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Auditor Report of Bemco Hydraulics Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Bemco Hydraulics Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the 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 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these 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 there under.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

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, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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 Act, 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:

i. 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.

ii. 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.

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

iv. In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

v. 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 31stMarch, 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

vi. 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 as referred to in Note 2.44 (c) to the financial statements.

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

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to Independent Auditor's Report referred to in Paragraph 1 under the heading of "Report on Other Legal and Regulatory Requirements" of our report of even date.

a. The Company is maintaining proper records showing full particulars including quantitative details and situation of its fixed assets.

b. The fixed assets have been physically verified by the management in a phased manner, over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification.

ii.

a. Physical Verification of inventory has been conducted at regular intervals by the management. In our opinion, the frequency of verification is reasonable.

b. In our opinion and according to the information and explanation 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 is maintaining proper records of inventory. No material discrepancies were noticed on physical verification as compared to book record.

iii. As informed, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 and accordingly Para 3 (iii) of the Order is not applicable.

iv. In our opinion and according to the information & explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business for the purchases of inventory, fixed assets and for 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. On the basis of our examination of books and records of the Company, in our opinion and according to the information and explanations given to us, the company has not accepted deposits during the year and therefore the directives issued by the Reserve bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under are not applicable to the Company.

vi. We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of the records with a view to determine whether they are accurate or complete.

vii. a. The Company is generally regular in depositing undisputed statutory dues including provident fund, employee's state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues as applicable to it with the appropriate authority. There are no undisputed amount payable in respect of applicable statutory dues which were in arrears as at 31.03.2015 for a period of more than six months from the date they became payable.

b. According to the information & explanation give to us, there are no dues of income tax, sales tax, wealth tax, service tax, duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute except as stated below:

Name of the Statute Nature of Amount Period to the Due (Rs,) which the Forum where amount dispute is relates pending

Karnataka Tax on Entry Entry Tax 53,028/- 2006-07 Commercial Tax Officer (Audit & of Goods, 1979 Recovery), Belgaum

Karnataka Tax on Entry Entry Tax 20,066/- 2007-08 Commercial Tax Officer (Audit & of Goods, 1979 Recovery), Belgaum

Karnataka Tax on Entry Entry Tax 24,206/- 2008-09 Commercial Tax Officer (Audit & of Goods, 1979 Recovery), Belgaum

Karnataka Tax on Entry Entry Tax 49,442/- 2009-10 Commercial Tax Officer (Audit & of Goods, 1979 Recovery), Belgaum

c. According to the information & explanation give to us, there is no such amount which is required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under.

viii. The Company has accumulated losses exceeding fifty percent of its net worth as at the end of the financial year. It has not incurred cash losses during the financial year covered by our audit, but has incurred cash losses in the immediately preceding financial year.

ix. Based on our audit procedures and as per the information & explanation given by the management, there has been delays in repayment of dues to working capital bankers aggregating to Rs. 1,73,40,452/- which had been made good during the year. The Company has not issued any debentures. The company has not defaulted in payment of dues to any financial institutions.

x. The Company has not given any guarantee for loan taken by others from banks or financial institutions and accordingly Para 3 (x) of the Order is not applicable.

xi. In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were raised.

xii. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management.

For A.C. Bhuteria &Co

Chartered Accountants

Firm Regn. No. 303105E

Place: Kolkata (Mohit Bhuteria)

2, India Exchange Place 2nd Floor Room No: 10 Kolkata- 700 001 Partner

Phone: 2230 6990, Membership No.056832

E-mail: m_bhuteria@yahoo.co.in

Website: www.acbhuteria.com

Date: 29-05-2015


Mar 31, 2014

We have audited the accompanying financial statements of Bemco Hydraulics 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 give a true and fair view of the financial position and 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 entity''s preparation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

AND

(ii) in the case of the Statement of Profit and Loss, of the loss for the year ended on that date

AND

(iii) in the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date 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 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 subsection (3C) of section 211 of the Companies Act, 1956.

e. on the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 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.

1) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. The fixed assets are physically verified by the management in a phased manner, over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification. There was no substantial disposal of fixed assets during the year.

2) Physical verification of inventory has been conducted at reasonable intervals by the management. In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to book records, which were not material, have been properly dealt with in the books of accounts.

3) a) As informed, the company has not granted any loan, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) The Company has taken unsecured loan from five companies and one party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 9,84,34,925/- and year - end balance of such loan taken was Rs. 6,45,33,376/-.(including interest)

c) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies and parties covered in the Register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

d) The Company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

4) In our opinion and according to the information & explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business, for the purchases of inventory and fixed assets and for sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5)

(a) According to the information and explanations given to us, we are of the opinion 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 & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except in cases where comparison could not be made in the absence of similar transactions with other parties.

6) In our opinion & according to the information & explanations given to us, the Company has not accepted any deposit from public during the year.

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

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Sec. 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of the records with a view to determine whether they are accurate or complete.

9)

(a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income tax, Sales tax, Service tax, Excise duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income tax, Wealth tax, Sales tax, Service Tax, Custom duty, Excise duty and Cesswere in arrears as at 31.03.2014 for a period of more than six months from the date they became payable.

(c) According to the information & explanation give to us, there are no dues of Income tax, Wealth tax, Sales tax, Service Tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute.

10) The Company does not have any accumulated losses. It has incurred cash losses during the financial year covered by our audit. It has not incurred any cash losses in the immediately preceding financial year.

11) Based on our audit procedures and as per the information & explanation given by the management, there has been delays in repayment of dues to working capital bankers aggregating to Rs.3,59,04,130 which had been made good during the year. The status of belated payment as at 31st March, 14 which has since made good is as under:

Period Amount involved

Less than 30 days Rs. 59,15,387/-

12) As informed and explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14) Since the Company is not dealing or trading in shares, securities, debentures and other investment, clause 4(xiv) of the Order is not applicable.

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

16) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were raised.

17) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used to finance long term investments.

18) The Company has made preferential allotment of 2,55,000 Equity Shares to companies covered in the Register maintained under Section 301 of the Companies Act, 1956, based on price determined as per SEBI guidelines. In our opinion, the price at which shares have been issued is not prejudicial to the interest of the company.

19) During the period covered by our audit report, the Company has not issued any debentures.

20) The Company has not raised any money from public issue during the year.

21) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management.

Place : 2, India Exchange Place, For A. C. BHUTERIA & CO. Kolkata - 700 001. CHARTERED ACCOUNTANTS Dated : 28-05-2014 Firm Registration No: 303105E

(MOHIT BHUTERIA) Partner Membership No.: 056832


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Bemco Hydraulics 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 and 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 31 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 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"), 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 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 and the Statement of Profit and Loss dealt with by this Report are in agreement with the books of account;

d. In our opinion, the Balance Sheet and the Statement of Profit and Loss comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956.

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

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956, nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT OF BEMCO HYDRAULICS LIMITED REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE:

1) The Company has maintained proper records showing full particulars, including quantitative details and situation of its fixed assets. The fixed assets are physically verified by the management in a phased manner, over a period of three years, which in our opinion is reasonable having regard to the size of the Company and nature of its business. No material discrepancies were noticed on such verification. There was no substantial disposal of fixed assets during the year.

2) Physical verification of inventory has been conducted at reasonable intervals by the management. In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business. The Company is maintaining proper records of inventory. Discrepancies noticed on physical verification as compared to book records, which were not material, have been properly dealt with in the books of accounts.

3) a) As informed, the company has not granted any loan, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) The Company has taken unsecured loan from five companies and one party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 6,94,26,748/- and year - end balance of such loan taken was Rs. 6,49,40,796/- (including interest)

c) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies and parties covered in the Register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

d) The Company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

4) In our opinion and according to the information & explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business, for the purchases of inventory and fixed assets and for sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

5) (a) According to the information and explanations given to us, 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 & explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of each party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except in cases where comparison could not be made in the absence of similar transactions with other parties..

6) In our opinion & according to the information & explanations given to us, the Company has not accepted any deposit from public during the year.

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

8) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Sec. 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We are, however, not required to make a detailed examination of the records with a view to determine whether they are accurate or complete.

9) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income tax, Sales tax, Service tax, Excise duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amount payable in respect of Income tax, Wealth tax, Sales tax, Service Tax, Custom duty, Excise duty and Cess were in arrears as at 31.03.2013 for a period of more than six months from the date they became payable.

(c) According to the information & explanation give to us, there are no dues of Income tax, Wealth tax, Sales tax, Service Tax, Custom duty, Excise duty or Cess which have not been deposited on account of any dispute except the following:

Name of the Nature of Disputed Statute Dues Amount (Rs.)

Karnataka Value Sales Tax Rs. 70,832/- Added Tax Act, 2003

Karnataka Value Sales Tax Rs. 75,062/- Added Tax Act, 2003

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

Karnataka value Added Tax Act, 2003 2003 - 04 The Honorable High Court of Karnataka

Karnataka value Added Tax Act, 2003 2004 - 05 The Honorable High Court of Karnataka

10) The Company does not have any accumulated losses. It has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11) Based on our audit procedures and as per the information & explanation given by the management, the Company has not defaulted in repayment of dues to financial Institution or Banks except for the following:

Lender''s Name Description Period of Default Amount involved of loan

State Bank of India Cash Credit Unpaid / Less than 30 Rs. 85,58,098/- days as at 31.03.2013 Bank of Maharashtra Cash Credit Less than 30 days Rs. 1,00,943/-

Bank of Maharashtra Cash Credit More than 30 days but Rs.1,38,85,988/- less than 90 days

Bank of Maharashtra Cash Credit Unpaid / Less than 30 Rs. 23,84,470/- days as at 31.03.2013

Bank of Maharashtra Cash Credit Unpaid / more than 30 Rs. 59,60,211/- days but less than 90 days as at 31.03.2013

12) As informed and explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

14) Since the Company is not dealing or trading in shares, securities, debentures and other investment, clause (xiv) of the Order is not applicable.

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

16) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were raised.

17) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short term basis have been used to finance long term investments.

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

19) During the period covered by our audit report, the Company has not issued any debentures.

20) The Company has not raised any money from public issue during the year.

21) During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of any such case by the management.

For A.C.BHUTERIA & CO.

Chartered Accountants

Place : 2, India Exchange Place Firm Registration No. 303105E

Kolkata - 700 001 (MOHIT BHUTERIA)

Place: Kolkata Partner Dated: 28.05.2013 Membership no. 56832


Mar 31, 2012

1. We have audited the attached Balance Sheet of BEMCO HYDRAULICS LTD as at 31st March, 2012 and also the annexed Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. 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 (as amended) issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of books and records we considered necessary and according to the information and explanations given to us, we give below our comments on the matters specified in paragraph 4 & 5 of the said Order as far as applicable:

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of its Fixed Assets. The Fixed Assets have been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable. Discrepancies were noticed on such verification as compared to book records, which were not material, have been adequately dealt with in the books of accounts. There was no substantial disposal of fixed assets during the year.

ii. a) The management has conducted physical verification of inventory at reasonable intervals during the year.

b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of inventory. Discrepancies between book balance and physical records, which were not material, have been adequately dealt with in the books of accounts.

iii. a) As informed, the company has not granted any loan, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956

b) The Company has taken unsecured loan from five companies covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.64, 127, 286 and year - end balance of such loan taken was Rs. 24, 624, 391.

c) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies and parties covered in the Register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

d) The Company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

iv. In our opinion and according to the information & explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business, for the purchases of inventory and fixed assets and for 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. a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lacs in respect of any party during the year have been made at prices, which are reasonable, having regard to the prevailing market prices at the relevant time.

vi. In our opinion & according to the information & explanations given to us, the Company has not accepted any deposit from public during the year.

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

viii. We are informed that maintenance of cost records has not been prescribed by the Central Government under Sec 209(l)(d) of the Companies Act, 1956.

ix. a) The Company is regular in depositing undisputed statutory dues with appropriate authorities. There were no undisputed statutory dues as at the last day of the financial year outstanding for a period of more than six months from the date they became payable.

b) As informed, there are no disputed dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty or cess as at the year-end except the dues as given below:

Nature of Nature Amount Period Forum where dispute is Statute of dues (Rs) pending

Karnataka Value Sales Tax 17,17,545/- 2007-08 Joint Commissioner of Added Tax Act, (incl. interest & penalty) Commercial Taxes,2003 Belgaum Division, Belgaum Karnataka Value Sales Tax 70,832/- 2003-04 High Court, Karnataka Added Tax Act, 2003 Karnataka Value Sales Tax 75,062/- 2004-05 High Court, Karnataka Added Tax Act, 2003

x. The Company does not have accumulated losses at the end of the financial year. It has not incurred cash losses in the current financial year and in the immediately preceding financial year.

xi.

(a) As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution/ banks except for the following

Period Amount(Rs)

Less than 30 days 3,718,499/-

More than 30 days upto 60 days 5,281,883/-

(b) The Company has not issued any debentures.

xii. As informed and explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. In respect of Investment in Shares, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares are held in the name of the company or in demat form.

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

xvi. In our opinion, the Term Loan were applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used to finance long-term investments.

xviii. The Company has made any preferential allotment of 300,000 preference shares to a company covered in the register maintained under section 301 of the Companies Act, 1956 during the year. In our opinion, the prices at which the preference shares have been allotted are not prima facie prejudicial to the interests of the Company.

xix. During the period covered by our audit report, the Company has not issued any debentures.

xx. The Company has not raised any money from public issue during the year.

xxi. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

Further to above-

4. 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.

5. 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 the books.

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

7. In our opinion, the Profit and Loss Account, Balance Sheet and Cash Flow Statement, comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

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

9. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with 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 2012;

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.

For A.C.BHUTERIA & CO.

Chartered Accountants

Firm Registration No. 303105E

(MOHIT BHUTERIA)

Place: Kolkata Partner

Dated: 28.05.2012 Membership no. 56832


Mar 31, 2011

1. We have audited the attached Balance Sheet of BEMCO HYDRAULICS LTD as at 31st March, 2011 and also the annexed Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date. 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 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 (as amended) issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of books and records we considered necessary and according to the information and explanations given to us, we give below our comments on the matters specified in paragraph 4 & 5 of the said Order as far as applicable:

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of its Fixed Assets. The Fixed Assets have been physically verified by the Management during the year. In our opinion, the frequency of verification is reasonable. Discrepancies were noticed on such verification as compared to book records, which were not material, have been adequately dealt with in the books of accounts. There was no substantial disposal of fixed assets during the year.

ii.

a) The management has conducted physical verification of inventory at reasonable intervals during the year.

b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of inventory. Discrepancies between book balance and physical records, which were not material, have been adequately dealt with in the books of accounts.

iii.

a) As informed, the company has not granted any loan, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956

b) The Company has taken unsecured loan from five companies and three parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.452.99 Lacs and year - end balance of such loan taken was Rs 387.10 Lacs.

c) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies and parties covered in the Register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

d) The Company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

iv. In our opinion and according to the information & explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business, for the purchases of inventory and fixed assets and for 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.

a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lacs in respect of any party during the year have been made at prices, which are reasonable, having regard to the prevailing market prices at the relevant time.

vi. In our opinion & according to the information & explanations given to us, the Company has not accepted any deposit from public during the year.

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

viii. We are informed that maintenance of cost records has not been prescribed by the Central Government under Sec 209(1)(d) of the Companies Act, 1956.

ix.

a) The Company is regular in depositing undisputed statutory dues with appropriate authorities. There were no undisputed statutory dues as at the last day of the financial year outstanding for a period of more than six months from the date they became payable.

b) As informed, there are no disputed dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty or cess as at the year-end except the dues as given below:

Nature of Statute Nature of Amount dues (Rs)

Karnataka Value Sales Tax 17,17,545/- Added Tax Act, (incl. interest 2003 & penalty)

Karnataka Value Sales Tax 70,832/- Added Tax Act, 2003

Karnataka Value Sales Tax 75,062/- Added Tax Act, 2003

Nature of Statute Period Forum where dispute is pending

Karnataka Value 2007-08 Joint Commissioner of Added Tax Act, Commercial Taxes, 2003 Belgaum Division, Belgaum

Karnataka Value 2003-04 High Court, Karnataka Added Tax Act, 2003

Karnataka Value 2004-05 High Court, Karnataka Added Tax Act, 2003

x. The Company does not have accumulated losses at the end of the financial year. It has not incurred cash losses in the current financial year and in the immediately preceding financial year.

xi. As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution, banks or to debenture holders.

xii. As informed and explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. In respect of Investment in Shares, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares are held in the name of the company or in demat form.

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

xvi. In our opinion, the Term Loan were applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used to finance long-term investments.

xviii. The Company has not made any preferential allotment of shares to companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

xix. During the period covered by our audit report, the Company has not issued any debentures.

xx. The Company has not raised any money from public issue during the year.

xxi. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

Further to above-

4. 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.

5. 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 the books.

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

7. In our opinion, the Profit and Loss Account, Balance Sheet and Cash Flow Statement, comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

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

9. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with accounting principles generally accepted in India:

a. In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011;

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

AND

c. In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

For A.C. BHUTERIA & CO. Chartered Accountants Firm Registration No. 303105E

(Arihant Kumar Baid) Partner Membership no. 65014

Place : Kolkata Dated : 27.05.2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of BEMCO HYDRAULICS LTD as at 31st March 2010 and also the annexed Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date. 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 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 (as amended) issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks of books and records we considered necessary and according to the information and explanations given to us, we give below our comments on the matters specified in paragraph 4 & 5 of the said Order as far as applicable:

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of its Fixed Assets. The Fixed Assets have been physically verified by the Management during the year. No material discrepancies were noticed on such verification. There was no substantial disposal of fixed assets during the year.

ii.

a) The management has conducted physical verification of inventory at reasonable intervals during the year.

b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

c) The Company is maintaining proper records of inventory. Discrepancies between book balance and physical records, which were not material, have been adequately dealt with in the books of accounts,

iii.

a) As informed, the company has not granted any loan, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 301 of the Companies Act, 1956

b) The Company has taken loan from five companies and three parties covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 266.81 Lacs and year - end balance of such loan taken was Rs 176.97 Lacs.

c) In our opinion, the rate of interest and other terms and conditions on which loan has been taken from companies and parties covered in the Register maintained under Section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the Company.

d) The Company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

iv. In our opinion and according to the information & explanation given to us, there is an adequate internal control system commensurate with the size of the Company & nature of its business, for the purchases of inventory and fixed assets and for 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. (a) According to the information and explanations given to us, we are of the opinion that the transactions that need to be entered into a register in pursuance of Section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion and according to the information & explanations given to us, the transactions made in pursuance of such contracts or arrangements have been made at prices, which are reasonable, having regard to the prevailing market prices at the relevant time.

vi. In our opinion & according to the information & explanations given to us, the Company has not accepted any deposit from public during the year.

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

viii. We are informed that maintenance of cost records has not been prescribed by the Central Government under Sec 209(l)(d) of the Companies Act, 1956.

ix. The Company is regular in depositing undisputed statutory dues with appropriate authorities. There were no undisputed statutory dues as at the last day of the financial year outstanding for a period of more than six months from the date they became payable. As informed, there are no disputed dues of sales tax, income tax, customs duty, wealth tax, service tax, excise duty or cess as at the year-end.

x. The Company does not have accumulated losses at the end of the financial year. It has not incurred cash losses in the current financial year and in the immediately preceding financial year.

xi. As per books and records maintained by the Company and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institution, banks or to debenture holders.

xii. As informed and explained to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

xiv. In respect of Investment in Shares, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares are held in the name of the company or in demat form.

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

xvi. In our opinion, the Term Loan were applied for the purpose for which they were raised.

xvii. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used to finance long-term investments.

xviii. The Company has not made any preferential allotment of shares to companies, firms or parties covered in the register maintained under section 301 of the Companies Act, 1956 during the year.

xix. During the period covered by our audit report, the Company has not issued any debentures.

xx. The Company has not raised any money from public issue during the year.

xxi. During the course of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

Further to above-

4. 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.

5. 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 the books.

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

7. In our opinion, the Profit and Loss Account, Balance Sheet and Cash Flow Statement, comply with the applicable Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

8. 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.

9. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with significant accounting policies and notes thereon, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with 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 2010;

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

AND

c. In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

For A.C.BHUTERIA & CO

Chartered Accountants

Place: Kolkata

Dated: 26.05.2010 (Arihant Kumar Baid)

Partner

Membership no. 65014

Firm Registration No. 303105E

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