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Auditor Report of Accel Frontline Ltd.

Mar 31, 2015

Report On The Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Accel Frontline Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the returns for the year ended on that date audited by the branch auditors of the Company's branch at Singapore.

Management's Responsibility For The Standalone Financial Statements

2. The Company's Board of Directors is responsible for the maters 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; 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

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

4. We have taken into account the provisions of the Act, the accounting and auditing standards and maters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

5. 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 standalone financial statements are free from material misstatement.

6. 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 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 controls 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 Directors, as well as evaluating the overall presentation of the financial statements.

7. 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

8. As disclosed in note 20 (a) of the financial statements, during the year the Company has recognised revenue from operations amounting to Rs.397 lakhs however, in our opinion, such recognition does not meet the conditions enunciated under AS 9 – 'Revenue Recognition'. Had the Company followed the principles of AS 9, the revenue from operations and the changes in inventories of stores and spares and stock in trade for the year ended 31st March, 2015 would have been lower by Rs.397 lakhs and Rs.368 lakhs respectively. The loss from ordinary activates after tax would have been higher by Rs.29 lakhs and tax expense would be lower by Rs.9 lakhs for the year ended 31st March, 2015. Further, the trade receivables as at 31st March, 2015 would be lower by Rs.397 lakhs and the inventories would be higher by Rs.368 lakhs as at that date.

9. Further, as disclosed in note 16(a) of the financial statements, the Company's inventory comprise of certain items carried at Rs.3,044 lakhs as at 31st March, 2015, wherein due to reasons mentioned in the aforesaid note the management is unable to compute the value of inventory in accordance with the Company's accounting policy and requirements of Accounting standard (AS) 2 – Valuation of Inventories. Owing to the nature of the Company's records and in the absence of sufficient appropriate evidence we are unable to comment on the impact, of the aforesaid mater on the changes in inventories of stock-in-trade and store and spares for the year ended 31st March, 2015 and the carrying value of inventories as at 31st March, 2015 and the consequential impact, if any, on the financial statements.

Qualified Opinion

10. In our opinion and to the best of our information and according to the explanations given to us, except for the effect / possible effects of the maters described in the Basis for Qualified Opinion paragraph, 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.

Report On Other Legal And Regulatory Requirements

11. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure a statement on the maters specified in paragraphs 3 and 4 of the Order.

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

a. we have sought and except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph 9, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. except for the possible effects of the maters described in the Basis for Qualified Opinion paragraph 9 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 and proper returns adequate for the purposes of our audit have been received from the branches not visited by us;

c. the report on the accounts of the branch office of the Company audited under Section 143(8) of the Act by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report;

d. the standalone financial statements dealt with by this report are in agreement with the books of account and with the returns received from the branches not visited by us;

e. except for the effects / possible effects of the maters described in the Basis for Qualified Opinion paragraph 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 (as amended);

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

g. the qualification relating to the maintenance of accounts and other maters connected therewith are as stated in the Basis for Qualified Opinion paragraph;

h. 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.

i. as detailed in note 39 to the standalone financial statements, the company has disclosed the impact of pending litigations on its standalone position of the Company

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

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 auditor's report of even date to the members of accel frontline limited, on the financial statements for the year ended 31st march, 2015

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

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

(b) The Company has a regular program of physical verification of its fixed assets under which fixed assets are verified in a phased manner every year, 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.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management.

(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 except that due to the reasons mentioned the note 16(a) to the financial statements, the new software is not able to generate the details with respect to the issue of inventory in a chronological manner. No material discrepancies between physical inventory and book records were noticed on physical verification

(iii) The Company has granted interest free unsecured loans to companies covered in the register maintained under Section 189 of the Act; and with respect to the same:

(a) as the terms and conditions of the said loan are not stipulated, we are unable to comment as to whether the receipt of the principal amount is regular; and

(b) in the absence of stipulated terms and conditions, we are unable to comment as to whether there is any overdue amount in excess of Rs.. one lakh and whether reasonable steps have been taken by the Company for recovery of the principal amount and interest.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and belief, the Central Government has not specified maintenance of cost records under sub-Section (1) of Section 148 of the Act, in respect of Company's products/ services. Accordingly, the provisions of clause 3(vi) of the Order are not applicable.

(vii) (a) Undisputed statutory dues including provident fund, employees' state insurance, income- tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in many cases. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they became payable.

(b) The dues outstanding in respect of income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax and cess on account of any dispute, are as follows:

Rs. in lakhs

Amount Name of the Amount Nature of Dues paid under Statute protest

Income Tax Act Tax and Interest 570 - 1961

Income Tax Act Tax and Interest 332 - 1961

Finance Act Tax and Penalty 6 - 1994

Customs and Tax and Penalty 411 - Excise Act 1964

Kerala VAT Act Tax and Interest 44 35 2003

Uttar Pradesh Tax and Interest 1 - VAT Act 2008

West Bengal VAT Tax and Interest 3 - Act 2003

West Bengal VAT Tax and Interest 6 - Act 2003

West Bengal VAT Tax and Interest 9 - Act 2003

Jharkhand VAT Tax and Interest 1 - Act 2005

Odisha VAT Act Tax and Interest 0 - 2004

Odisha VAT Act Tax and Interest 10 - 2004

Name of the Statute Period to which Forum where dispute is pending the amount relates

Income Tax Act, 1961 2005-06, 2006-07 Income Tax Appellate Tribunal, and 2007-08 hennai Branch, Chennai

Income Tax Act, 1961 2010-11 and Commissioner of Income Tax (Appeals), Chennai 2011-12

Finance Act, 1994 2007-08 and Customs Excise and Service Tax Appellate 2008-09 Tribunal, Chennai

Customs and Excise Act 1964 Director of Revenue Intelligence 2014-15 (DRI)

Kerala VAT Act 2003 2007-08 Deputy Commissioner (Appeals)

Uttar Pradesh VAT Act 2008 2002-03 Trade Tax Tribunal, Lucknow, UP

West Bengal VAT Act 2003 2001-02, Asst. Commissioner, Park Street 2003-04 and Charge, Kolkata 2004-05

West Bengal VAT Act 2003 Appellate & Revisional Board, 2006-07 Kolkata

West Bengal VAT Act 2003 2007-08 and Joint Commissioner, 2010-11 Park Street Charge, Kolkata

Jharkhand VAT Act 2005 Joint. Commissioner, 2007-08 Jharkand

Odisha VAT Act 2004 2011-12 and Deputy Commercial Tax 2012-13 CST Officer,Odisha

Odisha VAT Act 2004 2011-12 and Deputy Commercial Tax Officer, 2012-13 VAT Odisha

(c) The Company has transferred the amount required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder within the specified time.

(viii) In our opinion, the Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and the immediately preceding financial year.

(ix) The Company has not defaulted in repayment of dues to any bank or financial institution during the year. The Company did not have any outstanding debentures during the year.

(x) In our opinion, the terms and conditions on which the Company has given guarantee for loans taken by others from banks or financial institutions are not, prima facie, prejudicial to the interest of the Company.

(xi) In our opinion, the Company has applied the term loans for the purpose for which these loans were obtained.

(xii) No fraud on or by the Company has been noticed or reported during the period covered by our audit.

For walker Chandiok & Co LLP

Chartered Accountants

Firm's Registration No.: 001076N/N500013

per Sumesh E S

Place: Chennai Partner

Date: 05th May, 2015 Membership No.: 206931


Mar 31, 2014

We have audited the accompanying financial statements of M/s. Accel Frontline Limited, which comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement, summary of significant accounting policies and other notes for the year then ended incorporating the financial transactions of Singapore branch of Accel Frontline Limited which was audited by another auditor.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these 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 Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1956 ("the act") read with general circular of 13th September 2013 of Ministry of Corporate Affairs in respect of Section 133 of the Companies 2013. This responsibility includes the design, implementation and maintenance of internal control 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 financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by 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.

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:

(a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March, 2014;

(b) In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

(c) In the case of the cash flow statement, of the cash outflows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 (CARO) as amended by Companies (Auditor''s Report)(Amendment) order, 2004 issued by the Government of India vide GSR No.766

(E) in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

2. As required by section 227(3) of the Act, we report that:

a. We have 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 appears from our examination of those books

bb. The report on the accounts of the branch office audited under section 228 by a another auditor has been forwarded to us as required by clause (c) of the sub section (3) of section 228 and have been dealt with in preparing our report in the manner considered necessary by us;

c. The balance sheet, statement of profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account and with the audited returns received from branch.

d. In our opinion, the balance sheet, statement of profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with General circular dated 13th September 2013 of Ministry of Corporate Affairs in respect of section 133 of the companies act 2013.

e. On the basis of written representations received from the directors, as on 31st March 2014 and taken on record by the Board of Directors, we report that none of the directors of the Company are disqualified as on 31st March, 2014 from being appointed as a director, in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f. Since the Central government has not issued any notification as to the rate at which the cess is to paid under section 441A of the companies act, 1956 nor has it issued under any rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the company.

Annexure to the Auditors'' Report Of M/s. Accel Frontline Limited, Chennai Referred to in paragraph 2 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.

(i)(b) The company has a phased programme of physical verification of fixed assets which in our opinion is reasonable having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such verification.

(i)(c) The fixed assets disposed off during the year were not substantial, According to the information and explanation given to us; we are of the opinion that the disposal of the fixed assets has not affected the going concern status of the company.

(ii)(a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(ii)(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(ii)(c) In our opinion and according to the explanations given to us, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book stock has been properly dealt with in the books of account.

(iii)(a) The company has not granted any loans secured/unsecured to companies, firms or other parties covered under the register maintained under sec.301 of the Companies Act, 1956. Hence comments on clause (b),(c) & (d) are not applicable.

(e) The company has taken unsecured loan for Rs.13.66/- crores from a company which is covered under section 301 of companies act, 1956.

(f) As per the books of accounts produced to us, the rate of interest and other terms and conditions of unsecured loan taken by the company is prima facie not prejudicial to the interest of the company.

(g) Payment of the interest is regular however principal repayment is not due in the current year.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the

nature of its business with regard to purchases of inventory, fixed assets and sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v)(a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in sec.301 of the Companies Act, 1956 that need to be entered into the register maintained under sec.301 have been so entered.

(v)(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rs.5/- lakhs have been entered into during the financial year at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted any deposits from public and hence the provisions of sec 58A and 58AA or any other relevant provisions of the companies Act 1956 and the Companies (Acceptance of deposits) Rules, 1975 with regard to the deposits accepted from the public is not applicable.

(vii) In our opinion, the company has an internal audit system, which is commensurate with the size and nature of its business.

(viii) The Maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 is applicable to the Company and provisions relating to the said provision has been complied with.

(ix)(a) Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, sales tax, wealth tax, customs duty, excise duty has NOT been regularly deposited with appropriate authorities.

(ix)(b) According to the records of the company, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, wealth- tax, sales-tax, customs duty, excise duty, cess 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 except in the following cases, which was subsequently paid –

Nature of Tax Amount (Rs.) Due Since

Tax Deducted at Source 3,48,940 July 2013

Tax Deducted at Source 26,78,136 August 2013

Tax Deducted at Source 48,09,093 September 2013

(ix)(c) According to the records of the company the dues outstanding of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess on account of any dispute are as follows:

Name of the Nature of Dispute statute

Income tax Assessment year 2007-08, in connection with Capitalization of application software, IPO expenses, depreciation of leasehold improvement, allowance of STPI profits and allowance of goodwill

Income tax Assessment year 2006-07, in connection with depreciation claimed on temporary wooden structures.

Income Tax Assessment Year 2008-09 in connection with depreciation on application software and allocation of corporate expenses for STPI, Depreciation on goodwill, Income Tax temporary structure. Dividend income and IPO expenses

Disallowance of Capitalisation of application software, IPO expenses, depreciation of leasehold improvement, claim of STPI profits and claim of Goodwill

Disallowance of Capitalisation of application software, IPO expenses, depreciation of leasehold improvement, claim of STPI profits and claim of Goodwill Disallowance of Capitalisation of application software,

IPO expenses, depreciation of temporary partition, Exemption u/s 10B, Interest on advance to Subsidiaries, Provision for Gratuity

Levy of Tax for non-production of Form F for Rs.406821/=

and Increase in taxable AMC Turnover from 10% to 20%. Under WBST ACT.

Wrong imposition of Interest on late payment of Turnover Tax Increase in Taxable AMC Turnover etc. under WBST ACT.

The dispute relates to non-submission of Form F for interstate branch movement of stock, which the company has filed at the time of hearing with the appellate authorities. The Tribunal has remanded back the case to the assessing officer for fresh assessment

In the Assessment order 8% CST charged for non- submission of Form C and 4% CST charged on CVT &UPS sales instead of 1%.

Dispute with regard to tax rate on ATVM-KIOSK

Additional VAT liability due to increase in turnover,

purchase tax liability, disallowance of Input Tax Credit, Sales Tax imposition of interest and penalty under VAT Act.

CST liability on account of non-production of Form F and consideration of High SEA Sale under CST Sale &imposition tax on it.

Imposition of penalty for late submission of VAT Audit Report.

Tax Liability increased due to enhancement of Gross Turnover

Assessment order passed by the Sales Tax officer without proper hearing

Assessment order passed by the Sales Tax officer without proper hearing

Tax Liability increased due to Non production of declaration forms, Considering labour portion into taxable CTP, Disallownace of ITC partially, Occurance of clerical mistake at the end of CTO while computing tax liability under CTP

Service Tax Penalty for belated payment of service tax

Name of the Period to which Forum where the dispute is Statute Amount Rs the amount relates Pending

Income Tax 42,418,700 FY 2006-07 Commissioner of Income tax (Appeals), Chennai

Income tax Appellate 7,348,370 FY 2005-06 Tribunal, Chennai Bench, Chennai

Commissioner of Income 3,88,10,980 FY 2007-08 tax (Appeals) Chennai

Commissioner of Income Nil FY 2009-10 tax (Appeals), Chennai

34,19,240 FY 2010-11 Commissioner of Income tax (Appeals), Chennai

1,17,10,110 FY 2011-12 Commissioner of Income tax (Appeals), Chennai

Assistant Commissioner 34,306 2003-04 Park Street Charge,Kolkata

Assistant Commissioner 139,135 2004-05 Park Street Charge,Kolkata

149,787 2002-03 Trade Tax Tribunal, Lucknow Trade Tax, Lucknow, UP

119,115 2001-02 Asst. Commissioner Park Street Charge,Kolkata

Deputy Commissioner 8,68,281 2007-08 (appeals)

Joint Commissioner Sales Tax 268,424 2007-08 Park Street Charge,Kolkata

Joint Commissioner 555,061 2007-08 Park Street Charge,Kolkata

Joint Commissioner 100,123 2007-08 Jamshedpur Urban Circle, Jamshedpur

Joint Commissioner 39,283 FY 2009-10 Park Street, Kolkata

FY 2006-07 Appellate & Revisional 1,97,222 (VAT) Board, Kolkatta

FY 2006-07 Appellate & Revisional 19,574 (CST) Board, Kolkatta

FY 2010-11 Joint Commissioner 62,50,277 (VAT) Park Street, Kolkata

Service Tax 584,433 FY 2007-08 CESTAT, Chennai

(x) The company does not have any accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management the company has not defaulted in repayment of dues to banks. However there has been delay in honoring Letter of credits to the tune of Rs. 28.65 crores which was converted as term loans.

(xii) According to the information and explanations given to us and based on the documents and records produced to us the company has not granted loans and advances on the basis of security by way of pledge of shares and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xv) The company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) According to the records of the company, the company has availed the term loans and used the same for the intended purpose.

(xvii) According to the information and explanations given to us and on an overall examination of the utilization of funds, we report that the no funds raised on short-term basis have been used for long-term investment.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act 1956. However the company has made a preferential allotment of 55 lakhs equity shares on preferential basis to M/s CAC Corporation, Japan and the price at which it is issued is not prejudicial to the interest of the company.

(xix) The company did not have any outstanding debentures during the year.

(xx) During the year the company has not raised any money from public by way of issue of shares.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

K.S.AIYAR & CO. Chartered Accountants (Firm Regn No: 100186W)

(S.Kalyanaraman) Partner (M No: 200565)

Place : Chennai - 16 Date : May 7, 2014


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of M/s. Accel Frontline Limited, which comprise the Balance Sheet as at March 31, 2013, the Statement of Proft and Loss and Cash Flow Statement for the year then ended incorporating the fnancial transactions of Singapore branch of Accel Frontline Limited which were audited by other auditor and a summary of signifcant accounting policies and other notes.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the fnancial 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 fnancial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the fnancial statements 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 management, as well as evaluating the overall presentation of the fnancial statements.

We believe that the audit evidence we have obtained is sufcient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the fnancial 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 the case of the Balance Sheet, of the state of afairs of the company as at 31st March, 2013;

(b) In the case of the Statement of Proft and Loss, of the proft for the year ended on that date; and

(c) In the case of the cash fow statement, of the cash fows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 (CARO) as amended by Companies (Auditor''s Report)(Amendment) order, 2004 issued by the Government of India vide GSR No.766 (E) in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specifed in paragraph 4 and 5 of the said Order.

2. As required by section 227(3) of the Act, we report that:

a. We have 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 appears from our examination of those books

c. The balance sheet, proft and loss account and cash fow statement dealt with by this report are in agreement with the books of account.

d. In our opinion, the balance sheet, proft and loss account and cash fow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the directors, as on 31st March 2013 and taken on record by the Board of Directors, we report that none of the directors of the Company are disqualifed as on 31st March, 2013 from being appointed as a director, in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

Annexure to the Auditors'' Report

Of M/s. Accel Frontline Limited, Chennai

Referred to in paragraph 2 of our report of even date,

(i)(a) The company has maintained proper records showing full particulars including quantitative details and situation of fxed assets.

(i)(b) The company has a phased programme of physical verifcation of fxed assets which in our opinion is reasonable having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such verifcation.

(i)(c) The fxed assets disposed of during the year were not substantial, According to the information and explanation given to us; we are of the opinion that the disposal of the fxed assets has not afected the going concern status of the company.

(ii)(a) The inventory has been physically verifed during the year by the management. In our opinion, the frequency of verifcation is reasonable.

(ii)(b) The procedures of physical verifcation of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(ii)(c) In our opinion and according to the explanations given to us, the company is maintaining proper records of inventory. The discrepancies noticed on verifcation between the physical stocks and the book stock has been properly dealt with in the books of account.

(iii)(a) The company has not granted or taken any loans secured/ unsecured to/from companies, frms or other parties covered under the register maintained under sec.301 of the Companies Act, 1956. Hence, comments on sub-clauses (b), (c), (d), (e), (f) & (g) are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fxed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v)(a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in sec.301 of the Companies Act, 1956 that need to be entered into the register maintained under sec.301 have been so entered.

(v)(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rs.5/- lakhs have been entered into during the fnancial year at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted any deposits from public and hence the provisions of sec 58A and 58AA or any other relevant provisions of the companies Act 1956 and the Companies (Acceptance of deposits) Rules, 1975 with regard to the deposits accepted from the public is not applicable.

(i) In our opinion, the company has an internal audit system, which is commensurate with the size and nature of its business.

(ii) The Maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 is applicable to the Company and provisions relating to the said provision has been complied with.

(ix)(a) Undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, sales tax, wealth tax, customs duty, excise duty has not been regularly deposited with appropriate authorities.

(ix)(b) According to the records of the company, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, wealth- tax, sales- tax, customs duty, excise duty, cess 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 except in the case of the following:

(ix)(c) According to the records of the company the dues outstanding of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess on account of any dispute are as follows:

(x) The company does not have any accumulated losses at the end the fnancial year covered by our audit and in the immediately preceding fnancial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management the company has not defaulted in repayment of dues to banks.

(xii) According to the information and explanations given to us and based on the documents and records produced to us the company has not granted loans and advances on the basis of security by way of pledge of shares and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual beneft fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

(xv) The company has not given any guarantee for loans taken by others from bank or fnancial institutions.

(xvi) According to the records of the company, the company has availed the term loans and used the same for the intended purpose.

(xvii) According to the information and explanations given to us of the fnancial year and has not incurred any cash losses during and on an overall examination of the utilization of funds, we report that the no funds raised on short-term basis have been used for long-term investment.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act 1956.

(xix) The company did not have any outstanding debentures during the year.

(xx) During the year the company has not raised any money from public by way of issue of shares.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

K.S.AIYAR & CO.

Chartered Accountants

(Firm Regn No: 100186W)

(S.Kalyanaraman)

Place : Chennai - 16 Partner

Date : May 29, 2013 (M No: 200565)


Mar 31, 2011

We have audited the attached Balance Sheet of M/s. Accel Frontline Limited, Chennai as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto incorporating the financial operations of Singapore branch which was audited by the other auditor whose report has been considered and our opinion is based on the other auditor. These financial statements are the responsibility of the company's management; our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. These Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 (CARO) as amended by Companies (Auditor's Report) (Amendment) order, 2004 issued by the Government of India vide GSR No.766 (E) in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

3. Further to our comments in the Annexure referred to 2 above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge 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 the company so far as appears from our examination of those books

(iii) The balance sheet, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account.

(iv) In our opinion, the balance sheet, profit and loss account and cash flow statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956.

(v) On the basis of written representations received from the directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors of the Company are disqualified as on 31st March, 2011 from being appointed as a director, in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India:

(a) In the case of the balance sheet, of the state of affairs of the company as at 31st March, 2011;

(b) In the case of the profit and loss account, of the profit for the year ended on that date; and

(c) In the case of the cash flow statement, of the cash flows for the year ended on that date.

Annexure to the auditors' report of M/s. Accel Frontline Limited, Chennai Referred to in paragraph 2 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.

(i)(b) The company has a phased programme of physical verification of fixed assets which in our opinion is reasonable having regard to the size of the company and the nature of its business. No material discrepancies were noticed on such verification.

(i)(c) The fixed assets disposed off during the year were not substantial, According to the information and explanation given to us; we are of the opinion that the disposal of the fixed assets has not affected the going concern status of the company.

(ii)(a) The inventory has been physically verified during the year by the management. In our opinion, the frequency of verification is reasonable.

(ii)(b) The procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business. However the procedures need to be further strengthened.

(ii)(c) In our opinion and according to the explanations given to us, the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book stock has been properly dealt with in the books of account.

(iii)(a)The company has not granted or taken any loans secured/ unsecured to/from companies, firms or other parties covered under the register maintained under sec.301 of the Companies Act, 1956. Hence, comments on sub-clauses (b), (c), (d), (e), (f) & (g) are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal controls.

(v)(a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in sec.301 of the Companies Act, 1956 that need to be entered into the register maintained under sec.301 have been so entered.

(v)(b)In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rs.5 lakhs have been entered into during the financial year at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) The company has not accepted any deposits from public and hence the provisions of sec 58A and 58AA or any other relevant provisions of the companies Act 1956 and the Companies (Acceptance of deposits) Rules, 1975 with regard to the deposits accepted from the public is not applicable.

(vii) In our opinion, the company has an internal audit system, which is commensurate with the size and nature of its business.

(viii) Maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 is not applicable to the company.

(ix)(a) 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, have been regularly deposited with respective authorities.

(ix)(b)According to the records of the company, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth- tax, service tax, sales-tax, customs duty, excise duty, cess 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.

(ix)(c)According to the records of the company the dues outstanding of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess on account of any dispute are as follows:

Name of Nature of Dispute Amount the statute (Rs.)

Income tax Assessment year 2000-01, in connection with 65,82,000 non-compete fee disallowance

Income tax Assessment year 2007-08, in conn 42,418,700 -ection with Capitalization of application software, IPO expenses, depreciation of leasehold improvement, allowance of STPI profits and allowance of goodwill

Income tax Assessment year 2006-07, in conne 7,348,370 -ction with depreciation claimed on tempor -ary wooden structures.

Sales Tax Appeal filed on 14.10.04 for disputed turno 115,842 ver of Rs. 10, 71,720 and interest of Rs. 19,786

In the Assessment Order, 8% CST charged for 119,115 non-submission of Form C and 4% CST charged on CVT and UPS Sales instead of 1%.

Increase in Gross Turnover and taxable AMC 79,424 under WBST ACT. Disallowance of Form D submitted before S.T.O. and non-submission of Form C of other customers under CST ACT.

Levy of Tax for non-production of Form F 34,306 for Rs. 406,821 and Increase in taxable AMC Turnover from 10% to 20%. Under WBST ACT.

(f) Wrong imposition of Interest on late 139,135 payment of Turnover Tax, Increase in Taxa -ble AMC Turnover etc. under WBST ACT.

(g) The dispute relates to non-submission 149,787 of Form F for interstate branch movement of stock, which the company has filed at the time of hearing with the appellate authorities. The Tribunal has remanded back the case to the assessing officer for fresh assessment

The dispute relates to delay in filing 418,413 the tax return and Penalty was levied @50% until March 31, 2005 and @10% w.e.f. 01.04.2006

Assessment order passed without proper 3,293,672 hearing. Appeal filed before Sr. Joint Commissioner for reopening of Sales Tax Assessment

Dispute with regard to tax rate on 607,938 ATVM-KIOSK

Additional VAT liability due to increase 293,929 in turnover, purchase tax liability, disallowance of Input Tax Credit, impos -ition of interest and penalty under VAT Act.

CST liability on account of non-produ 560,072 -ction of Form F and consideration of High SEA Sale under CST Sale and imposition tax on it.

Imposition of penalty for late submi 100,123 -ssion of VAT Audit Report.

Service Tax Penalty for belated payment of service 584,433 tax

Name of Period to Form where the dispute the statute which the pending Amount relates

Income Tax 1999-00 DCIT, Co Cir.I (1) - Appeals

2006-07 Commissioner of Income tax (Appeals), Chennai

2005-06 Income tax Appellate Tribunal, Chennai Bench, Chennai

Sales Tax 2001-02 Asst. Commissioner (Appeals)

2001-02 Sales Tax Officer

2002-03 Assistant Commissioner of CT

2003-04 Assistant Commissioner

2004-05 Assistant Commissioner

2002-03 Trade Tax Tribunal, Lucknow

2005-06 High Court, Bangalore

2006-07 Joint Commissioner

2007-08 Deputy Commissioner (appeals)

2007-08 Joint Commissioner

2007-08 Joint Commissioner

2007-08 Joint Commissioner

Service Tax 2007-08 CESTAT, Chennai

(x) The company does not have any accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management the company has not defaulted in repayment of dues to banks.

(xii) According to the information and explanations given to us and based on the documents and records produced to us the company has not granted loans and advances on the basis of security by way of pledge of shares and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund/society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xiv) In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly the provisions of clause 4 (xiv) Companies (Auditor's Report) Order, 2003 are not applicable to the company.

(xv) The company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) According to the records of the company, the company has not availed any term loans. Therefore, our comment in respect of the clause is not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the utilization of funds, we report that the no funds raised on short-term basis have been used for long-term investment.

(xviii) The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act 1956.

(xix) The company did not have any outstanding debentures during the year.

(xx) During the year the company has not raised any money from pubic by way of issue of shares.

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For K.S.Aiyar & Co. (Firm Regn No: 100186W) Chartered Accountants

(S. Kalyanaraman) Partner (M No.200565) Place: Chennai - 16 Date: 27 July 2011

 
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