Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134 (5) of the Companies Act, 2013 ("the Act") with respect to the preparation 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, includingthe 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 underthe provisions ofthe Act and the Rules made there under. 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 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 ofthe financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal financial control relevant to the Company's preparation ofthe 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 controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors, as well as evaluating the overall presentation ofthe financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our Qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

The company has not made any provision towards losses amounting to Rs. 39205 Lac on derivative contracts (refer to note nos. 36 (A) (c) I, II and III to the notes to account) and towards claim amounting to Rs. 6259 Lac against the corporate guarantee provided by the company on behalf of one of its subsidiary company (Refer to note no. 36 (A) (c) IV to the notes to account), hence to these extent the loss as shown in the statement of profit and Loss, accumulated losses and current liabilities are understated. This matter was also qualified in our report on the financial statements for the year ended on 31st March 2014.

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 above, the aforesaid standalone 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, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

We draw attention to the following matters in the Notes to Financial Statements:

1. To the Note no. 37 relating to non provision of interest amounting to RS. 12291.33 lac for the financial year 201415 on loans taken from banks/Financial Institution/ARC/Subsidiary companies pursuant to consent of the secured lenders, constituting more than 83% of the outstanding secured debt of the company, to the Draft Rehabilitation Scheme (DRS) which is pending consideration before the Hon'ble BIFR, which interalia envisages the complete waiver of all outstanding interest from these lenders.

2. To note no 42 regarding pending confirmation of balances from trade receivable, loans & Advances and trade payables and reconciliation thereof and ascertainment of slow, non moving and damaged inventory and impact thereof, if any.

3. To the Note no. 43 relating to non adjustment of amounts paid to secured lenders in terms of settlement reached with them, under consideration ofthe DRS by the Hon'ble BIFR.

4. To the Note no. 45 which briefs the status ofthe reference ofthe company filed with the Hon'ble Board of Industrial & Financial Reconstruction (BIFR) u/s 15 ofthe Sick Industrial Companies (Special Provisions) Act, 1985. The financial statements have been prepared by the company on going concern basis pending sanction of the rehabilitation scheme by the Hon'ble BIFR.

Our opinion is not modified in respect ofthese matters.

Report on Other Legal and Regulatory Requirements

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

2. As required by Section 143 (3) ofthe 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 and the cash flow statement dealt with by this Report are in agreement with the books of account;

(d) Except for the effects ofthe 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 ofthe Act, read with Rule 7 ofthe Companies (Accounts) Rules, 2014;

(e) The matters described in the Basis for Qualified Opinion paragraph and Emphasis on Matters above, in our opinion, may have an adverse effect on the functioning ofthe Company;

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

(g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above; and

(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 ofthe 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 No. 36 to the financial statements;

ii. Except non provision of losses stated in the Basis for Qualified Opinion paragraph above, the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts;

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

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 1 under the heading of "Report on other Legal and Regulatory Requirement" of our report of even date In terms ofthe information and explanations given to us and the books and records examined by us in the normal course of audit and to the best of our knowledge and belief, we state as under:

I. (a) The Company has maintained records which are yet to be updated showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us, the management has physically verified all the fixed assets during the year except for Jaspur and Kashipur unit due to closure, in a phased periodical manner, which in our opinion is reasonable having regard to the size ofthe Company. We have been informed that no material discrepancies were noticed on such physical verification during the year.

II. (a) The inventory has been physically verified during the year by the management in phased manner.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company has maintained proper records of inventories. As explained to us, the discrepancies noticed on physical verification as compared to book records were not material and have been dealt with in the books of account other than ascertainment of slow moving, non moving and damaged inventories, and impact there of, if any, as referred in note on 42.

III. According to the information and explanation given to us, the company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register required to be maintained under section 189 ofthe Act. Accordingly paragraph 3 (iii) ofthe order is not applicable.

IV. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size ofthe Company and the nature of its business, for purchases of inventory and fixed assets and for the sale of goods and services. In our opinion, there is no continuing failure to correct major weaknesses in internal control systems.

V. In our opinion and according to the information and explanations given to us, the company has not accepted deposits from the public.

VI. We were informed that company has maintained cost records pursuant to Companies (Cost Records and Audit) Rules, 2014 as amended and prescribed by the Central Government under section 148(1) ofthe Companies Act, 2013 and we are ofthe opinion that prima facie, the prescribed cost records have been maintained. We have however not made a detailed examination ofthe records with a view to determine whether they are accurate and complete.

VII. a) The Company is generally regular in depositing undisputed statutory dues including Provident Fund Employees'State Insurance, Income-tax, Sales tax, Wealth Tax, Service Tax, Duty of Custom, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it with the appropriate authorities. According to the information and explanations given to us, no amounts payable in respect of Income-tax, Wealth Tax, Service Tax, Sales-tax, Duty of Custom, Duty of Excise, Cess and other aforesaid statutory dues were outstanding as at 31st March, 2015 for a period of more than six months from the date they became payable.

b) The disputed statutory dues aggregating to Rs. 567.49 Lac as on 31st March, 2015 have not been deposited on account of matters pending before appropriate authorities are as under:

Sr.
No.     Name of the Statute         Nature of Dues            Amount

1    U.P. Tax on entry of Goods       Entry Tax            Rs. 3.56 Lac

2    Nagar Nigam Act, 1959            Sewerage Tax         Rs. 5.13 Lac

3 Uttrakhand Agriculture Produce Mandi Samitee Cess Rs. 558.80 Lac Marketing (Development & Regulation) (Amended) Act 2012

Sr.
No.     Name of the Statute                   From where Dispute
                                                  is pending

1    U.P. Tax on entry of Goods            Hon'ble  Tribunal Ghaziabad

2    Nagar Nigam Act, 1959                 Hon'ble  Commisioner,
                                           Nagar Nigam Gzb

(c) The amount required to be transferred to Investor protection fund in accordance with the relevant provisions of the Companies Act, 1956 and rule made there under has been transferred to such fund within time.

VIII. The accumulated losses of the company as at 31st March, 2015 are more than fifty percent of its net worth. As per the financial statements, the Company has not incurred cash losses during the current financial year ended 31st March, 2015 but incurred cash loss in the immediately preceding financial year.

I . By order dated 02.09.2011 of Board of Industrial and Financial Reconstruction (Board), the amount becoming due after May, 2011 to Banks and Financial institutions are deferred till the date of sanction of the scheme of the Draft Rehabilitation Scheme (DRS) by Board and further 83% of the secured lenders (including One Time Settlement with the company) have consented to DRS which is pending before the Board. Having regard to pending approvals of DRS, we are unable to express any opinion about the default of Principal/interest and period of default, if any.

* According to information and explanations given to us, the company has not given any guarantees for loan taken by others from Banks & Financial Institution during the year.

I. According to information and explanations given to us by the management, no term loans have been obtained during the year.

II. As per information and explanation given to us, no fraud on or by the company noticed or reported during the year.

                                                     For P. Jain & Co.
                                                 Chartered Accountants
                                              (Firm Reg. No. : 000711C)

                                                       Munish Kr. Jain
Place : Ghaziabad                                              Partner
Date : May 30, 2015                            Membership No. : 070335