Gujarat Foils Ltd Directors Report.

TO THE MEMBERS OF GUJARAT FOILS LIMITED

Report on the Financial Statements

We have audited the accompanying financial statements of GUJARAT FOILS LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managements Responsibility for the Financial Statements

The Companys 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 and presentation of the 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 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 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.

Auditors 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 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 disclosures in the financial statements. The procedures selected depend on the auditors 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 control relevant to the Companys preparation of the financial statements that give a true and fair view 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 Companys Directors, 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 in conformity with the accounting principles generally accepted in India:

i. in the case of the balance sheet, of the state of affairs of the Company as at 31st March 2017;

ii. in the case of the statement of profit and loss, of the loss of the Company 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.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2016 ("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 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 & 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 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. in our opinion, the aforesaid financial statements comply with the Accounting Standards specified under section 133 of the Companies Act, 2013, read with rule 7 of the Companies (Accounts) Rules, 2014, as amended;

e. on the basis of written representations received from the directors as on 31st March 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2017, 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 control over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure - B

g. with respect to the other matters to be included in the Auditors 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 statement as stated in Note - 25 to the Financial Statements.

ii. The company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, as required on long term contracts including derivative contracts;

iii. No amount is required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made there under.

h. The company has disclosed in Note - 30 to the accounts of details regarding Specified Banks Notes properly.

For H R Agarwal & Associates
Chartered Accountants
Firms Registration Number: 323029E
Sd/-
(Shyam Sundar Agarwal, FCA)
Place: Mumbai Partner
Date: 29th May, 2017 Membership number: 060033

The Annexure - A referred to in paragraph 1 under the heading "Report on other and regulatory requirements" of our report of even date

i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

(b) Fixed Assets have been physically verified by the management in the phased periodical manner, which in our opinion is reasonable having regard to the size of the company and the nature of its Assets. No material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties are held in the name of the company;

ii) The Inventory has been physically verified during the year by the management. In our opinion the frequency of verification is reasonable and no material discrepancies were noticed on such verification.

iii) The company has not granted any loans secured or unsecured to companies, firms, Limited Liability Partnership or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

iv) In respect of loans, investments, guarantees, and security provisions of section 185 and 186 of the Companies Act, 2013, have been complied with to the extent applicable.

v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public in pursuance to sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under.

vi) Maintenance of Cost Records has been specified by the Central Government under sub section (1) of Section 148 of the Companies Act, 2013. These accounts and records have been so made and maintained. However, we have not made a detailed examination of the Cost Records with a view to determine whether they are accurate or complete.

vii) a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, employees state Insurance, Sales tax, Service Tax, custom duty, excise duty, value added tax, cess and other material statutory dues applicable to it, except income tax during the year.

According to the information and explanations given to us, no undisputed amounts payable in respect of service tax, sales tax, custom duty, excise duty or value added tax and cess were in arrears, as at 31st March, 2017 for a period of more than six months from the date they became payable, except Income tax which are due for more than six months amounting Rs. 2,90,00,000/- for the financial year 2013-14 and Rs. 3,04,80,090/- for the financial year 2014-15.

b) There is a demand of Rs 10, 87, 88,625/- on account of VAT & CST assessment for the financial Years 2007-2008 to 20112012, which are pending with Appellate Authority. However, Rs 83, 75,000/- has already been paid against same.

viii) According to records of the company, the company has defaulted in repayment of loans or borrowings to financial institutions and banks till 31st March, 2017, the details are as follows:

Name of the lenders Amount of default as at 31.03.2017 (Rs in crores) Period of default (no. of days) Nature of Facility
Allahabad Bank 54.64 182 Cash Credit
Bank of India 20.19 274 Cash Credit
Dena Bank 14.00 59 Cash Credit
IDBI Bank 49.81 365 Cash Credit
State Bank of India 24.78 123 Cash Credit
Union Bank of India 9.57 365 Cash Credit
Bank of India 10.06 274 Term Loan
Dena Bank 1.06 59 Term Loan
IDBI Bank 11.28 365 Term Loan
State Bank of India 37.19 123 Term Loan
Dena Bank 4.88 158 Letter of Credit
State Bank of India 13.63 188 Letter of Credit
Union Bank of India 32.24 516 Letter of Credit

Ix) The company has not raised moneys by way of initial public offer or further public offer (including debt instruments) and the money raised by way of term loans were applied for the purposes for which those were raised.

x) No any fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the year.

xi) The Managerial Remuneration has been paid / provided in accordance with the provisions of section 197 read with schedule V to the Companies Act, 2013

xii) The company is not a Nidhi Company. Accordingly, Clause (xii) of paragraph 3 of the Order are not applicable to the Company.

xiii) The Company has entered into transactions with the related parties in compliance with section 177 and 188 of the companies Act, 2013 and the details of such transaction have been disclosed in the Financial statements as required by the applicable accounting standards;

xiv) The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

xv) According to the information and explanations given to us, the Company has not entered into non- cash transactions with directors or persons connected with them;

xvi) The Company is not required to be registered under section 45-IA of the RBI Act, 1934.

For H R Agarwal & Associates
Chartered Accountants
Firms Registration Number: 323029E
Sd/-
(Shyam Sundar Agarwal, FCA)
Place: Mumbai Partner
Date: 29th May, 2017 Membership number: 060033

Annexure to the Independent Auditors Report

Annexure-B referred to in paragraph 2(f) under "Report on other legal and regulatory requirements" of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the Internal Financial Control over financial reporting of Gujarat Foils Limited ("the Company") as of 31st March, 2017 in conjunction with our audit of the financial statements of the Company for the year then ended.

Management Responsibility for the Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and prescribed under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the iCAi. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the ICAI.

For H R Agarwal & Associates
Chartered Accountants
Firms Registration Number: 323029E
Sd/-
(Shyam Sundar Agarwal, FCA)
Place: Mumbai Partner
Date: 29th May, 2017 Membership number: 060033