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Auditor Report of Accel Transmatic Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Accel Transmatic Limited ('the Company'), which comprise the Balance Sheet as at 31st March, 2015, 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.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013("the Act") with respect to the preparation and presentation 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 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 for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which arc 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 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 control 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.

We believe that the audit: evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015 and its Loss and its cash flows for the year ended on that date.

Emphasis of Matter

i) We draw attention to Note No.9.7 As stated therein, the management expects the value in use, based on estimated future cash flows, for the Intellectual Property rights amounting to Rs. 5,43,76,881/- carried in the books as Intangible Asset to be not: less than its carrying amount . Hence, no adjustment for impairment is made in the books of account. The pattern/quantum of the cash flows would, however, depend upon crystallization of enquiries received by the company.

ii) Also, as stated in Note No.4.1, the Company has suffered cash loss from its operations during the year. The Net Worth of the Company has been fully eroded as at: the Balance Sheet date. The Current Liabilities as at the year end exceeds the Current Assets by Rs.1,46,71,393/- . This, read with the matters stated in para (i) above, raises serious doubt about the ability of the Company to continue as a going concern.

iii) Attention is Invited to Note No.21.9. As stated therein, the proposal of merger of the holding Company with the Company w.e.f. 1st April, 2014(Appolnted Date) is pending before the Stock Exchange, and hence no adjustments have been made in the Accounts towards the same.

Our opinion is not qualified in respect of the above matters.

Report on Other Legal and Regulatory Requirements

1, As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub-section(ll) of section 143 of the Act, we give in the Annexure a statement on the matters specified in the paragraph 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 and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;

(c) the Balance Sheet, the Statement of Profit and Loss and the Cash flow Statement dealt with by this Report are in agreement with the books of account;

(d) 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;

(e) on the basis of the written representations received from the directors as on 31st March, 2015 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;

(f) The matters discussed in sub- para (i) and (ii) under "Emphasis of Matter" paragraph above, in our opinion, may have an adverse impact on the functioning of the Company

(g) 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:

(h) the Company has disclosed the impact of pending litigations on its financial position in its financial statements- Refer Note-21,6 to the financial statements;

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 a delay of 7 months and 26 days for transfer of an amount of Rs.1,01,817, to the Investor Education and Protection and Protection Fund, The amount was due to be transferred on 23rd September 2014, The transfer, however is seen made only on 19th May 2015,

Annexure Referred to In Paragraph 1 of the Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the standalone financial statements for the year ended 31st March, 2015, we report that:

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

b. The fixed assets of the company have been physically verified by the management during the year, which, In our opinion is reasonable having regard to the size of the company and the nature of assets and as per the information and explanation furnished to us, no material discrepancies have been noticed on such verification,

(ii) The Company does not carry any Inventory as at the year end and hence, the question of physical verification of inventory docs not arise. Hence the Paragraph (ii)(a), 4(ii)(b) & 4(ii)(c) of Companies (Auditor's Report) Order, 2015 are not commented upon by us,

(iii) The Company has not granted any loans, secured or unsecured, to companies/firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Hence, relative reporting requirement of the Order is not applicable and not commented upon.

(iv) In our opinion and according to the information and explanations given to us, the internal control systems for the purchase of fixed assets and for the sale of goods and services are generally commensurate with the size of the company and nature of its business. There are no major weaknesses in internal control of a continuing nature.

(v) The Company has not accepted any deposits from the public.

(vi) To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act for the company at this stage.

(vii) a. According to the information and explanations given to us, and on the basis of our examination of the records of the Company, there are certain delay In depositing Income Tax, Service Tax, Sales Tax, Employees State Insurance and Employees Provident with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable except Income Tax (Tax deducted at source) Rs. 14,12,206/-

b. According to the information and explanations given to us and the records of the Company examined by us, the following disputed amounts have not been deposited with the authorities as at 31st March, 2015 as per details given below:

Nature of dues Period to Amount Forum where the which dispute is pending relates

Income Tax AY 2008-09 TO 1,38,11,559 Income Tax Appellate AY 2010-11 Tribunal Kochi

Customs Duty 2010 - 11 33,88,000 Honorable High Court Of Kerala

c. According to the information and explanations given to us the amounts which were 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 there under has been transferred to such fund within time, except to the extent mentioned in para 2(g)(iii) of the report.

(viii) The accumulated loss at the end of the financial year is more than 50% of its net worth. The company has incurred cash loss In the financial year and in the immediately preceeding financial year.

(ix) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any banks or financial institution

(x) In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) According to the information and explanations given to us and the records of the company examined by us, the Company has not availed any term loans during the year and hence relative clause is not commented upon.

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

For Varma & Varma Chartered Accountants Firms' Registration No. 04532S

Chennai P.R.Prasanna Varma 26th May, 201.5 Partner Membership No.025854


Mar 31, 2014

We have audited the accompanying financial statements of Accel Transamatic Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, 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.

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 the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 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 the 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 March 31, 2014;

(b) in the case of the Statement of Profit and Loss, of the Loss 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.

Emphasis of Matter

i. We draw attention to Note No. 10.7. As stated therein, the management expects the value in use, based on estimated future cash flows, for the Intellectual Property rights amounting to Rs. 7,33,26,687/- carried in the books as Intangible asset to be not less than its carrying amount. The pattern/quantum of the cash flows would essentialy depend upon crystallisation of enquiries received by the company. Hence, no adjustment for impairment is made in the books of account.

ii. Also as stated in Note no. 4.1, the Company has suffered cash loss from its operations during the year. The Net worth of the company has been fully eroded as at the Balance Sheet date. The Current Liabilities as at the year end exceeds the Current Assets by Rs. 3,44,38,630/-. This, read with the matters stated in para (i) above, raises concerns about the ability of the Company to continue as a going concern. However, in view of the facts stated in the said notes, the Accounts have been drawn up on a going concern basis.

Our opinion is not qualified in respect of the above.

Report on Other Legal & Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (" the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

a. we have obtained all the information and explanation, except to the extend stated in Note No. 13, 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 appears from our examination of those books;

c. the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Act read with the General Circular 15/2013 dated 13th September 2013 of the 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 March 31, 2014, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE REFERRED TO IN OUR AUDIT

REPORT OF EVEN DATE

1. a. The company is maintaining records showing full particulars, including quantitative details of fixed assets.

b. The fixed assets of the company have been physically verified by the management during the year, which, in our opinion is reasonable having regard to the size of the company and the nature of assets and as per the information and explanation furnished to us, no material discrepancies have been noticed on such verification.

c. There has not been disposal of any substantial portion of fixed assets of the company during the year, which would affect the status of the company as a going concern.

2. The Company does not carry any Inventory as at the year end and hence, the question of physical verification of inventory does not arise. Hence the Paragraph 4(ii)(a), 4(ii)(b) & 4(ii)(c) of Companies (Auditor''s Report) (Amendment) Order are not commented upon by us.

3. a. As explained to us, the Company has not advanced any amounts to Companies, Firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956 and hence, relative reporting requirement of Para 4 (iii (a) to (d)) of the Order is not applicable and not commented upon.

b. The Company has taken unsecured loans from companies in which Directors are interested covered in the register maintained under Section 301 of the Companies Act, 1956. The number of parties and the amount involved are given below:

Number of Parties Maximum Amount Balance as on Outstanding 31.03.2014

3 19,64,58,210/- 11,61,21,127/-

c. In respect of unsecured loans taken as above, in our opinion and according to the information and explanation furnished to us, the rate of interest, where applicable, and other terms and conditions of loans are not prima facie prejudicial to the interest of the company.

d. As per the information and explanations given to us, the company is not regular in payment of principal amount and interest thereon as stipulated.

4. In our opinion and according to the information and explanations given to us, the internal control systems for the purchase of fixed assets and for the sale of goods and services are generally commensurate with the size of the company and nature of its business. There are no major weaknesses in internal control of a continuing nature.

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

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance to contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 with the aforesaid parties exceeding value of Rupees Five Lakhs in respect of each such party which have been entered into during the financial year are at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public during the period and hence the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the rules framed there under are not applicable.

7. The company has an adequate internal audit system which is commensurate with the size of the Company and nature of its business.

8. As per the information and explanation furnished to us, Cost records u/s 209(1)(d) of the Companies Act, 1956 have not been prescribed in respect of the Services of the Company.

9. a. There were delays in depositing undisputed statutory dues including Provident fund, Employee''s State Insurance, Income Tax, Service Tax & Sales Tax with the appropriate authorities during the year. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Wealth tax, Service tax, Sales tax, Excise duty, Customs Duty, Cess and other statutory dues which were outstanding at the year end for a period of more than six months from the date they became payable, other than as stated below:-

(Amount in Rupees)

Particulars Outstanding at Payable for the end of the more than 6 year months

Provident fund 21,532 -

Employees State Insurance 1,27,159 1,08,063

Professional Tax 57,538 57,538

Tax Deducted at Source 49,79,856 48,36,269

b. As per the information and explanation furnished to us, there were no dues of sales-tax, income-tax, wealth-tax, service tax, excise duty, customs duty and cess which have not been deposited on account of any dispute, as at the year end, except the following

Sl Particulars Amount involved Forum where No (Rs in lacs) Dispute is pending

1 Income tax Demands 1,36,11,559 CIT Appeals

2 Customs Duty 33,88,000 Honorable High Court Of Kerala

3 PF & Others 15,03,837 Honorable High Court Of Kerala - Rs. 6.90,689- EPF.

EPF Appellate Tribunal, Delhi - Rs. 3,04,000.

EPF Appellate Tribunal, Delhi - Rs. 2,38,200/-.

Suit in Civil Court

Chennai - Rs. 0.64 lacs,

Suit in civil court Kerala - Rs. 2,70,948.

10. The company''s accumulated loss at the end of the financial year is more than fifty per cent of net worth of the company. The company has incurred cash loss during the year and during the immediately preceding financial year.

11. According to the information and explanations given to us, the Company has not defaulted in repayment of dues to any banks or financial institutions.

12. In our opinion and according to the information and explanations given to us, and based on the documents and records produced to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities

13. In our opinion and according to the information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi/mutual benefit fund/societies.

14. In our opinion, the company is not dealing or trading in shares, securities, debentures or other investments, and accordingly, the relative reporting requirements of the order are not applicable to the company.

15. According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions

16. According to the information and explanations given to us, the term loans have been applied, for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall verification of the attached balance sheet of the company, we report that the funds raised by the company on short-term basis have not been used to finance long-term assets except to the extent of Rs. 52,82,502.

18. During the year, the company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19. The company does not have any outstanding debentures as at the year-end.

20. The company has not raised any money by way of public issues during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the Generally Accepted Auditing Practice in India, and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by the management.

For and behalf of Varma & Varma Chartered Accountants

Place: Chennai P.R. PRASANNA VARMA F.C.A Date: 23.05.2014 Partner (M. No. 25854)


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fnancial statements of Accel Transamatics Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Proft and Loss and the Cash Flow Statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

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 (" the Act").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 March 31, 2013;

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

(c) in the case of the Cash Flow Statement, of the cash fows for the year ended on that date.

Emphasis of Matter

i. We draw attention to Note No.10.7. As stated therein, the management expects estimated future cash fows out of the Intellectual Property rights amounting to Rs.9,87,92,490, carried in the books as Intangible asset to be not less than carrying amount of its Assets. The pattern/quantum of the future cash fows would, however, essentially depend upon crystallisation of enquiries received by the company.

ii. Also as stated in Note no. 4.1, the Company has sufered cash loss from its operations during the year. The Net worth of the company has been fully eroded as at the Balance Sheet date. The Current Liabilities as at the year end exceeds the Current Assets by Rs. 11,32,18,197/-. This, read with the matters stated in para (i) above, raises concerns about the ability of the Company to continue as a going concern. However, in view of the facts stated in the said notes, the Accounts have been drawn up on a going concern basis.

Our opinion is not qualifed in respect of the above matters.

Report on Other Legal & Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 (" the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure, a statement on the matters specifed in paragraphs 4 and 5 of the Order.

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

a. we have obtained all the information and explanation, 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 appears from our examination of those books;

c. the Balance Sheet, Statement of Proft and Loss , and Cash Flow Statement dealt with by this report are in agreement with the books of account;

d. in our opinion, the Balance Sheet, Statement of Proft and Loss , and Cash Flow Statement 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 March 31, 2013, and taken on record by the Board of Directors, none of the directors are disqualifed as on March 31, 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 REFERRED TO IN OUR AUDIT REPORT OF EVEN DATE

a. The company is maintaining records showing full particulars, including quantitative details of fxed assets.

b. The fxed assets of the company have been physically verifed by the management during the year, which, in our opinion is reasonable having regard to the size of the company and the nature of assets and as per the information and explanation furnished to us, no material discrepancies have been noticed on such verifcation.

c. There has not been disposal of any substantial portion of fxed assets of the company during the year, which would afect the status of the company as a going concern.

2. The Company does not carry any Inventory as at the year end and hence, the question of physical verifcation of inventory does not arise. Hence the Paragraph 4(ii)(a), 4(ii)(b) & 4(ii)(c) of Companies (Auditor‘s Report) (Amendment) Order are not commented upon by us.

a. As explained to us, the Company has not advanced any amounts to Companies, Firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956 and hence, relative reporting requirement of Para 4 (iii (a) to (d)) of the Order is not applicable and not commented upon.

b. The Company has taken unsecured loans from parties / companies in which Directors are interested covered in the register maintained under Section 301 of the Companies Act, 1956. The number of parties and the amount involved are given below:

Maximum Amount Balance as on

Number of Parties

Outstanding 31.03.2012

3 11,10,22,753/- 11,10,22,753/-

c. In respect of unsecured loans taken as above, in our opinion and according to the information and explanation furnished to us, the rate of interest, where applicable, and other terms and conditions of loans are not prima facie prejudicial to the interest of the company.

d. As per the information and explanations given to us, the company is not regular in payment of principal amount and interest thereon as stipulated.

4. In our opinion and according to the information and explanations given to us, the internal control systems for the purchase of fxed assets and for the sale of goods and services are generally commensurate with the size of the company and nature of its business. There are no major weaknesses in internal control of a continuing nature.

5.

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

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance to contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 with the aforesaid parties exceeding value of Rupees Five Lakhs in respect of each such party which have been entered into during the fnancial year are at prices which are reasonable having regard to the prevailing market prices at the relevant time

6. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules 1975 with regard to deposits accepted from public. According to the information and explanation given to us, no order has been passed by the Company Law Board, or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal in this regard.

7. The company has an adequate internal audit system which is commensurate with the size of the Company and nature of its business.

8. As per the information and explanation furnished to us, Cost records u/s 209(1)(d) of the Companies Act, 1956 have not been prescribed in respect of the Services of the Company

9.

a. There were delays in depositing undisputed statutory dues including Provident fund, Employee''s State Insurance, Income Tax, Service Tax & Sales Tax with the appropriate authorities during the year. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Wealth tax, Service tax, Sales tax, Excise duty, Customs Duty, Cess and other statutory dues which were outstanding at the year end for a period of more than six months from the date they became payable, other than as stated below :- (Amount in Rupees)

10. The company''s accumulated loss at the end of the fnancial year is more than ffty per cent of net worth of the company. The company has incurred cash loss during the year but has not incurred cash loss during the immediately preceding fnancial year.

11. According to the information and explanations given to us, the Company has defaulted in repayment of dues to any banks or fnancial institution to the extent of Rs.2,90,70,516/-.

12. In our opinion and according to the information and explanations given to us, and based on the documents and records produced to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. In our opinion and according to the information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi/ mutual beneft fund/ societies.

14. In our opinion, the company is not dealing or trading in shares, securities, debentures or other investments, and accordingly, the relative reporting requirements of the order are not applicable to the company.

15. According to the information and explanations given to us, the company has given a corporate guarantee to a bank on behalf of a company in which the Directors are interested for Rs.3,50,00,000/- for availing loan from the banks by the said company, the terms of conditions of which are not prima facie prejudicial to the interest of the company.

16. According to the information and explanations given to us, the term loans have been applied, for the purpose for which they were obtained.

17. According to the information and explanations given to us and on an overall verifcation of the attached balance sheet of the company, we report that the funds raised by the company on short-term basis have not been used to fnance long-term assets except to the extent of Rs.8,54,15,150.

18. During the year, the company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956

19. The company does not have any outstanding debentures as at the year-end.

20. The company has not raised any money by way of public issues during the year.

21. During the course of our examination of the books and records of the Company, carried out in accordance with the Generally Accepted Auditing Practice in India, and according to the information and explanation given to us, we have neither come across any instances of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such cases by the management

For Varma & Varma

Chartered Accountants FRN.004532S

Place : Chennai P. R Prasanna Varma

Date : May 30, 2013 Partner

M.No. 25854


Mar 31, 2012

1. We have audited the attached Balance Sheet of Accel Transmatic Limited as at 31st March 2012, the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto.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.

2. We conducted our audit in accordance with 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.

3. As required by the Companies (Auditor's Report) Order, 2003 as amended by Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Government of India in terms of Section 227 (4A) of the Companies Act, 1956, we give in the Annexure a statement on the matters specified in Paragraphs 4 and 5 ofthe said Order;

4. Without qualifying our opinion attention is invited to Note No. 2. As stated therein, the Company has suffered cash loss from its operations during the year, without considering the profit on transfer of its Software Division.The accumulated loss is more than 50% of its Net worth. This raises concerns about the ability of the Company to continue as a going concern. However, in view ofthe facts stated in the said notes, the Accounts have been drawn up on a going concern basis.

5. Further to our comments stated above, 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, Profit and Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) 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 201 of the Companies Act, 1956;

(e) On the basis of written representations received from the directors, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31st March 2012, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 ofthe Companies Act, 1956;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the notes on the accounts attached thereto, give the information required by the Companies Act, 1956, 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 2012;

ii. in the case of the Profit and Loss Account, of the Profit 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.

Annexure referred to in paragraph 3 of our audit Report of even date

1) a. The company is maintaining records showing full particulars, including quantitative details of fixed assets.

b. The fixed assets of the company have been physically verified by the management during the year, which, in our opinion is reasonable having regard to the size of the company and the nature of assets and as per the information and explanation furnished to us, no material discrepancies have been noticed on such verification.

c. There has not been any disposal of any substantial portion of fixed assets ofthe company during the year, which would affect the status ofthe company as a going concern, except as stated in Note No.23 attached to the Accounts.

2) The inventory of the Company at the year end consists of Digital Assets value Rs. Nil (Intangible Assets) under contract/co - production only and hence, the question of physical verification of inventory does not arise. Hence the Paragraph 4(ii)(a),4(ii)(b) & 4(ii)(c) of Companies (Auditor's Report) (Amendment) Order are not commented upon by us.

3) a. As explained to us, the Company has not advanced any amounts to Companies, Firms or other parties covered in the Register maintained under Section 301 ofthe Companies Act, 1956 and hence, relative reporting requirement of Para 4 (iii (a) to (d)) of the Order is not applicable and not commented upon.

b. The Company has taken unsecured loans from parties / companies in which Directors are interested covered in the register maintained under Section 301 of the Companies Act, 1956. The number of parties and the amount involved are given below:

Maximum Amount Balance as on Number of Parties Outstanding 31.03.2012

3 12,93,94,333/- 7,86,73,333/-

c. In respect of unsecured loans taken as above, in our opinion and according to the information and explanation furnished to us, the rate of interest, where applicable, and other terms and conditions of loans are not prima facie prejudicial to the interest ofthe company.

d. As per the information and explanations given to us, the payment of principal amount and interest thereon is as stipulated.

4) In our opinion and according to the information and explanations given to us, the internal control system for the purchase of fixed assets and for the sale of services are generally commensurate with the size of the company and nature of its business.There are no major weaknesses in internal control of a continuing nature.

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

b. In our opinion and according to the information and explanations given to us, the transactions made in pursuance to contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 with the aforesaid parties exceeding value of Rupees Five Lakhs in respect of each such party which have been entered into during the financial year are at prices which are reasonable having regard to the prevailing market prices at the relevant time

6) In our opinion and according to the information and explanation furnished to us, the company has complied with the directions issued by the Reserve Bank of India and the provisions of Section 58A and 58AA and other relevant provisions of the Companies Act, 1956 with regard to the deposits accepted from the public.

7) The Internal audit of the company was conducted during the year, by a firm of Chartered Accountants, the scope and coverage of which is commensurate with the size of the Company and nature of its business.

8) As per the information and explanation furnished to us, Cost records u/s 209(1 )(d) of the Companies Act, 1956 have not been prescribed in respect of the Services of the Company.

9.) a. There were delays in depositing undisputed statutory dues including Provident fund, Employee's State Insurance, Income Tax, Service Tax & Sales Tax with the appropriate authorities during the year. According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Wealth tax, Service tax, Sales tax, Excise duty, Customs Duty, Cess and other statutory dues which were outstanding at the year end for a period of more than six months from the date they became payable, other than as stated below

(Amount in Rupees)

Outstanding at the Payable for more Paricuars end of the year than 6 months

Professional Tax 927,718/- 887,498/-

Employees State 361,494/- 265,157/- Insurance

Provident fund 173,752/- 18,348/-

Tax Deducted at 6,056,305/- 2,853,040/- Source

b. As per the information and explanation furnished to us, there were no dues of sales-tax, income-tax, wealth-tax, service tax, excise duty, customs duty and cess which have not been deposited on account of any dispute, as at the year end, except the following

SI Particulars Amount Forum where Dispute is No involved (Rs) pending

1 Income tax 13,595,330 Income Tax Appellate Tribunal Demands Kochi

2 Customs 3,388,000 Honorable High Court Of Duty Kerala

3 PF & 2,171,000 Honorable High Court Of Others Kerala - Rs.10.59 lacs, Registrar - EPF Appellate Tribunal - Rs.7.77 lacs, Suit in Civil Court Chennai - Rs.0.64 lacs, Suit in civil court Kerala - Rs.2.71 lacs.

10) The company's accumulated loss at the end of the financial year is more than fifty per cent of net worth of the company. The company has incurred cash loss during the year but has not incurred during the immediately preceding financial year.

11) As per the information and explanations furnished to us and on our verification of records of the company, there have been no delays in repayment of dues to financial institutions or banks.

12) In our opinion and according to the information and explanations given to us, and based on the documents and records produced to us, the company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13) In our opinion and according to the information and explanations given to us, the nature of activities of the company does not attract any special statute applicable to chit fund and nidhi/ mutual benefit fund/ societies.

14) In our opinion, the company is not dealing or trading in shares, securities, debentures or other investments, and accordingly, the relative reporting requirements of the order are not applicable to the company.

15) According to the information and explanations given to us, the company has given a corporate guarantee to a bank on behalf of a company in which the Directors are interested for Rs.3,50,00,000/- for availing loan from the banks by the said company, the terms of conditions of which are not prima facie prejudicial to the interest of the company.

16) In our opinion and according to the information and explanations given to us,Term Loans availed during the year has been utilised for the purpose for which they have been availed.

17) According to the information and explanations given to us and on an overall verification of the attached Balance Sheet of the company, we report that the funds raised by the company on short-term basis have not been used to finance long-term assets except to the extent of Rs.8,54,52,739/-.

18) During the year, the company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

19) The company does not have any outstanding debentures as at the year-end.

20) The company has not raised any money by way of public issues during the year.

21) 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 Varma & Varma

Chartered Accountants

F.R.N.004532S

Place: Chennai P.R Prasanna Varma F.C.A

Date: 29.05.2012 M No: 25854

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