plus Interest and Penalty) for the period F/Y2004-05 to F/Y 2007-08.

However, the Company has filed an appeal against the above order before Hon'ble CESTAT which is still pending for adjudication.

(c) According to the information and explanation given to us by the management, no amount is pending to be transferred to Investor Education And Protection Fund in accordance with the relevant provision of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

viii. The Accumulated losses at the end of the financial year March 31, 2015 are more than the Net Worth of the company. The company has incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

ix. As explained and informed to us by the management, An 2nd Rework Package was approved by Corporate Debt Restructuring Executive Group Committee (CDR EG) on 24th December 2013 vide its Letter of Approval No. 863 Dated 30th December 2013. As per CDR Circular, the package should have been implemented within 120 days i.e. by April 23, 2014 by all the banks without waiting for their individual sanctions for the re-structuring package. However banks waited for sanction from the authorities and the MRA & other documents were signed on 31st July 2014 and implementation of package in the system by Banks is still pending.

x. Based on the records and information obtained by us, we report that the Company has not given any guarantee for loans taken by others from banks or financial institutions, the terms and conditions whereof are prejudicial to the interest of the company.

xi. Based on the records, we report that the Company has not availed any term loan during the year.

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

For Aggarwal & Rampal Chartered Accountants F.R.No.003072N

S/d Vinay Aggarwal Partner M.No.082045

Place: New Delhi Date:May 4, 2015