Fiberweb (India) Ltd

TO THE MEMBERS OF THE COMPANY

The Members of

FIBERWEB (INDIA) LIMITED

1) We have audited the attached Balance Sheet of FIBERWEB (INDIA) LIMITED,(Formerly known as PVD Plast Mould Industries Limited) as at 31st March 2012 the Profitand Loss Account and also the Cash Flow Statement for the year ended on that date annexedthereto. These Financial Statements are the responsibility of the Company's Management.Our responsibility is to express an opinion on these Financial Statements based on ourAudit.

2) We conducted our Audit in accordance with the Auditing Standards generally acceptedin India. These Standards require that we plan and perform the audit to obtain reasonableassurance about whether the Financial Statements are free of material misstatement. Anaudit includes examining, on a test basis, evidence supporting the amounts and disclosuresin the Financial Statements. An audit includes assessing the Accounting Principles usedand significant estimates made by management, as well as evaluating the overall FinancialStatements presentation. We believe that our audit provides a reasonable basis for ouropinion.

3) As required by the companies (Auditors' Report) Order, 2003 issued by the CentralGovernment of India in terms of Section 227 (4A) of the Companies Act, 1956 , we enclosein the Annexure a Statement on the matters specified in Paragraph 4 and 5 of the saidOrder.

4) Further to our comments, in the Annexure referred to above, we report that :

(i) We have obtained all the information and explanations, which to the best of ourknowledge and belief, were necessary for the purposes of our audit;

(ii) In our opinion, proper Books of Account as required by law have been Kept by theCompany, so far as appears from our examination of those books;

(iii) The Balance Sheet and Profit & Loss Account dealt with by this Report are inagreement with the Books of Account;

(iv) In our opinion, the Balance Sheet and Profit & Loss Account dealt with by thisReport comply with the Accounting Standards referred to in Section 211 (3C) of theCompanies Act, 1956.

(v) On the basis of the written representations received from the directors , as on31st March, 2012 and taken on record by the Board of Directors, we report that none of theDirectors is disqualified as on 31st March, 2012 from being appointed as a director interms of Section 274 (1) (g) of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to theexplanations given to us, the said Accounts give the information required by the CompaniesAct, 1956 in the manner so required and subject to notes on accounts in general and inparticular Note B.2, B.3, B.4, B.5, B.6 & B.7 of Notes forming part of the accountsfor the year ended 31.3.2012, give a True and Fair view in conformity with the generallyaccepted Accounting Principles in India;

a) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31stMarch'2012;

b) In the case of the Profit and Loss Account, of the profit/loss for the year ended onthat date; and

ANNEXURE REFERRED TO IN PARAGRAPH 3 OF AUDITORS' REPORT OF EVEN DATE TO THE MEMBERS OF"M/S FIBERWEB (INDIA) LIMITED." ON THE ACCOUNTS FOR THE YEAR ENDED 31STMARCH'2012.

On the basis of the presentations received from the management and according to theexplanation given, information furnished to us and on the basis of scrutiny of books &records, we are of the opinion that: -

i) (a) The Company has maintained proper records showing full particulars, includingquantitative details & situation of fixed assets.

(b) All the Assets have not been physically verified by the Management during the yearbut there is a regular programme of verification which, in our opinion, is reasonablehaving regard to the size of the Company and the nature of its Fixed Assets. No materialdiscrepancies were noticed on such verification.

(c) During the year, the Company has not disposed off a major or substantial part offixed assets so as to affect the going concern status of the Company.

ii) (a) The Inventory has been physically verified during the year by the Management.

The frequency of verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.

(c) The Company has maintained proper records of inventory. The material discrepanciesnoticed on physical verification have been properly dealt with in the books of accounts.

iii) The Company had neither taken nor granted any loans, secured or unsecured from /to Companies, firms or other parties covered in the register maintained under section 301of the Companies Act 1956.Hence, the question of reporting whether the rate of interestand other terms and conditions of such loans are prima facie prejudicial to the interestof the company, whether reasonable step for recovery / payment of the overdues of suchloans are taken does not arise

iv) There is adequate inventory control procedure commensurate with the size of thecompany and nature of its business, for the purchase of inventory and fixed assets and forthe sale of goods and services. There is no continuing failure to correct major weaknessesin internal control.

v) Based on the audit procedures applied by us and the information and explanationsprovided by the management, we are of the opinion that there were no transactions duringthe year that need to be entered in the register maintained under section 301 of theCompanies Act, 1956.

vi) Based on our scrutiny of the company's records and according to the information andexplanations provided by the management, in our opinion, the company has not accepted anypublic deposits so far upto 31st March,2012.

vii) The company has an internal audit system commensurate with the size of the companyand nature of its business.

viii) We are unable to offer any comment on the clause no. (viii) pertaining tomaintenance of cost records as the cost auditor has not completed cost audit till date.

ix) (a) The company is regular in depositing undisputed statutory dues includingProvident Fund, Investor Education and Protection Fund, Employees State Insurance, IncomeTax, Sales Tax Wealth Tax, Custom Duty, Excise Duty, and Cess any other material statutorydues applicable to it.

(b) No Un-disputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax,Service Tax, Custom Duty, Excise Duty and Cess were in arrears, as at 31st March'2012, fora period of more than six months from the date they became payable.

(c) There are no dues of sales tax , income tax, custom tax , wealth tax, service tax,excise duty and Cess which have not been deposited on account of any dispute.

x) The accumulated losses of the company are more than 50% (Fifty Percent) of its NetWorth and hence the company has filed a reference with the BIFR, New Delhi Under the SICA1985 which has been registered by the BIFR.the company registered under the Sick Unit videBIFR's order dated 18.01.2007.The company has earned Cash Profit of Rs.3,06,93,828/- inthe current financial year and of Rs.2,40,25,642/- in the immediate preceding financialyear. In arriving at the accumulated loss and net worth, we have considered thequalifications which are quantifiable in the Audit Report of the year to which theselosses pertain.

xi) The company has defaulted in repayment of dues to the following financialinstitution/s and / or Banks and / or Debenture holders in respect of the following amountand the period mentioned there against: -

Since the company is declared as Sick Company by BIFR and rehabilitation scheme issubmitted, the interest has not been provided since then and the dues stays suspended andtherefore company cannot be considered as defaulter.

xii) The Company has not granted any Loans & Advances on the basis of Security byway Pledge of Shares, Debentures and other securities. Hence, the provisions as to whetherthe adequate documents and records are maintained and to point out the deficiencies, ifany in this regard are not applicable.

xiii) The Company is not a Chit Fund or Nidhi / Mutual Benefit Fund/Society. Hence, theprovisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are notapplicable to the Company.

xiv) The Company is not dealing in or trading in Shares, Securities, Debentures andother investments. Hence, the provisions of Clause 4 (xiv) of the Companies (Auditor'sReport) Order, 2003 are not applicable to the company.

xv) The company has not given any guarantee for loans taken by others from Bank orFinancial Institution. Accordingly, the provisions as to whether the terms &conditions in respect thereof are prejudicial to the interest of the Company are notapplicable to the company.

xvi) The company has no recorded, obtained any terms loans. Hence, comments under theclause are not called for the provisions as to whether the price at which shares have beenissued is prejudicial to the interest of the company are not applicable.

xvii) No funds raised on short term basis have been used for the long term investmentby the company

xviii) The company has not made any preferential allotment of shares to parties andCompanies covered in the Register maintained under section 301 of the Companies Act.1956.Hence the provisions as to whether the price at which shares have been issued isprejudicial to the interest of the company are not applicable.

xix) According to the records of the company, the company has not issued anyDebentures.

xx) The company has not raised any money by public issue. Hence the provisions as towhether the management has disclosed on the end use of money raised by public issue andthe same has been verified are not applicable.

xxi) No fraud on or by the company has been noticed or reported during the course ofour Audit.