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Auditor Report of Blue Star Ltd.

Mar 31, 2023

To The Members of Blue Star Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Blue Star Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

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 Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2023, and its profit, total comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified

under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor''s Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

Sr. No.

Key Audit Matter

Auditor''s Response

Accounting for Fixed Price Contracts:

Estimate of cost is a critical estimate to determine revenues from fixed price contracts and liability for onerous obligations. This estimate has an inherent uncertainty as it requires measurement of the progress of contracts, which is based on cost till date and total cost required to complete the contract performance obligations. (Refer note 15, 23, 27 and 49)

Principal audit procedures performed:

i. Assessed the appropriateness of the accounting policy for recognizing revenue on fixed price contracts with the requirements of Ind AS 115.

ii. Evaluated the design and implementation of internal controls over recording of actual cost till date and estimation of total cost required to complete the performance obligations.

iii. Tested the operating effectiveness of the said internal controls for a selected sample of contracts.

iv. Verified the measurement of the actual cost till date and the total estimated cost for completion of performance obligations for a selected sample of contracts.

v. Performed substantive tests on a sample of contracts to identify, if any, significant variations in actual costs till date and total costs required to complete the performance obligations and verified whether the revenue was recognised based on such costs after considering the effects of variations, if any, in the total costs required to complete the performance obligations.

vi. Identified onerous contracts to record a provision for expected costs to be incurred till completion of the contract.

Sr. No.

Key Audit Matter

Auditor''s Response

Assessment of the carrying value of trade receivables and contract assets:

The appropriate valuation of certain trade receivables and contract assets is dependent on a number of factors such as age, credit worthiness and ability of counterparties to make payment. (Refer Note 12 and 15)

Principal audit procedures performed:

i. Evaluated the design and implementation of internal controls over the review of valuation of trade receivables and contract assets.

ii. Tested the operating effectiveness of the said internal controls for selected samples.

iii. Scrutinised a sample of receivable accounts to confirm management''s assessment about recoverability of the receivables, having regards to credit worthiness of the counterparties to make payment based on passage of time and/ or information available with management.

iv. Verified subsequent receipts for selected samples, post balance sheet date.

v. Verified the management''s estimates for provision of expected credit loss in terms of Ind AS 109 on Financial Instruments.

Information Other than the Financial Statements and Auditor''s Report Thereon

â¢ The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Integrated Report, Board''s Report, Management Discussion and Analysis, Business Responsibility Report, Corporate Governance Report and the Dynamics of Blue Star''s Growth (hereinafter referred to as "other information"), but does not include the consolidated financial statements, standalone financial statements and our auditor''s report thereon.

â¢ Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

â¢ In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

â¢ If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of 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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibility for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

â¢ Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

â¢ Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor''s report. However, future events or conditions may cause the Company to cease to continue as a going concern.

â¢ Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

â¢ Obtain sufficient appropriate audit evidence regarding the financial information of the Company to express an opinion on the standalone financial statements.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including

any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor''s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our

audit 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flows and Statement of Changes in Equity dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls with reference to standalone financial statements.

g) With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended, in our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 standalone financial statements - Refer Note 38 to the standalone 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 24 to the standalone financial statements;

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

iv. (a) The Management has represented that, to the

best of it''s knowledge and belief, as disclosed in the note 9 to the financial statements, no funds (which are material either individually or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The Management has represented, that, to the best of it''s knowledge and belief, as disclosed in the note 19 to the financial statements, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.

As stated in note 18 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended March 31,2023.

2. As required by the Companies (Auditor''s Report) Order, 2020 ("the Order") issued by the Central Government in terms of Section 143(11) of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order.

For Deloitte Haskins and Sells LLP Chartered Accountants (Firm''s Registration No. 1 17366W/W-100018)

Ketan Vora

Partner

(Membership No. 100459) (UDIN: 23100459BGXJHC4912)

Mar 31, 2022

Opinion

We have audited the accompanying standalone financial statements of Blue Star Limited ("the Company"), which comprise the Standalone Balance Sheet as at March 31, 2022, and the Standalone Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

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 Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31,2022, and its profit, total comprehensive income, its changes in equity and the cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing specified

under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditor''s Responsibility for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI''s Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Key Audit Matters

Sr.

No.

Key Audit Matter

Auditor''s Response

Accounting for Fixed Price Contracts:

(Refer note 15, 23, 27 and 48)

Principal audit procedures performed:

i. assessed the appropriateness of the accounting policy for recognizing revenue on fixed price contracts with the requirements of Ind AS 115.

ii. evaluated the design and implementation of internal controls over recording of actual cost till date and estimation of total cost required to complete the performance obligations.

iii. tested the operating effectiveness of the said internal controls for a selected sample of contracts.

iv. verified the measurement of the actual cost till date and the total estimated cost for completion of performance obligations for a selected sample of contracts.

v. performed substantive tests on a sample of contracts to identify, if any, significant variations in actual costs till date and total costs required to complete the performance obligations and verified whether the revenue was recognised based on such costs after considering the effects of variations, if any, in the total costs required to complete the performance obligations.

vi. identified onerous contracts to record a provision for expected costs to be incurred till completion of the contract.

Sr.

No.

Key Audit Matter

Auditor''s Response

Assessment of the carrying value of trade receivables and contract assets:

The appropriate valuation of certain trade receivables and contract assets is dependent on a number of factors such as age, credit worthiness and ability of counterparties to make payment.

(Refer Note 12 and 15)

Principal audit procedures performed:

i. evaluated the design and implementation of internal controls over the review of valuation of trade receivables and contract assets.

ii. tested the operating effectiveness of the said internal controls for selected samples.

iii. scrutinised a sample of receivable accounts to confirm management''s assessment about recoverability of the receivables, having regards to credit worthiness of the counterparties to make payment based on passage of time and/ or information available with management.

iv. verified subsequent receipts for selected samples, post balance sheet date.

v. verified the management''s estimates for provision of expected credit loss in terms of Ind AS 109 on Financial Instruments.

Information Other than the Financial Statements and Auditor''s Report Thereon

The Company''s Board of Directors is responsible for the other information. The other information comprises the information included in the Integrated Report, Board''s Report, Management Discussion and Analysis, Business Responsibility Report and the Dynamics of Blue Star''s Growth (hereinafter referred to as "other information"), but does not include the consolidated financial statements, standalone financial statements and our auditor''s report thereon.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

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 Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the Ind AS and other accounting principles generally accepted in India. 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 standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company''s financial reporting process.

Auditor''s Responsibility for the Audit of the Standalone Financial Statements

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

â¢ Obtain an understanding of internal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls.

â¢ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management.

â¢ Obtain sufficient appropriate audit evidence regarding the financial information of the Company to express an opinion on the standalone financial statements.

We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act, based on our

audit 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 Standalone Balance Sheet, the Standalone Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account.

d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2022 from being appointed as a director in terms of Section 164(2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company''s internal financial controls over financial reporting.

g. With respect to the other matters to be included in the Auditor''s Report in accordance with the requirements of section 197(16) of the Act, as amended,

In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.

h. With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 standalone 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;

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

iv. (a) The Management has represented that,

to the best of it''s knowledge and belief, as disclosed in the Note 9 to the financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other person or entity identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(b) The Management has represented, that, to the best of it''s knowledge and belief, as disclosed in the Note 19 to financial statements, no funds have been received by the Company from any person or entity, including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, directly or indirectly, lend or invest in other person or entity identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.

(c) Based on the audit procedures that has been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above, contain any material misstatement.

v. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.

As stated in note 18 to the financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.

Mar 31, 2018

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Blue Star Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31,2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Managementâs Responsibility for the Standalone Ind AS Financial Statements

The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditorâs Responsibility

Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 disclosures in the financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS financial statements that give a true and fair view 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 the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS 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 March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 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 it appears from our examination of those books;

(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone lnd AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report; and

(g) With respect to the other matters to be included in the Auditorâs 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 standalone lnd AS financial statements - Refer Note 35 to the standalone lnd AS 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. Further, the Company does not have any long term derivative contracts. Refer Note 18 to the standalone lnd AS financial statements;

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

ANNEXURE 1 TO THE INDEPENDENT AUDITORâS REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF BLUE STAR LIMITED

Annexure referred to in paragraph 1 under the heading âReport on other legal and Regulatory Requirementâ of our report of even date

Re: Blue Star Limited (âthe Companyâ)

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

(b) All fixed assets have not been physically verified by the management during the year but 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) According to the information and explanations given by the management, the title deeds of immovable properties included in fixed assets are held in the name of the Company.

ii. The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on physical verification.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

iv. In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.

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

vi. 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, related to the manufacture or service of air conditioning and refrigeration products, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

vii. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, goods and service tax, 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 provident fund, employeesâ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, goods and service tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues outstanding of income-tax, sales- tax, service tax, duty of custom, duty of excise and value added tax on account of any dispute, are as follows:

Name of Statute	Nature of dues	Amount (Rs. in Crores)*	Period to which the amount relates	Forum where dispute is pending
	Disallowance for deduction u/s 80IA/80IB/80IC/80HHC	7.58	AY 1998-99, AY 2000-01, AY 2002-03 to A Y 2004-05, AY 2006-07, AY 2007-08	CIT (A)/ITAT/High Court
Income Tax Act, 1961	Disallowance of software expenses as revenue expenses	1.28	AY 2007-08	ITAT
Income Tax Act, 1961	Disallowance on advertisement on brand building considered as revenue expense	1.27	AY 2006-07	ITAT
	Reduction of claim u/s 10A	3.68	AY 2005-06 and AY 2006-07	ITAT
	Short deduction of Tax at Source on payment to subcontractors	1.67	AY 2008-09 and AY 2009-10	CIT (A)
	Other disallowances	0.08	AY 2007-08	ITAT
	Input credit denied due to failure of dealer to file return	0.03	FY 2011-12	Dy. Comm. of Commercial Taxes (Audit)
	Demand due to excess tax payable as computed by assessing officer against that paid by the Company	48.99	FY 1990-91, FY 2001-02, FY 2001-02 to FY 2008-09, FY 2010-11 to FY 2014-15	Asst. Comm./ Dy. Comm./Jt. Comm. Of Sales Tax, CESTAT, High Court and Supreme Court
Local Sales Tax,	Demand imposed on account of AMC margin difference	1.44	FY 2011-12	Jt. Comm./Asst. Comm. CT-III-Enforcement
VAT Act and Central Sales Tax Act	Demand for Entry Tax payable	8.30	FY 2001-02, FY 2002-03, FY 2008, FY 2014-15 FY 2015-16	CTO, Addl. Comm., Asst. Comm.
	Denial of Input Tax Credit and disallowance due to non-submission of forms	96.29	FY 1992-93, FY 2000-01 to 2004-05, FY 2006-07 to FY 2014-15	Asst. Comm./Dy. Comm./ Jt. Comm. Of Sales Tax, CESTAT, High Court and Supreme Court
	Disallowance made for stock transfer	0.30	FY 2011-12	Appellate Authority
	Inter-state sale wrongly assessed as local sale	1.26	FY 2002-03 to FY 2003-04	Rajasthan Tax Board
	Demand due short payment of service tax as alleged by the assessing officer	209.63	FY 2003-04 to FY 2007-08, FY 2010-11 to FY 2013-14	CESTAT, Commissioner (Appeals)
	Demand due to excess tax payable as computed by assessing officer against that paid by the Company	0.08	FY 2003-04	CESTAT
Service Tax under Finance Act, 1994	Demand of service tax on commission received from abroad	8.37	FY 2006 -07 to FY 2009-10, FY 2011-12 to FY 2012-13	Asst. Comm./Dy. Comm./Jt. Comm. Of Sales Tax, CESTAT, High Court and Supreme Court
	Denial of CENVAT credit availed on some services	13.74	FY 2005-06 to FY 2013-14	Comm (Appeals), CCE(A), Tribunal, CESTAT, Superintendent, Commissioner of Service Tax
	Denial of exemption on services provided	0.04	FY 2007-08 to 2008-09	Commissioner (Appeals)
	Reversal of CENVAT credit on trading activity	9.17	FY 2005-06 to FY 2013-14	CCE (A), CESTAT
	Demand due to excess tax payable as computed by assessing officer against that paid by the Company	2.48	FY 1986-87 to FY 1990-91, FY 2008-09	CEC, Supreme Court, High Court, AC
Customs Act, 1962 and Central Excise Act, 1944	Demand for excise duty payable as alleged by assessing officer	1.13	FY 2008-09	CESTAT
Customs Act, 1962 and Central Excise Act, 1944	Denial of CENVAT credit	5.85	FY 1990-1991 to FY 1995-96, FY 2006-07 to FY 2015-16	CESTAT, Commissioner Appeals, Asst Commissioner, Commissionerate, Superintendent
	Denial of exemption available	0.07	FY 2009-10	CESTAT
	Rejection of Refund/CENVAT Credit claimed by the Company	0.82	FY 2011-12, FY 2012-13	Comm (Appeals) Chennai Customs, CESTAT

*net of advances

viii. In our opinion and according to the information and based on explanations provided to us the Company has not defaulted in repayment of dues to a financial institution, bank, or debenture holders. The Company has not taken any loan or borrowing from the government.

ix. According to the information and explanations given by the management, the Company has not raised any money by way of initial public offer/further public offer/debt instruments and term loans hence, reporting under clause (ix) is not applicable to the Company and hence not commented upon.

x. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the company or no material fraud on the company by the officers and employees of the Company has been noticed or reported during the year.

xi. According to the information and explanations given by the management, the managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.

xii. In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3 (xii) of the order are not applicable to the Company and hence not commented upon.

xiii. According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3 (xiv) are not applicable to the Company and, not commented upon.

xv. According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.

xvi. According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number : 324982E/E300003

per Ravi Bansal

Partner

Membership Number : 49365

Date : May 14, 2018

Place of Signature : Mumbai

Mar 31, 2017

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Blue Star Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of 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 standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act., read with Rule 7 of the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standards) Rules, 2015, as amended. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone Ind AS 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 of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 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 standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view 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 the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS 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 March 31, 2017, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s report) Order, 2016 ("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 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 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 it appears from our examination of those books;

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 Companies (Indian Accounting Standards) Rules, 2015, as amended;

(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act;

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

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements - Refer Note 36 (a) to the standalone Ind AS financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company; and

iv. The Company has provided requisite disclosures in Note 47 to these standalone Ind AS financial statements as to the holding of Specified Bank Notes on November 8, 2016 and December 30, 2016 as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.

ANNEXURE 1 TO THE INDEPENDENT AUDITOR''S REPORT OF EVEN DATE ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF BLUE STAR LIMITED

Annexure referred to in paragraph 1 under the heading "Report on other legal and Regulatory Requirement" of our report of even date

Re: Blue Star Limited (''the Company")

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

(c) According to the information and explanations given by the management, the title deeds of immovable properties included in fixed assets are held in the name of the Company.

ii. The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on physical verification.

iii. According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.

vii. (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, customs duty, excise duty, value added tax, 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 provident fund, employees'' state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, excise duty, value added tax on account of any dispute, are as follows:

Name of Statute	Nature of dues	Amount Rs. Lacs	Period to which the amount relates	Forum where dispute is pending
Income Act, 1961	Disallowance for deduction Tax u/s 80IA/80IB/80IC/80HHC	955	AY 1998-99, AY 2000-01 to AY 2007-08	CIT (A)/ITAT/High Court
	Disallowance of software expenses as revenue expenses	128	AY 2007-08	ITAT
	Disallowance on advertisement on brand building considered as revenue expense	127	AY 2006-07	ITAT
	Disallowance u/s 14A	1	AY 2007-08	ITAT
	Reduction of claim u/s 10A	368	AY 2005-06 and AY 2006-07	ITAT
	Short deduction of Tax at Source on payment to subcontractors	166	AY 2008-09 and AY 2009-10	CIT (A)
	Other disallowances	8	AY 2007-08	ITAT
Local Sales Tax, VAT Act and Central Sales Tax Act	Demand due to difference in AMC tax computation	144	FY 2011-12	Asst. Comm./Jt. Comm.
	Demand due to excess tax payable as computed by assessing officer against that paid by the Company	6,809	FY 1990-91, FY 1995-96 to FY 2010-11 and FY 2013-14 to FY 2014-15	Asst. Comm./Jt. Comm. / CESTAT/High Court
	Denial of ITC and disallowance due to non submission of forms	4,228	FY 1992-93, FY 2000-01, FY 2001-02 to FY 2006-07 to FY 2013-14	Asst. Comm./Jt. Comm./ CESTAT/High Court
	Disallowance made for stock transfer	121	FY 2004-05 and FY 2011-12	Dy. Comm./Asst. Comm.
Service Tax under Finance Act, 1994	Demand due short payment of service tax as alleged by the assessing officer	20,963	FY 2003-04 to FY 2013 -14	CEC (Appeals)/CESTAT
	Demand due to excess tax payable as computed by assessing officer against that paid by the Company	8	FY 2003-04	High Court
	Demand of service tax on commission received from abroad	837	FY 2005-06 to FY 2009-10	CEC (Appeals)/ CESTAT/High Court
	Denial of CENVAT credit availed on some services	78	FY 2005-06 to FY 2012-13	CEC (Appeals)/CESTAT
	Denial of exemption on services provided	9	FY 2007-08 to FY 2008-09	CEC (Appeals)
	Reversal of CENVAT credit on trading activity	91 1	FY 2004-05 to FY 2011-12	CEC (Appeals)/CESTAT
Customs Act, 1962 and Central Excise Act, 1944	Demand due to excess tax payable as computed by assessing officer against that paid by the Company	248	FY 1996-97 to FY 1990-91	CEC (Appeals)/High Court/ Supreme Court
	Demand for excise duty payable as alleged by assessing officer	144	FY 1998-99 to FY 2003-04 and FY 2008-09	CESTAT
	Denial of CENVAT credit on some services	237	FY 1994-95 to FY 1995-96 and FY 2006-07 to FY 2014-15	CEC (Appeals)/CESTAT
	Denial of exemption available	24	FY 2009-10	CESTAT
	Rejection of Refund/CENVAT Credit claimed by the Company	48	FY 2011-12 and FY 2012-13	CEC (Appeals)
	Rejection of Refund of Duty claimed by the Company	7	FY 2009-10	CESTAT
	Other miscellaneous issues	28	FY 2008-09 and FY 2015-16	CESTAT

net of advances

x. We have been informed by the management of the Company that it detected through its whistle blower mechanism, certain instances of fraud for which investigations have been completed, involving certain employees of the Company colluding with vendors to receive undue benefits, resulting in a loss to the Company of ''2.70 Crores which was subsequently recovered.

xii. In our opinion, the Company is not a nidhi Company. Therefore, the provisions of clause 3 (xii) of the order are not applicable to the Company and hence not commented upon.

xv. According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him.

xvi. According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration Number: 324982E/E300003

per Ravi Bansal

Partner

Membership Number: 49365

Place of signature: Mumbai

Date: May 09, 2017

Mar 31, 2015

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

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 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 ofthe Act for safeguarding ofthe 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which 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, issued by the Institute of Chartered Accountants of India, as 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 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. An audit also includes evaluating the appropriateness of 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 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 March 31,2015, its profit/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 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.

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 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 it appears from our examination of those books.

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

(d) In our opinion, the 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 written representations received from the directors as on March 31,2015, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31,2015, 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:

a.i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 37 to the financial statements;

a.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. Further,the company does not have any long term derivative contracts.Refer Note 5 to the financial statements; a.iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure referred to in paragraph 1 under the heading "Report on other legal and Regulatory Requirement" of our report of even date - Re: Blue Star Limited (''the Company'')

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

(b) All fixed assets have not been physically verified by the management during the year but 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) (a) The management has conducted physical verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loans that are re-payable on demand, to companies covered in the register maintained under section 189 of

the Companies Act, 2013. There has been no default on the part of the parties to whom the money has been lent. The payment of interest has been regular.

(b) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us and having regard to the explanation that purchases of certain items in project business is made on the basis of customer preference, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

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

(vi) To the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148 (1) of the Companies Act, 2013, for the products/services of the Company.

(vii) (a) 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, service tax, customs duty, excise duty, value added tax, 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 provident fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(b) According to the records of the Company, the dues outstanding of income-tax, sales-tax, service tax, excise duty, value added tax on account of any dispute, are as follows:

Name Nature of dues Amount of Statute Rs Lakhs

Disallowance of Section 80IA/80IB 926.67 deduction for non-allocation of Expenses

Income Advertisement on Brand Building 127.15 Tax Ac1, 1961 considered as capital expenditure

Short deduction of TDS on Payment to 166.49 Subcontractors

Service tax demand on Composite 64.17 Contracts

Disallowance of Cenvat Credit to the 381.27 extent of 80%

Reversal of Cenvat credit on input 305.63

SeryicecTax services used for providing taxable Under infuance service as well as exempted services Act, 1994

Wrong availment of Cenvat Credit/ 175.38 service tax paid

Disallowance of input tax credit on 29.76 common service

Disallowance of claim of CRA under 735.84 Export of Services

Rejection of credit note 158.61

Demand notice received from Assessing 4,136.36 authority treating works contract sales as product sales

Local Sales Tax Factory Direct Sale treated as Local 107.82 Act,VATAct and branch sales

Central Sales Non Submission of Forms 4037.07 Tax Act

Disallowance of set off u/s 41D & 90.43 interest liability

Input credit disallowed 1,530.68

Sales tax demand on assessment 1,993.00

Entry Tax On Factory direct sales 79.33

10% Demand of Excise Duty on Finished 56.00 Goods, raised for not maintaining separate books of accounts for dispatches to SEZ Developers

Excise Duty on Insulated panels which is 11.53 considered as walk in coolers and claimed as concessional duty

Central Excise Act, 1944 Excise Duty on Electric fans 2.77 manufactured and captively use in manufacture of water cooler

Excise Duty on whole unit including 10.00 Cabinet which is considered as walk in coolers and claimed as exemption

Exemption granted to Power projects 7.11 under Notification 6/2006 rejected

Name of the Statue Period to which Forum where the amount relatess dispute is pending

Income tax Act 1961 AY 1998-99, 2000-01 to ITAT/High Court 2005- 06,2006-07 to 2007-08

2006- 07 ITAT/High Court

2008- 09 to 2009-10 CIT Appeals

2003- 2009 CESTAT

2004- 2005 to 2009-2010 CESTAT/Commissioner Appeals

Service Tax under 2009- 2010; 2010-2011 CESTAT finance Act 1994 2003-2004; 2006-2012 CESTAT

2005- 2006 to 2009-2010 CESTAT

2003-2010 CESTAT/Commissioner Appeals

2009-10 Joint Commissioner Appeals

2001- 02 to 2008-09 Supreme Court

Local Sales tax Act 2002- 2003; 2003-2004 Deputy Commissioner VAT ACT and (Appeals) centrol sales tax act

2003- 04 to 2011-12 Deputy Commissioner (Appeals)/ITAT

2004- 2005 Deputy Commissioner (Appeals)

2005- 2006 Deputy Commissioner

1994-95; 2003-04 to 2011-12 Deputy Commissioner (Appeals)/ITAT

Entry tax 2001-2002; 2004-2005; Asst. Commissioner 2009-12 (Appeals)

2008- 2009 CESTAT Mumbai 1986-1990 Central Excise commissioner

centrol Excise Act 1944 1980- 1982 CESTAT

1981- 1986 Supreme Court

2009- 10 CESTAT

According to the information and explanations given to us, there are no dues of wealth tax, customs duty and cess which have not been deposited on account of any dispute.

(c) According to the information and explanations given to us, the amount required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder has been transferred to such fund within time.

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

(ix) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank. The Company has not issued any debentures.

(x) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from banks and financial institutions, the terms and conditions whereof, in our opinion, are not prima-facie prejudicial to the interest of the Company.

(xi) The Company did not have any term loans outstanding during the year.

(xii) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S R B C & CO LLP Chartered Accountants ICAI Firm Registration Number: 324982E

per Sudhir Soni Partner Membership Number: 41870

Place of Signature: Mumbai Date: May 29, 2015

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of Blue Star Limited ("the Company"), which comprise the Balance Sheet as at March 31, 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, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956 read with General Circular 8/2014 dated 4 April 2014, issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

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

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

(b) in the case of the Statement of Profit and Loss, of the 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, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with General Circular 8/2014 dated 4 April 2014, issued by the Ministry of Corporate Affairs;

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

Annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date

Re: Blue Star Limited (''the Company'')

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

(b) All fixed assets have not been physically verified by the management during the year but 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) There was no disposal of a substantial part of fixed assets during the year.

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

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loans to two Companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.1,959 lakhs and the year-end balance of loans granted to such parties was Nil.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for loans given are not prima facie prejudicial to the interest of the Company. According to the information and explanations given to us, and having regard to management''s representation that the loans are given to wholly-owned subsidiary of the Company in the interest of the Company''s business, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the interest of the Company.

(c) In respect of loans granted, repayment of the principal amount is as stipulated and payment of interest has been regular.

(d) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) According to information and explanations given to us, 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. Accordingly, the provisions of clause 4(iii) (e) to (g) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the company in respect of these areas. (v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 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 such contracts or arrangements exceeding value of Rupees Five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time. (vi) The Company has not accepted any deposits from the public.

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the company and nature of its business. (viii) 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 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 have not, however, made a detailed examination of the same. (ix) (a) 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, customs duty, excise duty, cess and other material statutory dues applicable to it. (b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees'' state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

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

Name Nature of dues Amount Period to which of Statute (Rs. Lakhs*) the amount relates

Disallowance of Section 80IA/80IB 690.25 AY 1998-99, 2000-01 Income deduction for non allocation of Expenses to 2005-06 Tax Act, 1961 Disallowance of Section 80IB 595.83 AY 2010-2011 deduction for non allocation of Corporate Expenses, Disallowance of depreciation on intangible assets

Service tax demand on Composite 55.00 2003-2004 to 2006-2007 Contracts

Disallowance of Cenvat Credit to 381.27 2004-2005 to 2009-2010 the extent of 80%

Wrong availment of Cenvat 175.38 2003-2004;

Service Tax Credit/Service tax paid 2006-2012 under Finance Act, 1994 Reversal of Cenvat credit on input 305.63 2009-2010 services used for providing taxable service as well as exempted services

Disallowance of input tax credit 29.76 2005-2006 to 2009-2010 on common service

Disallowance of claim of CRA under 10.63 2006-2007 Export of Services

Additional demand/ disallowances 13.71 1994-95: 2002-2003; on work contracts 2003-2004

Demand notice received from 4,136.36 2001-02 to 2008-09 Assessing authority treating works contract sales as product sales

Factory Direct Sale treated as 107.82 2002-2003; 2003-2004 Local Sales Tax Act and Local branch sales Central Sales Non Submission of Forms 1,178.23 1992-93; 1997-98; Tax Act 2000-2001; 2005-2006 to 2010-2011

Disallowance of set off u/s 41D & 98.82 2002-2003; 2004-2005 interest liability

Sales tax demand on assessment 1,424.80 1990-91, 2002-2003, 2004-2005 to 2005-06, 2009-10, 2010-11

Entry Tax On Factory direct sales 7.33 2001-2002; 2004-2005

10% Demand of Excise Duty on 56.00 2008-2009 Finished Goods, raised for not maintaining separate books of accounts for dispatches to SEZ Developers

Excise Duty on Insulated panels which 11.53 1986-1990 is considered as walk in coolers and Central Excise claimed as concessional duty Act, 1944 Excise Duty on Electric fans 2.77 1980-1982 manufactured and captively use in manufacture of water cooler

Excise Duty on whole unit including 10.00 1981-1986 Cabinet which is considered as walk in coolers and claimed as exemption

Exemption granted to Power projects 7.11 2009-10 under Notification 6/2006 rejected

Name of Statue Forum where dispute is pending

Income Tax Act, 1961 ITAT/High Court

Deputy Commissioner of Income Tax

Service TAx under Finance Act, 1994 CESTAT

CESTAT/Commissioner Appeals

CESTAT

CESTAT

CESTAT

Commissioner Appeals

Local Sales Tax Ac, VAT Act and Central Sales Tax Act Appellate Tribunal; High Court, Addl/Appellate Commissioner/ Appellate Asst. Commissioner

Supreme Court

Deputy Commissioner (Appeals)

Deputy/Asst. Commissioner (Appeals)

Deputy Commissioner (Appeals)

Deputy/Asst. Commissioner (Appeals)

Entry Tax Asst. Commissioner (Appeals)

Central Excise Act, 1944 CESTAT Mumbai

Central Excise Commissioner

CESTAT

Supreme Court

CESTAT

* net of advances

According to the information and explanations given to us, there are no dues of wealth tax, customs duty and cess which have not been deposited on account of any dispute.

(x) The Company has no accumulated losses at the end of the financial year. The Company has not incurred cash losses in the current year and in the financial year immediately preceding the financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institution or bank. The Company has not issued any debentures.

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

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

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

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(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 for long-term investment.

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

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

(xx) The Company has not raised any money through public issue during the year. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor''s Report) Order, 2003 (as amended) are not applicable to the Company.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S. R. Batliboi & Associates LLP

Chartered Accountants

ICAI Firm registration number: 101049W

per Sudhir Soni

Partner

Membership No.: 41870

Place of Signature: Mumbai

Date: May 30, 2014

Mar 31, 2012

1. We have audited the attached Balance Sheet of Blue Star Limited ('the Company') as at March 31, 2012 and also the Statement of Profit and Loss and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. 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 (Auditor's 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, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Without qualifying our report, we draw attention to note 26 to the financial statements regarding managerial remuneration amounting to Rs594.47 lacs paid / provided during the year of which Rs402.56 lacs is in excess of the limits prescribed under Schedule XIII of the Companies Act, 1956. As represented to us, the Company has filed an application with the Central government for approval of such excess remuneration.

5. 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 purposes of our audit;

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

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

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

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

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

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2012;

b) in the case of the statement of profit and loss, of the loss for the year ended on that date; and

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

Annexure referred to in paragraph 3 of our report of even date

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

(b) All fixed assets have not been physically verified by the management during the year but 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) There was no disposal of a substantial part of fixed assets during the year.

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

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loans to two Companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs2,317.79 lacs and the year-end balance of loans granted to such parties was Rs659.00 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for loan given to one Company is not prima facie prejudicial to the interest of the Company. Further, the Company has made interest-free loans to wholly-owned subsidiary. According to the information and explanations given to us, and having regard to management's representation that the interest free loans are given to wholly- owned subsidiary of the Company in the interest of the Company's business, the rate of interest and other terms and conditions for such loans were not prima facie prejudicial to the interest of the Company.

(c) The loans granted are re-payable on demand. We are informed that the company has not demanded repayment of any such loans during the year, and thus, there has been no default on the part of the parties to whom the money has been lent. The payment of interest from one Company has been regular. The loans given to wholly-owned subsidiary were interest free.

(d) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) According to information and explanations given to us, 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. Accordingly, the provisions of clause 4(iii) (e) to (g) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company and hence not commented upon.

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

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

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

(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 books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, related to the manufacture of certain products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there have been significant delays in few cases in deposit of tax deducted at source.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees' state insurance, income-tax, wealth-tax, service tax, sales- tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

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

Name Nature of the dues Amount of statute (Rs in Lacs*)

Income Disallowance of Section 80IB 1,152.52 Tax Act,1961 deduction for non allocation of Corporate Expenses, Disallowance of depreciation on intangible assets acquired from NEPL & others

Service Tax Service tax demand on Composite under Finance Contracts 55.00 Act, 1994 Disallowance of Cenvat Credit to the extent of 80% 328.43

Additional demand/disallowances 121.48 on work contracts

Demand notice received from 2,326.82 Assessing authority treating works contract sales as product sales Factory Direct Sale 147.10 treated as Local branch sales Local Sales Tax Non Submission of Forms 429.99 Act, VAT Act and Central Sales Tax Act

Disallowance of set off u/s 41D & 98.82 interest liabiity Sales tax demand on assessment 634.77

Show cause notice received from 1,024.54

CTO, Hyderabad treating works contract sales as product sales

Entry Tax On Factory direct sales 2.59

Central Excise 10% Demand of Excise Duty on 56.00 Act, 1944 Finished Goods, raised for not

maintaining separate books of accounts for dispatches to SEZ Developers

Excise Duty on Insulated panels 11.53 which is considered as walk in coolers and claimed as concessional duty

Excise Duty on Electric fans 2.77

manufactured and captively used in manufacture of water cooler

Excise Duty on whole unit including 10.00 Cabinet which is considered as walk in coolers and claimed as exemption

Exemption granted to Power projects 7.11 under Notification 6/2006 rejected Non submission of proof of export 16.56 during EA 2000 Audit

Non submission of proof of 1.28 re-warehousing under certificates obtained from customers

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

Income AY 2008-2009 Commissioner of Income Tax Act,1961 tax (A)

Service Tax 2003-2004 to CESTAT under Finance 2006-2007

Act,1994 2004-2005 to CESTAT / Commissioner 2009-2010 Appeals

1994-95: 2002- 2003; Sales Tax

2003-2004; 2007-2008 Appellate Tribunal; High Court

2001-2002 to 2002-2003; Supreme Court

2005-2006 to 2008-2009

2002-2003; Deputy

2003-2004 Commissioner (Appeals)

Local Sales Tax 1992-93; 2000-2001; Deputy / Asst.

Act,VAT Act and 2003-2004; 2005-2006; Commissioner

Central Sales 2006-2007; 2007-2008 (Appeals)

Tax Act 2002-2003; 2004-2005 Deputy Commissioner (Appeals)

1990-91, Deputy / Asst. Commissioner

2002-2003 to 2005-2006 (Appeals)

2003-2004; High Court

2004-2005

Entry tax 2001-2002; 2004-2005 Asst. Commissioner

Central Excise 2008-2009 CESTAT Mumbai Act,1944 1986-1990 Central Excise Commissioner

1980-1982 CESTAT

1981-1986 Supreme Court

2009-10 CESTAT 2008-09 CESTAT 2008-09 CESTAT

According to the information and explanations given to us, there are no dues of wealth tax, customs duty and cess which have not been deposited on account of any dispute.

(x) The Company has no accumulated losses at the end of the financial year. The Company has incurred cash losses in the current year but has not incurred cash losses in immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank. The Company has not issued any debentures.

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

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

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

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(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 for long-term investment.

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

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

(xx) The Company has not raised any money through public issue during the year. Accordingly, the provisions of clause 4(xx) of the Companies (Auditor's Report) Order, 2003 (as amended) are not applicable to the Company.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S. R. Batliboi & Associates

Firm registration number: 101049W

Chartered Accountants

per Sudhir Soni

Partner

Mumbai, May 16, 2012 Membership No. 41870

Mar 31, 2011

1. We have audited the attached Balance Sheet of Blue Star Limited (the Company) as at March 31, 2011 and also 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 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, 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 purposes of our audit;

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

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

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

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

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

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 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 cash flow statement, of the cash flows for the year ended on that date.

Annexure referred to in paragraph 3 of our report of even date (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but 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) There was no disposal of a substantial part of fixed assets during the year.

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

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

(c) The Company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) (a) The Company has granted loans to two Companies covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 2,146.57 lacs and the year-end balance of loans granted to such parties was Rs. 679.00 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for loan given to one Company is not prima facie prejudicial to the interest of the Company. Further, the Company has made interest-free loans to wholly-owned subsidiary. According to the information and explanations given to us, and having regard to managements representation that the interest free loans are given to wholly- owned subsidiary of the Company in the interest of the Companys business, the rate of interest and other terms and conditions for such loans were not prima facie prejudicial to the interest of the Company.

(c) The loans granted are re-payable on demand. We are informed that the company has not demanded repayment of any such loans during the year, and thus, there has been no default on the part of the parties to whom the money has been lent.The payment of interest from one Company has been regular.The loans given to wholly-owned subsidiary were interest free.

(d) There is no overdue amount of loans granted to companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956.

(e) According to information and explanations given to us, 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. Accordingly, the provisions of clause 4(iii) (e) to (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company and hence not commented upon.

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

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

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

(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 books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1) (d) of the Companies Act, 1956, related to the manufacture of certain products, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) The Company is generally 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, customs duty, excise duty, cess and other material statutory dues applicable to it. Further, since the Central Government has till date not prescribed the amount of cess payable under section 441 A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the company in depositing the same.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

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

Name Nature of the dues Amount of Statute (Rs in Lacs*)

Income Tax Disallowance of Section 203.63 Act, 1961 80IB deduction for non allocation of Corporate Expenses & Others

Service Tax Service Tax demand on 55.00 under Finance Composite Contacts Act, 1994 Disallowance of Cenvat 328.43 Credit to the extent of 80%

Local Sales Additional demand/disallowances 121.48 Tax Act, VAT on works contracts Act and Demand notice received from 2,326.82 Central Sales Assessing authority treating works Tax Act contract sales as product sales

Factory Direct Sale treated 147.10 as Local branch sales

Non Submission of Forms 353.73 Disallowance of set off u/s 41D 98.82 & interest liability

Sales tax demand on assessment 634.77

Show cause notice received 1,024.54 from CTO, Hyderabad treating works contract sales as product sales

Entry Tax On Factory direct sales 2.59 Central Excise 10% Demand of Excise Duty 56.00 Act, 1944 on Finished Goods, raised for not maintaining separate books of accounts for dispatches to SEZ Developers

Excise Duty on Insulated 11.53 panels which is considered as walk in coolers and claimed as concessional duty

Excise Duty on Electric fans 2.77 manufactured and captively use in manufacture of water cooler

Excise Duty on whole unit 10.00 including Cabinet which is considered as walk in coolers and claimed as exemption

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

Income Tax Act, 1961 AY 2005-2006 Commissioner of Income tax(A)

Service Tax under Finance Act, 1994 2003-2004 to CESTAT 2006-2007

2004-2005 to CESTAT/Commissioner 2009-2010 Appeals

Local Sales Tax Act, VAT 2002-2003, Sales Tax Appellate Tribunal, 2003-2004, 2007-2008 High Court

Act and Central Sales Tax Act 2001-2002 to 2002-2003 Supreme Court 2005-2006 to 2008-2009

2002-2003, 2003-2004 Deputy Commissioner (Appeals)

1992-93, 2000-2001, Deputy/Asst. 2003-2004, 2005-2006, Commissioner (Appeals) 2006-2007

2002-2003, 2004-2005 Deputy Commissioner (Appeals)

1990-91, 2002-2003, Deputy/Asst. to 2005-2006 Commissioner (Appeals)

2003-04,2004-2005 High Court

Entry Tax 2001-2002 to 2004-2005 Asst. Commissioner

Central Excise Act, 1944 2008-2009 CESTAT Mumbai

1986-1990 Central Excise Commissioner

1980-1982 CESTAT

1981-1986 Supreme Court

* net of advances

According to the information and explanation given to us, there are no dues of wealth tax, customs duty and cess which have not been deposited on account of any dispute.

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution or bank.The Company has not issued any debentures.

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

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

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof in our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) Based on information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(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 for long-term investment.

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

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

(xx) The Company has not raised any money through public issue during the year. Accordingly, the provisions of clause 4(xx) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.

For S. R. Batliboi & Associates

Firm registration number: 101049W Chartered Accountants

per Sudhir Soni Partner Membership No. 41870

Mumbai, May 24, 2011

Mar 31, 2010

1. We have audited the attached Balance Sheet of Blue Star Limited (the Company" as at March 31,2010 and also 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 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, 20O3 (as a mended J 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 purposes of our audit

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

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

with the books of account;

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

v. On the basis of the written representations received from the directors, as on March 31, 2010, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31,2010 from being appointed as a director In terms of clause (g) of sub-section (1} of section 274 of the Companies Act 1956.

vL 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 March 31, 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 esse of cash flow statement of the cash flows for the year ended on that date.

Referred to in paragraph 3 ofovr report of even date,

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

(b) Fixed assets have been physically verified by the management during the year and no material discrepancies were Identified on such verification,

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

(c) The Company Is maintaining proper records of inventory and no material discrepancies were noticed on physical verification carried out at the end of the year.

(til) (a) The Company has granted loan to one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 824.5B lacs (inclusive of interest of Rs. 120.58 lacs) and the year-end balance of loan granted was Rs. 799.58 lacs (inclusive of interest of fts. 130.58 lacs).

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not prima facie prejudicial to the Interest of the Company.

(c) The loans granted are re-payable on demand and payment of interest has been regular.

(d) There is no overdue amount more than rupees one lakh of Joans granted to companies, firms or other parties listed In the register maintained under section 301 of the Companies Act, 1956.

(e) As informed, the Company has not taken any Joans, secured or unsecured from companies, ffrms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4{rii} ff) and (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(Jv) In OUT opinion and according to the Information and explanations given to us, there Is an adequate Internal control system commensurate with the slie of the Company and the nature of Its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

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

(vl) The Company has not accepted any deposits from the 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 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 209(1 J(d} of the Companies Act, 1956 in respect of certain products manufactured by the Company, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees state insurance, Income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income tax, sales tax, service tax, excise duty on account of dispute are as follows:

According to the Information and explanation given to us, there are no dues of customs duty and cess which have not been deposited on account of any dispute.

(x) The Company has no accumulated fosses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks.The Company has not taken any (oan from financial institutions. The Company has not issued any debentures.

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

(xiii) in our opinion, the Company is not a chic fund or a nidhi / mutual benefit fund, society.Therefore, the provisions of clause 4{xiii) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the Information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other Investments have been held by the Company, in its own name and same has been sold during the year.

(xv) According to the information and explanations given to us, the Company has given guarantee for loans taken by others from bank or financial institutions, the terms and conditions whereof In our opinion are not prima-facie prejudicial to the interest of the Company.

(xvi) The Company did not have any term loans outstanding during the year.

(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 for long-term investment.

(xvlli)The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company did not have any outstanding debentures during the year,

(xx) The Company has not raised any money through public issue during the year. Consequently, the provisions of clause 4 (xx) of the Companies (Auditors Report} Order, 2003 (as amended) are not applicable to the Company.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit

For &. Co. Batliboi & Associates Firm registration number: 10149W Chartered Accountants Per Sudhir Soni Partnar Mumbaf, 12, May 2010 Membership No. 41S70

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