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Auditor Report of Accurate Transformers Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of Accurate Transformers Limited (''the company'') as at 31st March, 2014 and the Statement of Profit & Loss and the Cash Flow Statement for the year 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 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 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. 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:

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2014

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

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

Report on Other Legal and Regulatory Requirements

1) As required by the Companies (Auditor''s Report) Order, 2003 (''the Order''), as amended, 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 which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) in our opinion, subject to Paragraph (3) below, and notes given in Schedule 26, 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, subject to Paragraph (3), Balance Sheet, Statement of Profit & Loss 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; and

e) On the basis of the written representation received from the directors as on 31st March 2014, and taken on the record by the Board of Directors, none of the Directors 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.

Others:

3) a) Income Tax Authorities has conducted search proceedings under section 132 of the

Income Tax Act, 1961 on 26th July 2006. The Assessment proceeding has been completed. The Company has gone in appeal in all cases. The appeal proceeding has also been completed. Now the matter is pending before I.T.A.T.

b) During the Search Proceedings, the Company has offered Rs. 175 lacs as additional income, and the same has been taken into consideration in assessment of the F.Y. 2006-07. The company has taken the same under the head Other Income (in F.Y. 2006-07) and corresponding amount has been shown as other Assets in Long Term Loans and Advances. The exact effect of the same would be taken into the Accounts when the appeal is decided by I.T.A.T.

c) The liability towards the retirement benefits i.e. gratuity and leave encashment was provided by the Company as per the AS-15, issued by ICAI.

d) That the company not follows the Accounting Standard (AS-17), "Segment Reporting" as company deals in Manufacturing of the Transformers, Trading and Electrification Projects (Erection).

Annexure to the Auditor''s Report

The annexure referred to in our report to the members of Accurate Transformers Limited (''the Company'') for the year ended 31st March, 2014. We report that:

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

(b) The management has carried out a physical verification of most of its fixed assets during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the book of account.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) During the year, the inventories have been physically verified by the management except for inventory lying with third parties.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of explanation given by the Management of the Company, the Company is maintaining the proper records of inventories.

(iii) (a)According to the information and explanations given to us, the Company has granted unsecured loans during the year to companies, firms or other parties covered in the Register maintained under section 301 of the Act during the year which are prima facie prejudicial to the interest of the company. The company has maintained running accounts with the parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion, in case of unsecured loans granted or taken to/from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 in the previous years, we are not making any comments because the terms of repayment and/or interest have not been specified.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to sale of goods and services. Further on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control procedures.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars or arrangement referred to in section 301 of the Act transactions 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 of such contracts or arrangements exceeding value of Rupees five lakh have been entered into during the financial year at prices which are reasonable having regard to prevailing market price at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not invited deposits from the public.

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

(viii) The company has informed to us to maintain the cost records, in pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956. We have not examined the records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanations given to us and records of the Company examined by us, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues i.e. employees'' provident fund, ESI, income tax, TDS, service tax, VAT/sales tax, excise duty, cess, Investor education and protection fund and other material statutory dues applicable to it. (Refer to Note No. 26.5(v) of the Schedule 26).

(x) (a) According to the information and explanations given to us and the records of the Company, the following are the particulars of disputed dues on account of excise duty, Income Tax, and Sales tax/VAT, Cess matters that have not been deposited and also not made the provisions in the Books of Accounts by the company as at March 31, 2014.

S. Name of Nature of Amount(Rs. Period to From where dispute is No. the Sta the dues In Lacs)* which the pending tute amount related

1. Central Excise 0.51 2003-04 High court of Allahabad Excise duty 161.00 2002-06 Customs, Excise & tax 36.00 2002-06 Services Tax Appellate 8.38 2008-09 Tribunal

2. Sales Tax Sales Tax 1.92 2008-09 Joint Commissioner / VAT / Vat 0.68 2009-10 (Appeals) 1.77 2009-10 -Do- 0.04 2009-10 -Do-

*Amount as per demand orders including interest and penalty wherever indicated in the demand.

(b) Rs. 6.51 Lacs pertaining to Unclaimed Dividend and Unclaimed Share Application Money due, not deposited with the Investor Education and Protection Fund till date.

(xi) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year and in the immediately preceding financial year.

(xii) According to the records of the company examined by us and the information and explanations given to us, the Company during the year has not defaulted in repayment of dues to financial institution, banks.

(xiii) As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4 (xii) of the Order is not applicable.

(xiv) The provisions of any special statue as specified under paragraph 4 (xiii) of the Order are not applicable to the Company.

(xv) As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (xiv) of the Order is not applicable.

(xvi) 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 bank or financial institution.

(xvii) In our opinion and according to the information and explanations given to us, term loans were utilised for the purpose for which loans were obtained.

(xviii) In our opinion and according to the information and explanations given to us, funds raised on short term basis have, prima facie, not been used during the year for long-term investments.

(xix) According to the information and explanation given to us, the company has not allotted any shares on preferential basis to parties and companies covered in the Register maintained under section 301 of the Act.

(xx) As the Company has not issued any debentures, paragraph 4 (xix) of the Order is not applicable.

(xxi) As the Company has not raised any money by way of public issue, paragraph 4 (xx) of the Order is not applicable.

(xxii) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31, 2014.

FOR OM PRAKASH YADAV & CO.

(Chartered Accountants)

Sd/- DATE:- 01/09/2014 Om Prakash Yadav F.C.A. PLACE: - Noida PROP.

M. No. 51079


Mar 31, 2013

Report on the Financial Statement

We have audited the accompanying financial statements of accurate Transformers Limited (''the company'') as at 31st March, 2013 and the Statement of Profit and Loss and the Cash Flow Statement for the year ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statement

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance 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 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 ouraudit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those statements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about wether 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. 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 basisforouraudit 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 :

i. In the case of the Balance Sheet, of the state affairs of the Company as at 31st March, 2013; and

ii. In the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

iii. In the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms (4A) of section 227 of the Ac, we given 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 which to the best of our knowledge and belief were necessary for the purpose of our audit;

b) In our opinion, subject to paragraph (3) below, and notes given in schedule 26, proper books of account as required by law have been kept by the company so far as appears from our examination of the books;

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

d) In our opinion, subject to paragraph (3), Balance Sheet, Statement of Profit & 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; and

e) On the basis of the written representation received from the directors as 31 st March, 2013 and taken on the record by the Board of Directors, none of the Directors of are disqualified as on 31 st 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.

3. Others

a) Income Tax Authorities has conducted search proceedings under section 132 of the Income Tax Act, 1961 on 26th July 2006. The Assessment proceeding has been completed. The Company has gone in appeal in all cases. Now the matter is pending before I.T.A.T

b) During the Search Proceedings, the Company has offered Rs. 175 lacs as additional income, and the same has been taken into consideration in assessment of the F.Y. 2006-07.The Company has taken the same under the head other Income (in F.Y. 2006-07) and corresponding amount has been shown as other current assets in Long Term Loans and Advances. The exact effect of the same would be taken into the Accounts when the appeal is decided by I.T.A.T.

c) The liability towards the retirement benefits i.e. gratuity and leave encashment was provided by the Company on cash basis, contrary to the AS-15, issued by ICAI, the effect of the same is not ascertainable as the amount of liability is not available.

d) That the company not follows the Accounting Standard (AS-17), "Segment Reporting" as company deals in Manufacturing of the Transformers/Trading and Electrification Project (Erection).

Annexure referred to in paragraph (3) of the Auditors'' Report of even date on the accounts of Accurate Transformers Limited for the year ended 31st March, 2013

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

(b) The management has carried out a physical verification of most of its fixed assets during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the book of account.

(c) There was no disposal of a substantial part offixed assets during the year.

(ii) (a) During the year, the inventories have been physically verified by the management except for inventory lying with third parties.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of ourexamination given by the management of the company the Company is maintaining proper records of inventories.

(iii) (a) According to the information and explanations given to us, the Company has granted unsecured loans, during the year to companies, firms or other parties covered in the Register maintained under section 301 of the Act during the year which are prima facie prejudicial to the interest of the company. The company has maintained running accounts with the parties covered in the register maintained under section 301 of the Companies Act, 1956. The amount receivable as the close of year is Rs. 2,098.37 Lacs (Number of Parties-3).

(b) According to the information and explanations given to us, the Company has taken unsecured loans during the year from the companies, firms or other parties covered in the Register maintained under section 301 of the Act during the year. The company has maintained running accounts with the parties covered in the register maintained under section 301 of the Companies Act, 1956. The amount receivable as the close of year is Rs. 2,098.37 Lacs (Number of Parties -3).

(c) In our opinion, in case of unsecured loans, granted or taken to/from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 in the previous years, there is no stipulation with regards to repayment of principal amount and payment of interest in respect of loan given by the Company. No interest has been charged on such account.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to sale of goods and services. Further on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in the aforesaid internal control procedures.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars or arrangement referred to in section 301 of the Act transactions 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 of such contracts or arrangements exceeding value of Rupees five lakh have been entered into during the financial year at prices which are reasonable having regard to prevailing market price at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not invited deposits from the public.

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

(viii) The company has informed to us to maintain the cost records, in pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956. We have not examined the records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanations given to us and records of the Company examined by us, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues i.e. employees'' provident fund, ESI, income tax, TDS, service tax, VAT/sales tax, excise duty, cess, Investor education and protection fund and other material statutory dues applicable to it. (Referto Note No. 26.5(V) of the Schedule 26).

(x) (a) According to the information and explanations given to us and the records of the Company, the following are the particulars of disputed dues on account of excise duty, Income Tax, and Sales tax/VAT, Cess matters that have not been deposited and also not made the provisions in the Books of Accounts by the company as at March 31,2013.

S. Name of the Statute Nature Amount No. of the (Rs. in dues Lacs)*

1. Central Excise Tax Excise 0.51

Duty 161.00

36.00

8.38

2. Income Tax Act,1961 Income 26.25 Tax

3. Sales Tax/VAT Sales 1.92

Tax/VAT 0.68

1.77

0.04

Name Period to From where dispute which the is pending amount related

Central Excise Tax 2003-2004 High Court of Allahabad

2002-2006 Customs, Excises

2002-2006 Services Tax Appellate

2008-2009 Tribunal

Income Tax Act,1961 2009-2010 Commissioner of

Income tax (Appeals)

2008-2009 Joint Commissioner

Sales Tax/VAT 2009-2010 (APPeals)

2009-2010

2009-2010

*Amount as per demand orders including interest and penalty wherever indicated in the demand.

(C) Rs. 6.51 Lacs pertaining to Unclaimed Dividend and Unclaimed Share Application Money due, not deposited with the Investor Education and Protection Fund till date.

(xi) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year and in the immediately preceding financial year.

(xii) According to the records of the company examined by us and the information and explanations given to us, the Company during the year has not defaulted in repayment of dues to financial institution, banks.

(xiii) As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4 (xii) of the Order is not applicable.

(xiv) The provisions of any special statue as specified under paragraph 4 (xiii) of the Orders are not applicable to the Company.

(xv) As the Company is not dealing ortrading in shares, securities, debentures and other investments, paragraph 4 (xiv) of the Order is not applicable.

(xvi) 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 bank or financial institution.

(xvii) In our opinion and according to the information and explanations given to us, terms loans were applied forthe purpose for which loans were obtained.

(xviii) In our opinion and according to the information and explanations given to us, funds raised on short term basis have, prima facie, not been used during the year for long- term investments.

(xix) According to the information and explanation given to us, the company has not allotted any shares on preferential basis to parties and companies covered in the Register maintained undersection301 of the Act.

(xx) As the Company has not issued any debentures, paragraph 4 (xix) of the Order is not applicable.

(xxi) As the Company has not raised any money by way of public issue, paragraph 4 (xx) of the Order is not applicable.

(xxii) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31,2013.

For S.LAL& COMPANY

Chartered Accountants

SohanLal,F.C.A.

Ghaziabad

Partner

Dated: 05.09.2013 M. No. 017310


Mar 31, 2012

1. We have audited the attached Balance Sheet of ACCURATE TRANSFORMERS LIMITED as at 31st March, 2012 and also the Profit & Loss Account and the Cash flow Statement for the year ended on that date annexed thereto. The financial statements are the responsibility of the Management of the Company. 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. Those 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 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 (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to above, 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, subject to paragraph 5.1,5.2 and 5.3 below, and notes given in schedule 26, proper books of account as required by law have been kept by the company so far as appears from our examination of the books;

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

d. In our opinion, subject to paragraph 5.4 and 5.5, Balance Sheet, Profit & 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;

e. On the basis of the written representation received from the directors and taken on the record by the Board of Directors, we report that none of the director of the Company is disqualified as on 31st March, 2012 from being appointed as a director under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 with reference to the matters relating to the Company;

f. In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with accounting policies and notes thereon and attached thereto, give the information required by the Companies Act, 1956 in the manner so required and subject to our comments in paragraph 5 below, give respectively, 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 at31 st March, 2012; and

(ii) in the case of the Profit & Loss Account, Profit for the year ended on that date; and

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

5.1 Income Tax Authorities has conducted search proceedings under section 132 of the Income Tax Act, 1961 on 26th July 2006 The Assessment proceeding has been completed. The Company has gone in appeal in all cases. Now the matter is pending before I.T.A.T.

5.2 During the Search Proceedings, the Company has offered Rs. 175 lacs as additional income, and the same has been taken into consideration in assessment of the F.Y. 2006-07.The Company has taken the same under the head other Income (in F.Y. 2006-07) and corresponding amount has been shown as other current assets. The exact effect ofthe same would betaken into the Accounts when the appeal is decided by I.T.A.T.

5.3 The liability towards the retirement benefits i.e. gratuity and leave encashment was provided by the Company on cash basis, contrary to the AS-15, issued by ICAI, the effect ofthe same is not ascertainable as the amount of liability is not available.

5.4 That the company not follows the Accounting Standard (AS-17), "Segment Reporting" as company deals in Manufacturing ofthe Transformers, Trading of Iron & Steel and Electrification Project (erection).

Annexure referred to in paragraph (3) of the Auditors' Report of even date on the accounts of Accurate Transformers Limited for the year ended 31st March, 2012

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

(b) The management has carried out a physical verification of most of its fixed assets during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the book of account.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) During the year, the inventories have been physically verified by the management except for inventory lying with third parties.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of stocks followed by the management are not reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the record of inventories, we are of the opinion that, the Company is maintaining proper records of inventories.

(iii) (a) According to the information and explanations given to us, the Company has granted loans, secured or unsecured during the year to companies, firms or other parties covered in the Register maintained under section 301 of the Act during the year which are prima facie prejudicial to the interest of the company.

(b) According to the information and explanations given to us, the Company has taken unsecured loans during the year from the companies, firms or other parties covered in the Register maintained under section 301 of the Act during the year.

(c) In our opinion, in case of loans, secured or unsecured granted or taken to/from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 in the previous years, we are not making any comments because the terms of repayment and/or interest have not been specified.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to sale of goods and services. Further on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been inform of any instances of major weaknesses in the aforesaid internal control procedures.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars or arrangement referred to in section 301 of the Act transactions 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 of such contracts or arrangements exceeding value of Rupees five lakh have been entered into during the financial year at prices which are reasonable having regard to prevailing market price at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not invited deposits from the public.

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

(viii) The company has informed to us to maintain the cost records, in pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956. We have not examined the records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanations given to us and records of the Company examined by us, the Company is generally regular in depositing with the appropriate authorities undisputed statutory dues i.e. employees' provident fund, ESI, income tax, TDS, service tax, VAT/sales tax, excise duty, cess, Investor education and protection fund and other material statutory dues applicable to it. (Referto Note No. 26.5(V) of the Schedule 26).

(x) According to the information and explanations given to us and the records of the Company, the following are the particulars of disputed dues on account of excise duty, Income Tax, and Sales tax/VAT, Cess matters that have not been deposited by the company as at March 31,2012.

S. Name of the Statute Nature Amount No. of the (Rs.in dues Lacs)*

1. Central Excise Tax Excise 0.51 duty 161.00

36.00 8.38

2. Income Tax Act, Income 26.25 1961 Tax

3. Sales Tax/VAT Sales 1.92 Tax/Vat 0.93 0.42 0.68 0.34 1.77 0.04 2.40

Name of the Statute Period to From where dispute which the is pending amount related

Central Excise Tax 2003-04 High court of Allahabad

2002-06 Customs, Excise & Services 2002-06 Tax Appellate Tribunal

2008-09

Income Tax Act 2009-10 Commissionerof

Income Tax (Appeals)

Sales Tax /VAT 2007-08 Joint Commissioner (Appeals)

2009-10

2009-10

2009-10

2009-10

2009-10

2009-10

2008-09

* Amount as per demand orders including interest and penalty wherever indicated in the demand.

(C) Rs. 6.51 Lacs pertaining to Unclaimed Dividend and Unclaimed Share Application Money due, not deposited with the Investor Education and Protection Fund till date.

(xi) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year and in the immediately preceding financial year.

(xii) According to the records of the company examined by us and the information and explanations given to us, the Company during the year has not defaulted in repayment of dues to financial institution, banks or debenture holders.

(xiii) As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4 (xii) of the Order is not applicable.

(xiv) The provisions of any special statue as specified under paragraph 4 (xiii) of the Order are not applicable to the Company.

(xv) As the Company is not dealing ortrading in shares, securities, debentures and other investments, paragraph 4 (xiv) of the Order is not applicable.

(xvi) 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 bank or financial institution.

(xvii) In our opinion and according to the information and explanations given to us, terms loans were applied for the purpose for which loans were obtained.

(xviii) In our opinion and according to the information and explanations given to us, funds raised on short term basis have, prima facie, not been used during the year for long- term investments.

(xix) According to the information and explanation given to us, the company has not allotted any shares on preferential basis to parties and companies covered in the Register maintained under section 301 oftheAct.

(xx) As the Company has not issued any debentures, paragraph 4 (xix) of the Order is not applicable.

(xxi) As the Company has not raised any money by way of public issue, paragraph 4 (xx) of the Order is not applicable.

(xxii) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31,2012.

For S.LAL& COMPANY

Chartered Accountants

Sohan Lai, F.C.A

Ghaziabad Partner

Dated:05.09.2012 M. No.017310


Mar 31, 2010

1. We have audited the attached Balance Sheet of ACCURATE TRANSFORMERS LIMITED as at 31st March, 2010 and also the Profit & Loss Account for the year ended on that date annexed thereto and the cash flow statement for the year ended on that date. Theses financial statements are the responsibility of the Management of the Company. 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. Those 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 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 (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of section 227 (4A) of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order to the extent applicable.

4. Further to our comments in the Annexure referred to above, 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, subject to paragraph 5.1 and 5.2 below, proper books of account as required by law have been kept by the company so far as appears from our examination of the books ;

c. The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with the books of account;

d. In our opinion, subject to paragraph 5.3 and 5.4, Balance Sheet and Profit & Loss Account 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 the written representation received from the directors and taken on the record by the Board of Directors, we report that none of the director of the Company is disqualified as on 31st March, 2010 from being appointed as a director under clause (g) of sub-section (1) of section 274 of the Companies Act, 1956 with reference to the matters relating to the Company;

f. In our opinion and to the best of our information and according to the explanation given to us, the said accounts read together with accounting policies and notes thereon and attached thereto, give the information required by the Companies Act, 1956 in the manner so required and subject to our comments in paragraph 5 below, give respectively, 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, 2010; and

(ii) in the case of the Profit & Loss Account, Profit for the year ended on that date; and

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

5.1 Income Tax Authorities has conducted search proceedings under section 132 of the Income Tax Act, 1961 on 26th July 2006. The Assessment proceeding has been completed. The Company has gone in appeal in all cases. Now the matter is pending before CIT (Appeals).

5.2 During the Search Proceedings, the Company has offered Rs. 175 lacs as additional income, and the same has been taken into consideration in F.Y. 2006-07. The Company has taken the same under the Head Other Income (in F.Y. 2006-07) and corresponding amount has been shown as other current assets. The exact of the same would be taken into the Accounts when the appeal is decided by CIT (Appeals).

5.3 The liability towards the retirement benefits i.e. gratuity and leave encashment was provided by the Company on cash basis, contrary to the AS-15, issued by ICAI, the effect of the same is not ascertainable as the amount of liability is not available.

5.4 That the company not follows the Accounting Standard (AS-17), "Segment Reporting" as company deals in Manufacturing of the Transformers, Trading of Iron & Steel and Electrification Project (erection).

Annexure referred to in paragraph (3) of the Auditors Report of even date on the accounts of Accurate Transformers Limited for the year ended 31st March, 2010.

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

(b) The management has carried out a physical verification of most of its fixed assets during the year. In our opinion, the frequency of verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly dealt with in the book of account.

(c) In our opinion and according to the information and explanations given to us, during the year there was no substantial disposal of fixed assets during the year.

(ii) (a) During the year, the inventories have been physically verified by the management except for inventory lying with third parties.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the record of inventories, we are of the opinion that, the Company is not maintaining proper records of inventories.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured during the year to companies, firms or other parties covered in the Register maintained under section 301 of the Act during the year.

(b) According to the information and explanations given to us, the Company has not taken unsecured loans during the year from the companies, firms or other parties covered in the Register maintained under section 301 of the Act during the year.

(c) In our opinion, in case of loans, secured or unsecured granted or taken to/from companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956 in the previous years, we are not making any comments because the terms of repayment and/or interest have not been specified.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to the purchase of inventories and fixed assets and with regard to sale of goods and services. Further on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instances of major weaknesses in tha aforesaid internal control procedures.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars or arrangement referred to in section 301 of the Act transactions 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 of such contracts or arrangements exceeding value of Rupees five lakh have been entered into during the financial year at prices which are reasonable having regard to prevailing market price at the relevant time.

(vi) In our opinion and according to the information and explanations given to us, the Company has not invited deposits from the public.

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

(viii) The company has informed to us to maintain the cost records, in pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956. We have not examined the records with a view to determine whether they are accurate or complete.

(ix) (a) According to the information and explanations given to us and records of the Company examined by us, the Company is generally regular in depositing, except in few cases, undisputed statutory dues including employees provident fund, income tax, service tax and other material statutory dues applicable to it (Refer note no. 5 (iii) to the schedule 16).

(b) According to the information and explanations given to us and the records of the Company,

(x) According to the information and explanations given to us and the records of the Company, the following are the particulars of disputed dues on account dues on account of Excise duty, Income Tax, and Sales Tax matters that have not been deposited by the company as at March 31, 2010.

S. Name of Nature Amount Period to From where No. the Statute of (Rs. In which dispute is Duties Lacs) the amt. pending related

1 Central Excise Tax Excise Duty 0.51 2003-04 High Court of Allahabad

161.00 2002-06 Customs, Excise & Service Tax Appellate Tribunal

36.00 2002-06 Commissioner (Appeals)

66.28 2008-09 Commissioner (Appeals)

2 Income Tax Income Tax 23.88 2001-02 Commissioner of Income Tax

15.85 2002-03 -Do-

52.87 2003-04 -Do-

38.42 2004-05 -Do-

136.57 2005-06 -Do-

361.78 2006-07 -Do-

187.36 2007-08 -Do-

3 Sales Tax Sales Tax/ 0.32 2007-08 Jt. Commissioner VAT (Appeals)

1.92 2007-08 -Do-

2.40 2008-09 Dy. Commissioner (Appeals)

1.92 2008-09 Jt. Commissioner (Appeals)

0.93 2009-10 -Do-

0.42 2009-10 -Do-

0.68 2009-10 -Do-

8.23 2009-10 -Do-

0.72 2009-10 -Do-

0.33 2009-10 -Do-

(xi) The Company does not have any accumulated losses at the end of the financial year and has not incurred cash losses during the financial year and in the immediately preceding financial year.

(xii) According to the records of the company examined by us and the information and explanations given to us, the Company during the year has not defaulted in repayment of dues to financial institution, banks or debenture holders.

(xiii) As the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, paragraph 4 (xii) of the Order is not applicable.

(xiv) The provisions of any special statue as specified under paragraph 4 (xiii) of the Order are not applicable to the Company.

(xv) As the Company is not dealing or trading in shares, securities, debentures and other investments, paragraph 4 (xiv) of the Order is not applicable.

(xvi) 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 bank or financial institution.

(xvii) In our opinion and according to the information and explanations given to us, terms loans were applied for the purpose for which loans were obtained.

(xviii) In our opinion and according to the information and explanations given to us, funds raised on short term basis have, prima facie, not been used during the year for long- term investments.

(xix) As the Company has not made any preferential allotment of shares during the year, paragraph 4 (xviii) of the Order is not applicable.

(xx) As the Company has not issued any debentures, paragraph 4 (xix) of the Order is not applicable.

(xxi) As the Company has not raised any money by way of public issue, paragraph 4 (xx) of the Order is not applicable.

(xxii) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit for the year ended March 31, 2010.

FOR S. LAL & COMPANY

Chartered Accountants

Sohan Lal, F.C.A.

Partner

M. No. 017310

Ghaziabad

Dated : 03.09.2010



 
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