Sharp & Tannan

Chartered Accountants
Ravindra Annexe
194 Churchgate Reclamation
Dinshaw Vaccha Road
Mumbai 400 020

Dear Sirs,

Guarniflon India Private Limited – representation letter for the year ended 31 st
March, 2016

This representation letter is provided in connection with your audit of the financial
statements of Guarniflon India Private Limited (the Company) for the year ended 31 st
March, 2016 (the balance sheet date) for the purpose of expressing an opinion as to
whether the financial statements give a true and fair view of the financial position of
the Company as of 31 st March, 2016 and of the results of operations for the year then
ended.

We acknowledge our responsibility for preparation of financial statements in

accordance with the requirements of the Companies Act, 2013 and recognised
accounting policies and practices, including the Accounting Standards as specified in
the Companies (Accounting Standards) Rules, 2006 read with rule 7(1) of the
Companies (Accounts) Rules, 2014 issued by the Ministry of Corporate Affairs in
respect of section 133 of the Companies Act, 2013.

We understand that your examination included such tests and procedures, as you
considered necessary for the purpose of expressing an opinion on the financial
statements. We also understand that such tests and procedures would not necessarily
detect fraud, irregularities or error, should any exist. We acknowledge that control
over and responsibility for the prevention and detection of fraud, irregularities and
errors remains with us.

We confirm, to the best of our knowledge and belief, the following representations:

Accounting policies

1. The accounting policies which are material or critical in determining the results
of operations for the year or financial position are set out in the financial
statements and there have been no changes during the period in the Company’s
accounting principles and practices that have not been disclosed to you. The
financial statements are prepared on accrual basis following the historical cost
convention in accordance with the provisions of the Companies Act, 2013.
Assets

2. The Company has a satisfactory title to all assets.

3. There are no liens or encumbrance on the Company’s assets nor have any of
these assets been pledged, mortgaged or assigned as security for liabilities,
performance of contract, etc. other than those disclosed in the financial
statement.

4. Assets other than Fixed Assets have been physically verified during the year and
there were no material discrepancies noticed on such verification.

Fixed assets

5. The net book values at which fixed assets are stated in the balance sheet are
arrived at:

a) after taking into account all capital expenditure on additions thereto

(excluding cenvat, where applicable), but no expenditure properly
chargeable to revenue;
b) after adjustment for foreign exchange differences
c) After providing adequate depreciation on fixed assets during the period.

6. Fixed assets were physically verified during the year and no material
discrepancies were noted on such verification compared to book records.

Capital Commitments

7. At the balance sheet date, there were outstanding commitments for capital
expenditure of Rs.516,037

Inventories

8. Inventories at the year-end consisted of the following:

Sl. no. Particulars Amount in Rs.

1 Raw materials 56,159,710
2 Stock in process 84,531,168
3 Finished goods 152,095,020
4 Packing Material 2,438,600
Total 295,224,498

9. All quantities were determined by actual physical count or weight or

measurement that was taken under our supervision and in accordance with
written instructions, on 31 st March, 2016. There were no material discrepancies
on physical verification of the above inventories, remaining unaccounted.
10. There exists a perpetual inventory system at the Unit so that all A class items
are verified once a year.

11. All goods included in the inventory are the property of the entity, none of the
goods are held as consignee for others or as Bailee, and none of the goods are
subject to any charge.

12. All inventories owned by the Company, wherever located, have been recorded,
including in transit.

13. Stocks do not include:

a) goods purchased for which liabilities have not been provided;

b) goods returned by customers without credit to their accounts; or
c) goods billed to customers in advance of delivery.

14. Inventories have been valued, at lower of cost or estimated net realisable value
on the following basis:

Particulars Basis of valuation

Raw materials First in first out
Work-in-progress Cost plus related production
overheads
Finished goods Cost plus related production
overheads
Loose tools First in first out

The basis of valuation adopted is the same as was used in the previous year.

15. The provisions have been made in respect of excess, slow-moving, damaged,
or obsolete inventories and these, in our view, are adequate and necessary.

16. No item of inventories has a net realisable value in the ordinary course of
business which is less than the amount at which it is included in inventories.

Revenue from operations

17. Revenues are recognised in accordance with the provisions of AS 9 Revenue

Recognition specified in the Companies (Accounting Standards) Rules, 2006.
Revenue includes Rs.308,857,694 from Export Sales and Rs.88,305,101 from
Domestic Sales.
Trade receivables, Long term/Short term loans and advances

18. The following items appearing in the books as at the balance sheet date are
considered good and fully recoverable.
Rs.
Trade Receivables 102,627,365
Long term loans and advances 6,86,332
Short term loans and advances 32,938,600

19. Adequate provision has been made for sales returns, trade and quantity
discounts, warranty and liquidated damages claims, allowances and losses on
collection of debts are accounted for appropriately.

Other current assets

20. In the opinion, current assets have a value on realisation in the ordinary course
of the Company’s business which is at least equal to the amount at which they
are stated in the balance sheet.

Bank balances

21. The balances of cash at bank in current and deposit accounts have been fairly
stated. There are no balances that have not been disclosed to you.

Liabilities

22. We have recorded all known liabilities in the financial statements. We have
disclosed and brought to your notice all commitments made by the Company
in whatsoever form/manner by the management and its employees to third
parties binding the Company as required by AS 29.

Provisions for claims and losses

23. Provision has been made in the accounts for all known losses and claims of
material amounts.

24. There are no claims against the Company or legal disputes initiated against/by
the Company that are outstanding, or possible claims, which have not been
disclosed to you, whether or not discussed with legal counsel, other than those
disclosed in the Accounts.

Post balance sheet events

25. There are no events that have occurred, or matters that have been discovered,
subsequent to the balance sheet date that would require adjustment to or
disclosure in the financial statements.
Statement of profit and loss

26. Except as disclosed in the financial statements, the results for the year were
not materially affected by:

(a) Transactions of a nature not usually undertaken by the Company;

(b) Circumstances of an exceptional or non-recurring nature;
(c) Charges or credits relating to prior years; and
(d) Changes in accounting policies.

27. We confirm that there were no donations made to political parties during the
year.

Contingent liabilities

28. There have been no violations or possible violations of laws or regulations, the
effect of which should be considered for disclosure in the financial statements
as the basis for recording a contingent loss.

Derivative Contracts

29. The Company has not entered into any derivative contracts contemplated in
AS-30- “Financial Instruments: Recognition and Measurement” and no
disclosure has been made.

The Company has unhedged foreign currency exposures as under :

Payables - Rs. 444,225,349

Receivables - Rs. 89,667,125
Borrowings - Rs. 32,317,599

Micro and Small Enterprises

30. There are no amounts due to Micro and Small enterprises as defined in the
Micro, Small and Medium Enterprises Development Act, 2006.

Related parties

31. We have identified all the related parties, related party transactions and related
amounts receivable or payable, including sales, purchases, salaries, rent and
interest on term loan. The information provided to you is complete in all
respects.

32. The disclosures made in the financial statements are adequate having regard to
the framework under which the financial statements have been prepared.
33. The financial statements are free from material misstatements, including
omissions with regard to related parties.

Segmental reporting

34. The Company has one segment –finished & semi-finished products of Poly
Tetra Fluoro Ethylene Geographical Segments consists of: Exports Rs.
308,857,694 and Local Sales Rs. 88,305,101.

Going concern

35. The financial statements disclose all of the matters of which we are aware that
are relevant to the entity’s ability to continue as a going concern, including
significant conditions and events, and our plans.

Minutes

36. The following board and shareholders’ meetings have been held during the
period and the minutes as recorded and produced to you are complete and
authentic:

(1) Board of Directors Meetings held on:

May 20, 2015
July 27, 2015
July 31, 2015
September 09, 2015
October 01, 2015
November 23, 2015
February 09, 2016

(2) Annual General Meeting held on : September 29, 2015

(3) Extra Ordinary General Meeting held on February 12, 2016

CARO

37. There are no companies, firms or other parties that are required to be listed in
the register maintained under section 189 of the Companies Act, 2013.

38. The Company has not accepted any deposits from the public in accordance
with the provisions of Section 73 to 76 of the Companies Act, 2013 and the
rules framed there under.
 39. The Company is generally regular in depositing undisputed statutory dues
including Provident Fund, Income-Tax, Sales-Tax, Customs Duty and Excise
Duty, with the appropriate authorities.

40. The Company has no undisputed amounts payable in respect of Provident

Fund, Income-tax, Sales tax, Custom Duty and Excise duty outstanding at 31 st
March, 2016 for a period of more than six months from the date they became
payable.

41. There were no dues of Income Tax, Sales Tax, Customs Duty and Excise Duty
that has not been deposited with the appropriate authorities on account of any
dispute.

42. The Company is regular in repayment of loan to bank. The Company has not
raised any loans from financial institutions or debenture holder.

43. The Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.

44. The Company is not dealing in shares, securities and debentures and other
investments.

45. The Company has not given any guarantee for loans taken by others from bank
or financial institutions.

46. The term loans taken by the Company were applied for the purpose for which
the loans were obtained.

47. The funds raised on short term basis have not been used for long – term
investments.

48. The Company has not made any preferential allotment of shares during the
year.

49. The Company has not raised any money by public issue during the year.

50. As informed to you, no significant fraud on or by the Company has been

noticed or reported during the year.

General

51. There have been no irregularities involving management or employees who

have a significant role in the system of internal control that could have a
material effect on the financial statements.
 52. We believe that the effects of the uncorrected financial statement aggregated
by our auditors during the current engagement and pertaining to the latest
period presented are immaterial, both individually and in the aggregate, to the
financial statements taken as a whole. The financial statements are free of
material misstatements, including omissions.

53. The Management is of the opinion that its international transactions are at
arm’s length and the transfer pricing regulations will not have any impact on
the financial statements particularly on the amount of tax expense and that of
the provision for taxation.

54. The Company has deducted tax at source on payments made to residents and
non-residents, wherever applicable.

55. Any sums payable by the Company, which are covered by section 43B , section
40(a)(1a) and section 115WA of the Income Tax Act have been paid or will be
paid on or before the applicable due dates.

56. The consideration in respect of export outside India has been received /
brought in or will be received / brought into India, by the Company, in
convertible foreign exchange, on or before 30 th September, 2016.

57. The company has complied with all aspects of contractual agreements that
could have a material effect on the financial statements in the event of non-
compliance. There has been no non-compliance with requirements of
regulatory authorities that could have a material effect on the financial
statements in the event of non-compliance.

58. We have no plans or intentions that may materially affect the carrying value or
classification of assets and liabilities reflected in the financial statements.

Thanking You,

Yours sincerely,

A.N. Mani
Whole Time Director

Date: