Management's Responsibility for the Standalone Financial Statements

The Company's Management is responsible for the matters stated in Section 134(5} of the Companies Act, 2013 ("the Act"} with respect to the preparation of these standalone 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 maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone 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. These 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 audit evidence about the amounts and the disclosures in the financial statements. The selection of the procedures depends on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's 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 standalone financial statements.

Basis for Qualified Opinion

1. The Company has not made following provisions

i. Stock of slow and/non -moving of stores, raw materials, semi-finished and finished goods valued at Rs. 1,000 lacs approximately;

ii. Debts due from subsidiary amounting to Rs, 2,988.08 lacs and Loans and advances amountinq to Rs 6,198.29 lacs (including loans from subsidiaries amounting to Rs. 1,420.59 Lacs.)

2. The company has investments in subsidiaries whose net worth has been substantially eroded or is negative which has casted material uncertainty in the continuance of the business of these subsidiaries. However, the dimunition in the value of investment in these subsidiaries aggregating to Rs 2,009 lacs is not provided for.

We are unable to comment on ultimate loss which may aiise on realization of these balances. Had the above amounts been fully provided for in the year ended March 31, 2015, the loss would have been higher by Rs 12,195.36 lacs with consequent impact on net worth as on that date.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India: .

a. In case of Balance Sheet, of the state of affairs of the Company as on 31st March, 2015;

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

c. In 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 matters in the Notes to the financial statements:

a. Note 2.1 in the financial statements which indicates that the Company has accumulated losses and its net worth has been fully eroded, the Company has incurred a net loss during the current and previous year(s) aggregating to Rs. 21,348.26 lacs and Rs. 43,465.56 lacs respectively, the Company's current liabilities exceeded its current assets as at the balance sheet date and the company has a net worth of (Rs.16,559.19 Lacs). These conditions indicate existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. However, the financial statements of the Company have been prepared on a going concern basis for the reasons stated in the said Note.

Our opinion is not modified in respect of these matters.

Other Matters

a. Note 38 to the Financial statements, during the year ended March 31, 2015, pending reconciliations with few banks, the interest and other charges on the working capital loans, term loans and the ECB loans taken from the said banks has been provided by the management as per the Master Restructuring Agreement dated September 28, 2014 entered Into with the banks under the Corporate Debt Restructuring Scheme ("CDR").

We are unable to quantify the impact between the interest and other charges debited by the management and amount charged by the bank, if any, arising out of reconciliations with the banks. Further, there are certain unreconciled balances pertaining to fund, non fund based limits & term loans.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order'1} issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in Paragraphs 3 and 4 of the order.

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

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

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

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

d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone 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) The going concern matter described in the Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

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:

a. The legal cases pending against the company are disclosed in Note 27 as on March 31, 2015. However, it may not materially impact its financial position;

b. The company doesn't have any long term contracts. Accordingly, provisions for any material foreseeable loses is not required; and

c. There are no amounts which are required to be transferred to the Investor Education and Protection Fund.

Annexure referred to in paragraph 1 under the heading "Report on Other Legal and Regulatory Requirements" of our report of event date.

i. (a) The Company is in the process of updating the fixed asset register to show full particulars, including quantitative details and situation of fixed assets.

(b) Fixed assets have been physically verified by the management in the previous year in accordance with a planned programme of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets.

ii. (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

(b) The procedures of 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) The Company is maintaining proper records of inventory and appropriate adjustments have been made in the books for discrepancies noticed during physical verification.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clause 3 [iii)[a) and (b) of the Order are not applicable to the Company and hence not commented upon.

iv. In our opinion and according to the information and explanation given to us, the internal control system needs to he strengthened to make it commensurate with the size of the Company and the nature of its business with regard to purchases of inventory and fixed assets and with regard to the sale of goods and services. During the course of our audit, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the internal control procedures.

v. The Company has not accepted any deposits from the public within the meaning of sections 73 and 74 of the Act and the rules framed thereunder to the extent notified.

vi. We have broadly reviewed the books of accounts maintained by the Company in respect of products where pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under specified under section 148[1) of the Act and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We, however, have not made a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. [a) The company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess, and other material statutory dues with appropriate authorities except for delays in some cases.

(b) According to the information and explanations given to us, except for dues under income tax aggregating to Rs 37.44 lacs, no undisputed amounts payable to provident fund, investor education and protection fund, employees' state insurance, Central Excise, Maharashtra Value Added Tax, Central Sales tax and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) The company has not delayed in transferring any amount to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there under.

viii. The Company has an accumulated loss of Rs. 49,122.04 lacs at the end of the financial year and it has incurred cash losses of Rs 14,500.83 lacs in the current year and Rs 27207.571acs in the immediately preceding financial year.

ix. As per information and explanation given by the management, we are of the opinion that the Company has not defaulted on repayment of dues to the financial institution and bank as on the Balance Sheet date. The default pertaining to FY 2014 has been converted to Funded Interest Term Loan by the lenders in compliance with the CDR Scheme.

x. According to the information and explanations given to us, the Company has not given guarantee for loans taken by others from bank or financial institutions.

xi. Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

xii. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For Bharat Rughani & Co Chartered Accountants FRN 101220W

CA Akash Rughani Partner Membership No. 139664

Place: Pune Date: October 09,2015