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Auditor Report of AIA Engineering Ltd.

Mar 31, 2015

We have audited the accompanying Standalone Financial Statements of AIA Engineering Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the Significant Accounting Policies and other explanatory information.

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 of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Financial Statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' 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 are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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 profit and its 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, 2015 ("the Order"), issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Companies Act, 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

(a) We have sought 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) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

(i) The Company has disclosed the impact of pending litigations on its financial position in its Financial Statements - Refer Note 31(1)(a) to the Financial Statements;

(ii) The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 32 to the Financial Statements;

(iii) There has been no delay in transferring the amount required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.)

(i) In respect of its Fixed Assets:

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

(b) As explained to us, Majority of the Fixed Assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(ii) In respect of its Inventories:

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

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

(c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

(iii) During the year the Company has not given any loans secured or unsecured to the Companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013. Hence Clause (iii) (a) and (b) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit and hence the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the Companies (Acceptance of Deposits) Rules, 2014, with regard to the deposits accepted are not applicable to the Company. Therefore, the provisions of clause (v) of paragraph 3 of the Order are not applicable to the Company. According to the information and explanations given to us, no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the Cost Records with the view to determine whether they are accurate or complete.

(vii) In respect of statutory dues:

(a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were in arrears as at 31st March, 2015 for a period of more than six months from the date they became payable.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

(b) The disputed Statutory dues aggregating to Rs.4,335.54 Lacs, that have not been deposited on account of disputed statutory matters pending before appropriate authorities are as under:

Name of the Statute Nature of dues Amt. under dispute not yet deposited as on 31st March,2015 Rs. Lacs

The Central Excise Act, Excise Duty including 36.13 1944 interest and penalty as applicable 82.82

5.43

34.77

2.34

436.60

Finance Act, 1994 Service Tax including interest 4.74 (Service Tax) and penalty as applicable 25.10

8.83

29.38

7.70

24.69

6.23

2.08

16.37

28.39

87.17

12.11

33.93

12.11

41.00

0.62

Central Sales Tax Act,1956 Sales Tax including interest 19.76 & Sales Tax Act of various and penalty as applicable States

Income Tax Act, 1961 Income Tax including interest 17.24 and penalty as applicable 1,520.34

1,830.28

9.38

Total 4335.54

Name of the Statute Periods to Forum where the which the dispute is pending amount relates (F.Y.)

The Central Excise Act, 1998-99 Supreme Court 1944 and 1999-2000

2003-04 CESTAT

Prior to 2006 High Court

2006-07 CESTAT and 2007-08

2006-09 Asst. Commissioner

2009-10 Asst. Commissioner to 2011-12

Finance Act, 1994 2007-08 CESTAT (Service Tax) 2008-09 CESTAT

2009-10 CESTAT

2010-11 CESTAT

2011-12 Asst. Commissioner

2011-12 CESTAT

2007-08 Asst. Commissioner/ to 2009-10 Divisional Officer

2005-06 CESTAT and 2006-07

2010-11 Commissioner Appeals to 2012-13

2012-13 Commissioner Appeals

2010-11 CESTAT to 2013-14

2011-12 Asst. Commissioner/ to 2013-14 Divisional Officer

2013-14 Asst. Commissioner/ Divisional Officer

2010-11 Asst. Commissioner/ to 2013-14 Divisional Officer

2013-2014 Asst. Commissioner/ and 2014-15 Divisional Officer

2014-15 Asst. Commissioner/ Divisional Officer

Central Sales Tax Act,1956 2001-02 Dy. Commissioner of & Sales Tax Act of various Commercial Tax (Appeal) States

Income Tax Act, 1961 2007-08 CIT (Appeals)

2008-09 CIT (Appeals)

2009-10 CIT (Appeals)

2007-08 CIT (Appeals)

(c) There has been no delay in transferring the amount required to be transfered to the Investor Education and Protection Fund by the Company.

(viii) The Company does not have any accumulated losses at the end of the Financial Year. The Company has not incurred cash losses during the Financial Year covered by our audit and in the immediately preceding Financial Year.

(ix) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to the financial institutions or banks or debenture holders.

(x) In our opinion the Company has provided Guarantees for Non-fund based limits taken by its Subsidiaries from Banks. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prejudicial to the interest of the Company.

(xi) According to the information and explanations given to us, the Term Loans were applied for the purpose for which it is obtained.

(xii) Based on the audit procedures performed and representation obtained from management we report that, no case of material fraud on or by the Company has been noticed or reported for the year under audit.

For Talati & Talati Chartered Accountants (Firm Regn No: 110758W)

Anand Sharma Place of Signature : Ahmedabad (Partner) Date : 19th May, 2015 Mem No: 129033


Mar 31, 2014

We have audited the accompanying Financial Statements of AIA Engineering Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2014, and the Statement of Profit and Loss and 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 gives a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards notified under the Companies Act, 1956 ("the Act") read with the General Circular No. 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.

Auditors'' 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 Auditors'' judgement, 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 controls 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 Company''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 aforesaid Financial Statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

(c) In the case of the Cash Flow Statement, of the cash 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") 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 explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by the Company so far as 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 Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with this Report comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular No. 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 31st March, 2014, and taken on record by the Board of Directors, none of the Directors is 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:

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT (Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.)

(i) In respect of its Fixed Assets:

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

(b) As explained to us, Majority of the Fixed Assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) In our opinion, the Company has not disposed off any substantial part of the Fixed Assets during the year, and therefore, do not affect the going concern assumption.

(ii) In respect of its Inventories:

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

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

(c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

(iii) (a) During the year the Company has not given any loans secured or unsecured to the Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956. Hence Clause (iii) (b), (c), (d) are not applicable to the Company.

(b) The Company has not taken any loans, secured or unsecured from Companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 and hence Clause (iii)(f) and (iii)(g) of paragraph 4 of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of Inventory, Fixed Assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) In respect of contracts or arrangements referred to in Section 301 of the Companies Act,1956 :

(a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the 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 contracts/arrangements entered in the Register maintained under section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the Company.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public and hence the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public are not applicable to the Company. Therefore, the provisions of Clause (vi) of paragraph 4 of the Order are not applicable to the Company.

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

(viii) We have broadly reviewed the Cost Records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed Cost Records have been maintained. We have, however, not made a detailed examination of the Cost Records with the view to determine whether they are accurate or complete.

(ix) In respect of statutory dues :

(a) According to the records of the Company, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty Cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were in arrears as at 31st March, 2014 for a period of more than six months from the date they became payable.

(b) The disputed Statutory dues aggregating to Rs. 3,464.70 lacs , that have not been deposited on account of disputed statutory matters pending before appropriate authorities are as under:

Name of the Statute Nature of dues Amt. under dispute not yet deposited As on 31st March, 2014 Rs. Lacs

Income Tax Act, 1961 Income Tax including 64.45 interest as applicable

1.49

27.45

80.55

1520.34

The Central Excise Act, 1944 Excise Duty including 130.70 interest and penalty as applicable

82.82

8.11

Finance Act, 1994 Service Tax including 41.66 (Service Tax) interest and penalty as applicable

2.08

3.38

1254.94

93.40 0.85 6.22

126.50

Central Sales Tax Act, 1956 Sales Tax / Central Sales Tax 19.76 and Sales Tax Act of various States

Total 3464.70



Name of the Statue Periods to Forum where the which the dispute is pending amount relates (F.Y.)

Income Tax Act, 1961 2005-06 CIT(Appeal)

2006-07 CIT(Appeal)

2006-07 ITAT

2007-08 ITAT

2008-09 CIT(Appeal)

The Central Excise Act, 1944 2002-05 CESTAT

2003-04 CESTAT

2006-10 Commissioner (Appeal)

Finance Act, 1994 (Service Tax) 1997-98 Addl. Commissioner to 2002-03

2005-07 CESTAT

2006-07 Asst. Commissioner

2006-07 CESTAT to 2007-08

2007-11 CESTAT

2009-10 Commissioner(Appeal)

2009-10 Asst. Commissioner to 2011-12

2010-11 Jt. Commissioner

Central Sales Tax Act, 1956 and Sales Tax Act of various States 2001-02 Dy. Commissioner of Commercial Tax (Appeal)

Total

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

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to the banks.

(xii) In our opinion and according to explanations given to us and based on the information available, no loans and advances have been granted by Company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund/society. Therefore, the provisions of Clause (xiii) of paragraph 4 of the Order are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause (xiv) of paragraph 4 of the Order are not applicable to the Company.

(xv) In our opinion the Company has provided Guarantees for Non-fund based limits taken by its Subsidiaries from Banks. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the Term Loans were applied for the purpose for which they are obtained.

(xvii) Based on the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that no funds raised on short-term basis have been used for long-term investment by the Company.

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

(xix) During the year covered by our audit report, the Company has not issued any debentures. Accordingly, the provisions of Clause (xix) of paragraph 4 of the Order are not applicable to the Company.

(xx) The Company has not raised any monies by way of Public Issues during the year.

(xi) Based on the audit procedures performed and representation obtained from management we report that, no case of material fraud on or by the Company has been noticed or reported for the year under audit.

For TALATI & TALATI

Chartered Accountants

(Firm Regn. No. 110758W)

(Anand Sharma)

Place :AHMEDABAD Partner

Date :20th May, 2014 Membership No. 129033


Mar 31, 2013

Report on the Financial Statements:

We have audited the accompanying financial statements of AIA Engineering Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2013, and the Statement of Profit and Loss and 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"). 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 controls 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2013;

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

(c) In the case of the Cash Flow Statement, of the cash 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") 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 explanations which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by the Company so far as 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 Balance Sheet, the Statement of Profit and Loss, and the 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 31st March, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956:

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT:

(Referred to in paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.)

(i) In respect of its fixed assets :

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

(b) As explained to us, Majority of the fixed assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification.

(c) In our opinion, the Company has not disposed off a substantial part of its Fixed Assets during the year and the going concern status of the Company is not affected.

(ii) In respect of its Inventories :

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

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

(c) The Company has maintained proper records of inventories. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

(iii) (a) During the year the company has not given any loans secured or unsecured to the companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956. Hence Clause (iii) (b), (c) and (d) of paragraph 4 of the Order are not applicable to the company.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956 and hence Clause(iii)(f) and (iii)(g) of paragraph 4 of the Order are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) In respect of the contracts or arrangements referred to in Section 301 of the Companies Act,1956:

(a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the 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 contracts/arrangements entered in the Register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. 5,00,000 in respect of each party during the year have been made at prices which appear reasonable as per information available with the company.

(vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public and hence the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public are not applicable to the Company. Therefore, the provisions of Clause(vi) of paragraph 4 of the Order are not applicable to the company.

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

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1)(d) of the Companies Act,1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) In respect of statutory dues:

(a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess and other material statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid statutory dues were outstanding as at 31st March, 2013 for a period of more than six months from the date they became payable.

(b) The disputed Statutory dues aggregating to Rs. 1689.91 lacs that have not been deposited on account of disputed statutory matters pending before appropriate authorities are as under:

Name of the Statute Nature of dues Amt. under dispute not yet deposited As on 31st March, 2013 Rs. Lacs

Income Tax Act, 1961 Income Tax including 27.45 interest as applicable

1.49

The Central Excise Act, 1944 Excise Duty including 53.79 interest and penalty as applicable

2.94

6.31

130.70

82.82

1.42

5.72

Finance Act 1994 Service Tax including 41.66 (Service Tax) interest and penalty as applicable 1254.94

2.08

19.29

4.87

6.22

Central Sales Tax Act, 1956 Sales Tax/ Central Sales Tax 28.45

19.76 and Sales Tax Act, of Various States

Total 1689.91

Name of the Statute Periods to Forum where the which the dispute is pending amount relates (F.Y.)

Income Tax Act, 1961 2006-07 ITAT

2006-07 CIT (Appeal)

The Central Excise Act, 1944 2000-04 Gujarat High Court

Supreme Court

CESTAT

2002-05 CESTAT

2003-04 CESTAT

2005-09 Commissioner (Appeal)

2006-10 Asst. Commissioner

Finance Act, 1994 (Service Tax) 1997-98 Commissioner (Appeal) to returned to Asst. 2007-08 Commissioner

2006-07 to 2007-08 CESTAT

2005-07 CESTAT

2008-09 CESTAT

2009-10 Asst. Commissioner

2009-10 Asst. Commissioner to 2011-12

Central Sales Tax Act, 1956 and Sales Tax Act, of Various States 2003-04 Dy.Commissioner of 2004-05 Commercial Tax (Appeal)

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

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the company has not defaulted in repayment of dues to the banks.

(xii) In our opinion and according to explanations given to us and based on the information available, no loans and advances have been granted by company on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a chit fund / nidhi / mutual benefit fund/society. Therefore, the provisions of Clause(xiii) of paragraph 4 of the Order are not applicable to the company.

(xiv) The company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause (xiv) of paragraph 4 of the Order are not applicable to the company.

(xv) In our opinion the Company has provided Guarantees for Non-fund based limits taken by its subsidiaries from Banks. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prejudicial to the interest of the Company.

(xvi) The Company has raised new Term Loans during the year which have been applied for the purposes for which they were raised.

(xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that no funds raised on short-term basis have been used for long-term investment by the Company.

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

(xix) During the year covered by our audit report, the Company has not issued any debentures. Accordingly, the provisions of Clause (xix) of paragraph 4 of the Order are not applicable to the company.

(xx) The Company has not raised any monies by way of Public Issues during the year.

(xxi) Based on the audit procedures performed and representation obtained from management we report that, no case of material fraud on or by the Company has been noticed or reported for the year under audit.

For TALATI & TALATI

Chartered Accountants

(Firm Regn. No. 110758W)

(Anand Sharma)

Place : AHMEDABAD Partner

Date : 30th May, 2013 Membership No. 129033


Mar 31, 2010

1. We have audited the attached Balance Sheet of AIA ENGINEERING LIMITED as at 31st March 2010, 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 Companys management. Our responsibility is to express an opinion on these Financial Statements based on our audit.

2. We conducted our audit in accordance with the 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 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 (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that;

i. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit.

ii. In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of those books;

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

iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with this Report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

v. Without qualifying our opinion, we draw attention to:

(a) Note 9 of Schedule 17 regarding derivatives contracts entered into by the Company to hedge Foreign Currency Risk. The notional Marked - to - Market loss on these unexpired contracts as on 31st March 2010 amounting to Rs.2537.78 Lacs has not been considered in the Financial Statements.

(b) Note 11 of Schedule 17 regarding valuation of inventory of raw materials, stores and spares. During the year, the Company has implemented SAP as ERP Platform and the valuation of inventories of raw materials, stores and spares for the year is done on the basis of Moving Weighted Average Method instead of FIFO / YTD average basis applied in the earlier years. Had the Company followed the same previous year method of valuing inventories of raw materials, stores and spares, the value of inventory would have been less by Rs.72.35 Lacs and consequently the Profit for the year ended 31st March 2010 would have been less by Rs.72.35 Lacs. Further, previous year figures are not comparable to that extent.

vi. On the basis of written representations received from the Directors, as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

vii. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view 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 31s March, 2010.

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

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

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

(b) Majority of the assets have been physically verified by the management during the year and there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) During the year, the Company has not disposed off any major part of the Fixed Assets.

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

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

(c) On the basis of our examination of the records of the Company, we are of the opinion that the Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) (a) During the year, the Company has not granted unsecured loan to any Company / firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Consequently, Clause (iii) (b), (iii) (c) and (iii) (d) of Paragraph 4 of the Order are not applicable. (b) The Company has not taken any Loans, secured or unsecured, from Companies, firms or other parties covered in the Register maintained under section 301 of the Companies Act, 1956. Consequently, Clause (iii) (f) and (iii) (g) of Paragraph 4 of the Order are not applicable. (iv) In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weaknesses have been noticed in the internal controls. (v) (a) Based on the audit procedures applied by us and according to the information and explanations provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under Section 301 have been so entered. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 have been made at prices which are resonable having regard to the prevailing market prices at the relevant time. (vi) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit from the public and hence the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public are not applicable to the Company. (vii) The Company has appointed a firm of Chartered Accountants as its Internal Auditor for the year under review. The Internal Audit for the year is therefore carried out by the said firm. In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (viii) The Central Government has not prescribed maintenance of cost records under Section 209(l)(d) of the Companies Act, 1956. Therefore the provisions of this Clause of the Order are not applicable to the Company. (ix) (a) According to the records of the Company, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and other Statutory Duties applicable to it. There are no undisputed Statutory Dues as referred to above as at 31st March 2010 outstanding for a period of more than six months from due date they become payable.

(b) According to the information and explanations given to us, details of dues of Income Tax, Excise Duty, Service Tax, Sales Tax and ESIC which have not been deposited on account of any dispute are given below:

Name of Nature of dues Amount under Periods to Forum the statute dispute not which the wherethe yet deposited amount dispute Rs. in Lacs relates is pending Income Tax Act Income Tax including interest and 1961 penalty as applicable. 6.84 2003-2004 Tribunal The Central Excise Duty including interest 18.66 2000-2002 CESTAT Excise Act 1944 and penalty, as applicable Mumbai 82.82 2003-2004 CESTAT 7.50 2007-2008 CESTAT 0.59 2003-2004 Dy. Commissioner 1.63 2008-2009 Commis sioner Level 19.83 2008-2009 CESTAT Service Tax Act Service Tax including interest 106.61 1997-2001 Dy. and penalty, as applicable j & Commis sioner 2001-2003 941.22 2005-2007 CESTAT 20.30 2007-2009 CESTAT Sales Tax Sales Tax / Central Sales Tax 90.18 2003-2004 Deputy Commissioner of Commercial Tax Appeals 0.30 2003-2004 19.76 2004-2005 Employees State ESI Contribution 1.16 1997-1998 Asst. Director Insurance ESIC Corporation

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

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to the banks.

(xii) In our opinion and according to the explanations given to us, the Company has not granted any loans against security by way of pledge of Shares, Debentures and other Securities. Therefore the provisions of this Clause of the Order are not applicable to the Company.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund /society. Therefore, the provisions of this Clause of the Order are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of this Clause of the Order are not applicable to the Company.

(xv) In our opinion the Company has provided Guarantees for Non-fund based limits taken by the Subsidiary of the Company from a Bank. According to the information and explanations given to us, we are of the opinion that the terms and conditions thereof are not prejudicial to the interest of the Company.

(xvi) According to the information and explanations given to us, the Company did not have any Term Loan outstanding during the year under audit.

(xvii) Based on the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that no funds raised on short-term basis have been used for long- term investment by the Company.

(xviii) The Company has not made any preferential allotment of shares to parties covered in register under Section 301 of the Companies Act, 1956.

(xix) During the period covered by our audit report, the Company has not issued any debentures. Therefore, the provisions of this Clause of the Order are not applicable to the Company.

(xx) We have verified the end use of money raised by Qualified Institutions Placement (QIP) and has been disclosed in the Note No 1 to Notes forming part of accounts.

(xxi) Based on the audit procedures performed and representation obtained from Management, we report that no case of fraud on or by the Company has been noticed or reported for the year under audit.



For TALATI & TALATI Chartered Accountants (FirmReg.No:110758W) (ANANDSHARMA) Place : AHMEDABAD Partner Date : 29th May, 2010 Membership No. 129033

 
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