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Auditor Report of Brigade Enterprises Ltd.

Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of BRIGADE ENTERPRISES LIMITED (''the Company''), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and the Cash Flow 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 management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (''the Act'') read with General Circular 15/2013 dated 13 September 2013 of Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

(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, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with General Circular 15/2013 dated 13 September 2013 of Ministry of Corporate Affairs in respect of Section 133 of the Companies Act 2013;

e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors 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 Report on Other Legal and Regulatory Requirements of the Independent Auditors'' Report to the members of Brigade Enterprises Limited on the accounts for the year ended 31st March, 2014.

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

(b) All the fixed assets have been physically verified by the management during the period and no material discrepancies were noticed on such verification.

(c) During the period, the company has not disposed off any substantial part of its Fixed Assets that would affect the Going Concern assumption of the Company.

(ii) (a) The Inventory has been physically verified at reasonable intervals during the period by the management. In our opinion, the frequency of verification is reasonable.

(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 inventories. The discrepancies noticed on verification between physical stock and book stock was not material and has been properly dealt with in books of account.

(iii) (a) The company has granted loans to 13 parties covered in the register maintained under Section 301 of the Companies Act, 1956 (the Act). The maximum amount outstanding during the year was Rs. 41,031 lakhs and the year end balance of such loans amounted to Rs. 29,655 lakhs. Other than the above, the company has not granted any loans, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions on which the loans have been granted to the bodies corporate listed in the register maintained under Section 301 of the Act are not , prima facie, prejudicial to the interest of the Company.

(c) In the case of the loans granted to the bodies corporate listed in the register maintained under Section 301 of the Act, the borrowers have been regular in the payment of the interest, if any, as stipulated. The terms of arrangement do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 4(iii) (c) of the order is not applicable to the Company in respect of repayment of the principal amount.

(d) There are no overdue amounts of more than Rs. 1 lakh in respect of the loans granted to the bodies corporate listed in the register maintained under Section 301 of the Act.

(e) The company has taken loans from 4 companies covered in the register maintained under section 301 of the Act. The maximum amount outstanding during the year was Rs.1,127 lakhs and the year end balance of such loans amounted to Rs. 54 lakhs. Other than the above, the company has not taken any loans, secured or unsecured, from companies, firms or parties covered in the register maintained under Section 301 of the Act.

(f) In our opinion, the rate of interest and other terms and conditions on which the loans have been taken from bodies corporate listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(g) In the case of the loans taken from the bodies corporate listed in the register maintained under Section 301 of the Act, the company has been regular in the payment of the interest, if any, as stipulated. The terms of arrangement do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 4(iii) (g) of the order is not applicable to the Company in respect of repayment of the principal amount.

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

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of Rs. five lakhs in respect of any party during the period have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, the company has not accepted deposits from public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, are not applicable to the company.

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

(viii) According to the information and explanation given to us, the company has maintained such accounts and records 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.

(ix) (a) According to the information and explanations given to us and the records of the Company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Employee Provident Fund, Employees State Insurance, Income-Tax, Sales-Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues applicable to it except for some delays.

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

(c) According to the information and explanations given to us, the particulars of Income tax, Value Added tax and Service Tax as at 31st March 2014, which have not been deposited on account of a dispute pending are as under:

Name of the Nature of Dues Amount Period to which the Forum where dispute is Statute (T) amount relates pending

Service Tax on Import For the period from April, Customs, Excise, and Service Service Tax 96,99,396/-

of Services 2004 to March, 2006 Tax Appellate Tribunal

Notification Benefit For the period from April, Customs, Excise, and Service Service Tax 15,76,522/- Denial 2006 to March, 2008. Tax Appellate Tribunal

Service Tax on certain For the period from April, Customs, Excise, and Service Service Tax 81,19,457/- Leases 2006 to March, 2008. Tax Appellate Tribunal

The Joint Commissioner of Value Added Tax Works Contract Tax 2,00,49,5827- For the AY 2008-09 Commercial Taxes (Appeals -2) Income Tax Act Disallowance u/s 14A. 1,25,27,272/- Assessment Year 2009-10 Income Tax Appellate Tribunal

Disallowance of Deduction u/s 80-IB Assessment Year 2010-11 Commissioner of Income Tax Income Tax Act 12,70,83,680/- and expenditure u/s and 2011-12 (Appeals) 14A

*net of amounts paid under protest

(x) In our opinion, the company has no accumulated losses and the company has not incurred cash losses during the financial period covered by our audit and the immediately preceding financial period.

(xi) In our opinion, and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(xii) In our opinion, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence, maintenance of records is not applicable.

(xiii) In our opinion, the company is not a chit fund or nidhi mutual benefit fund/society and therefore, the provisions of clause 4(xiii) of the Order are not applicable to the company.

(xiv) According to the information and explanations provided to us, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institution and accordingly provisions of clause 4(xv) of the Order are not applicable to the company.

(xvi) In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the period to parties and companies covered in the Register maintained under Section 301 of the Act and therefore, the provisions of clause 4(xviii) of the Order are not applicable to the company.

(xix) According to the information and explanations given to us, the Company has not issued any debenture and therefore, the provisions of clause 4(xix) of the Order are not applicable to the company.

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

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the period under review.



For Narayanan, Patil and Ramesh

Chartered Accountants Firm Regn No.002395S



L.R. Narayanan

Place: Bangalore Partner

Date: 7th May, 2014 Membership Number: 200/25588


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of BRIGADE ENTERPRISES LIMITED (the Company), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and the Cash Flow 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 management is responsible for the prepa- ration of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 (''the Act''). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assess- ments, the auditor considers the internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presen- tation 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 state- ments give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(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 explana- tions which to the best of our knowledge and belief were necessary for the purpose of our audit;

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

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

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

Annexure referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements of the Independent Auditors'' Report to the members of Brigade Enterprises Limited on the accounts for the year ended 31st March, 2013.

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

(b) All the fixed assets have been physically verified by the management during the period and no material discrepancies were noticed on such verification.

(c) During the period, the company has not disposed off any substantial part of its Fixed Assets that would affect the Going Concern assumption of the Company.

(ii) (a) The Inventory has been physically verified at reasonable intervals during the period by the management. In our opinion, the frequency of verifi- cation is reasonable.

(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 inventories. The discrepancies noticed on verification between physical stock and book stock was not material.

(iii)(a) The company has granted loans to 8 bodies corporate covered in the register maintained under Section 301 of the Companies Act, 1956 (''the Act''). The maximum amount outstanding during the year was Rs 33,632 lakhs and the year end balance of such loans amounted to Rs 33,632 lakhs. Other than the above, the company has not granted any loans, secured or unsecured, to companies, firms or parties covered in the register maintained under Section 301 of the Act.

(b) In our opinion, the rate of interest and other terms and conditions on which the loans have been granted to the bodies corporate listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(c) In the case of the loans granted to the bodies corporate listed in the register maintained under Section 301 of the Act, the borrowers have been regular in the payment of the interest, if any, as stipulated. The terms of arrangement do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 4(iii)(c) of the order is not applicable to the Company in respect of repayment of the principal amount.

(d) There are no overdue amounts of more than Rs 1 lakh in respect of the loans granted to the bodies corporate listed in the register maintained under Section 301 of the Act.

(e) The company has taken loans from a company covered in the register maintained under section 301 of the Act. The maximum amount outstanding during the year was Rs 279 lakhs and the year end balance of such loans amounted to Rs Nil. Other than the above, the company has not taken any loans, secured or unsecured, from companies, firms or parties covered in the register maintained under Section 301 of the Act.

(f) In our opinion, the rate of interest and other terms and conditions on which the loans have been taken from bodies corporate listed in the register maintained under Section 301 of the Act are not, prima facie, prejudicial to the interest of the Company.

(g) In the case of the loans taken from the bodies corporate listed in the register maintained under Section 301 of the Act, the company has been regular in the payment of the interest, if any, as stipulated. The terms of arrangement do not stipulate any repayment schedule and the loans are repayable on demand. Accordingly, paragraph 4(iii)(g) of the order is not applicable to the Company in respect of repayment of the principal amount.

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

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the period have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, the company has not accepted deposits from public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, are not applicable to the company.

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

(viii) According to the information and explanation given to us, the company has maintained such accounts and records 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.

(ix)(a) According to the information and explanations given to us and the records of the Company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Employee Provident Fund, Employees State Insurance, Income-Tax, Sales-Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues applicable to it.

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

(c) According to the information and explanations given to us, the particulars of Income tax, Value Added tax and Service Tax as at 31st March 2013, which have not been deposited on account of a dispute pending are as under:

Name of the Statute Nature of Dues Amount (Rs)

Service Tax Service Tax on Import of Services Rs 18,00,67,470

Value Added Tax Additional turnover proposed Rs 12,06,24,122

Income Tax Act Disallowances u/s 14A Rs 56,15,148

Disallowance of Deduction Income Tax Act u/s 80-IB and expenditure u/s 14A Rs 10,66,73,737

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

Service Tax For the period from Customs, Excise and Service Tax April, 2003 to March, 2010 Appellate Tribunal

Value Added Tax For the Assessment Year April Joint Commissioner of 2005 to March 2011 Commercial Taxes (Appeals)

Income Tax Act Income Tax Assessment Year 2008-09 Appellate Tribunal

Income Tax Act Income Tax Assessment Year 2009-10 Appellate Tribunal

(x) In our opinion, the company has no accumulated losses and the company has not incurred cash losses during the financial period covered by our audit and the immediately preceding financial period.

(xi) In our opinion, and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(xii) In our opinion, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence, maintenance of records is not applicable.

(xiii) In our opinion, the company is not a chit fund or nidhi mutual benefit fund / society and therefore, the provi- sions of clause 4(xiii) of the Order are not applicable to the company.

(xiv) According to the information and explanations provided to us, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institution and accordingly provisions of clause 4(xv) of the Order are not applicable to the company.

(xvi) In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the period to parties and companies covered in the Register maintained under Section 301 of the Act and therefore, the provisions of clause 4(xviii) of the Order are not applicable to the company.

(xix) According to the information and explanations given to us, the Company has not issued any debenture and therefore, the provisions of clause 4(xix) of the Order are not applicable to the company.

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

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the period under review.

for Narayanan, Patil and Ramesh

Chartered Accountants

Firm Regn No. 002395S

L. R. Narayanan

Place: Bangalore Partner

Date: May 07, 2013 Membership No: 200/25588


Mar 31, 2012

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

2. We conducted our audit in accordance with Auditing Standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003, 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 in Paragraph 3 above, we report that:

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

b) In our opinion, proper books of accounts as required by Law have been kept by the Company so far as appears from our examination of such books.

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

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

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the company are disqualified as on 31st March, 2012 from being appointed as Directors of the company under clause (g) of sub section (1) of Section 274 of Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the accounts together with the notes thereon give the information required under the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India:

i) In the case of Balance Sheet, of the state of affairs of the company as at 31st March, 2012.

ii) In the case of Profit and Loss account, of the Profit for the year ended on that date.

iii) 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 the Auditors' Report to the members of Brigade Enterprises Limited on the accounts for the period ended 31st March 2012.

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

(b) All the fixed assets have been physically verified by the management during the period and no material discrepancies were noticed on such verification.

(c) During the period, the company has not disposed off any substantial part of its Fixed Assets that would affect the Going Concern assumption of the Company.

(ii) (a) The Inventory has been physically verified at reasonable intervals during the period by the management. In our opinion, the frequency of verification is reasonable.

(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 inventories. The discrepancies noticed on verification between physical stock and book stock was not material.

(iii) (a) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured from the companies, firms and other parties mentioned in the Register maintained under section 301 of the Companies Act, 1956.

(b) Since the company has neither granted nor taken any loans, the provisions of clause (iii) (b), (iii) (c), (iii) (d), (iii) (e), (iii) (f), (iii) (g), of the Order are not applicable to the company.

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

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakhs in respect of any party during the period have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, the company has not accepted deposits from public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, are not applicable to the company.

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

(viii) According to information and explanation given to us, the company has maintained such accounts and records 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. The company is in the process of getting such accounts and records duly audited by a Cost Accountant.

(ix) (a) According to the information and explanations given to us and the records of the Company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Employee Provident Fund, Employees State Insurance, Income-Tax, Sales-Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess were in arrears, as at 31st March 2012 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, the particulars of Income tax, Value Added tax and Service Tax as at 31st March 2012, which have not been deposited on account of a dispute pending are as under.

Period to which the Forum where

Name of the Statute Nature of Dues Amount (Rs)

amount relates dispute is pending

For the period from Customs, Excise and

Service Tax service tax on Rs 96,99,396 April, 2003 to Service Tax import of Appellate service

March, 2008 Tribunal

For the Asses sment Year Joint Commissi oner of Value Added Tax Additiona1 turn over Rs 10,56,24,122 April 2005 To March 2008 Commerci

al Taxes

Proposed and MarCh 2010 (Appeals)

Disallowances Income Tax

Income Tax Act , Rs 56,15,148 Assessment Year 2008-09

u/s 14A Appellate Tribunal

Disallowances Assessment Year 2008-09

Income Tax Act u/s 80-IB, u/s 14A Rs 11,22,88,885 and

& others Assessment Year 2009-10 Appellate Tribunal

(x) In our opinion, the company has no accumulated losses and the company has not incurred cash losses during the financial period covered by our audit and the immediately preceding financial period.

(xi) In our opinion, and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial institution or bank or debenture holders.

(xii) In our opinion, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence, maintenance of records is not applicable.

(xiii) In our opinion, the company is not a chit fund or nidhi mutual benefit fund / society and therefore, the provisions of clause 4(xiii) of the Order are not applicable to the company.

(xiv) According to the information and explanations provided to us, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institution and accordingly provisions of clause 4(xv) of the Order are not applicable to the company.

(xvi) In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the period to parties and companies covered in the Register maintained under Section 301 of the Act and therefore, the provisions of clause 4(xviii) of the Order are not applicable to the company.

(xix) According to the information and explanations given to us, the Company has not issued any debenture and therefore, the provisions of clause 4(xix) of the Order are not applicable to the company.

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

(xxi) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the period under review.

for Narayanan, Patil and Ramesh

Chartered Accountants Firm Regn

No. 002395S

Patil Udaya Kumar

Place: Bangalore Partner

Date: May 07, 2012 Membership No: 200/25589


Mar 31, 2011

1. We have audited the attached Balance Sheet of BRIGADE ENTERPRISES LIMITED, as at 31st March, 2011 and also the Profit & 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, 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 specifed in paragraphs 4 and 5 of the said order.

4. Further to our comments in the Annexure referred to in Paragraph 3 above, we report that:

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

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as appears from our examination of such books.

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

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

e) On the basis of written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the company are disqualifed as on 31st March, 2011 from being appointed as Directors of the company under clause (g) of sub section (1) of Section 274 of Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, the accounts together with the notes thereon give the information required under the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India:

i) In the case of Balance Sheet, of the state of affairs of the company as at 31st March, 2011.

ii) In the case of Profit and Loss account, of the Profit for the year ended on that date.

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

Annexure to Auditors Report

Annexure referred to in paragraph 3 of the Auditors Report to the members of Brigade Enterprises Limited on the accounts for the period ended 31st March 2011.

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

(b) All the fixed assets have been physically verifed by the management during the period and no material discrepancies were noticed on such verifcation.

(c) During the period, the company has not disposed off any substantial part of its Fixed Assets that would affect the Going Concern assumption of the Company.

(ii) (a) The Inventory has been physically verifed at reasonable intervals during the period by the management. In our opinion, the frequency of verif- cation is reasonable.

(b) The procedures of physical verifcation 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 inventories. The discrepancies noticed on verif- cation between physical stock and book stock was not material.

(iii) (a) According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured from the companies, frms and other parties mentioned in the Register maintained under section 301 of the Companies Act, 1956. (b) Since the company has neither granted nor taken any loans, the provisions of clause (iii) (b), (iii) (c), (iii) (d), (iii) (e), (iii) (f), (iii) (g), of the Order are not applicable to the company.

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

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

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 and exceeding the value of rupees fve lakhs in respect of any party during the period have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

(vi) According to the information and explanations given to us, the company has not accepted deposits from public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA or any other relevant provi- sions of the Act and the rules framed there under, are not applicable to the company.

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

(viii) According to the information and explanations given to us, the Central Government has not prescribed maintenance of cost records and hence the provision of clause 4(viii) is not applicable.

(ix) (a) According to the information and explanations given to us and the records of the Company examined by us, the company is generally regular in depositing with appropriate authorities undisputed statutory dues including Employee Provident Fund, Employees State Insurance, Income-Tax, Sales- Tax, Service Tax, Wealth Tax, Custom Duty, Excise Duty, Cess and any other statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Cess were in arrears, as at 31.03.2011 for a period of more than six months from the date they became payable

(c) According to the information and explanations given to us, the particulars of Income Tax, Value Added Tax and Service Tax as at 31st March 2011, which have not been deposited on account of a dispute pending are as under:

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

Service Tax on For the period from Customs, Excise and Service Tax Import Rs 96,99,396 April, 2003 to Service Tax Appellate of Services March, 2008 Tribunal

Joint Commissioner of Additional turnover For the period April VAT Rs 10,08,26,571 Commercial Taxes proposed 2005 to March 2008 (Appeals)

Disallowance u/s Assessment Year Income Tax Appellate Income Tax Act Rs 56,15,148 14A 2008-09 Tribunal

(x) In our opinion, the company has no accumulated losses and the company has not incurred cash losses during the financial period covered by our audit and the immediately preceding financial period.

(xi) In our opinion, and according to the information and explanations given to us, the company has not defaulted in repayment of dues to a financial insti- tution or bank or debenture holders.

(xii) In our opinion, the company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Hence, maintenance of records is not applicable.

(xiii) In our opinion, the company is not a chit fund or nidhi mutual benefit fund / society and therefore, the provisions of clause 4(xiii) of the Order are not applicable to the company.

(xiv) According to the information and explanations provided to us, the company is not dealing in or trading in shares, securities, debentures and other investments and accordingly, the provisions of clause 4(xiv) of the Order are not applicable to the company.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial insti- tution and accordingly provisions of clause 4(xv) of the Order are not applicable to the company.

(xvi) In our opinion and according to the information and explanations given to us, on an overall basis, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the period to parties and companies covered in the Register maintained under Section 301 of the Act and therefore, the provisions of clause 4(xviii) of the Order are not applicable to the company.

(xix) According to the information and explanations given to us, the Company has not issued any debenture and therefore, the provisions of clause 4(xix) of the Order are not applicable to the company.

(xx) In our opinion, in respect of the monies raised by the company by way of public issue during the year, the management has disclosed the end use of money raised by public issues as a part of Notes to Accounts and the same has been verifed.

(xxi) We have been informed that an erstwhile junior level employee of the Company had embezzled funds amounting to Rs 147.58 Lakhs over a period from April 2007 to June 2009. The Companys internal investigation under the direct supervision of the Companys Audit Committee related to this embezzlement has been completed. We have also been informed that a sum of Rs 43.28 Lakhs has been recovered by this company on this account.

for Narayanan, Patil and Ramesh

Chartered Accountants

Firm Regn No. 002395S

Patil Udaya Kumar

Partner

Membership No: 200/25589

Place: Bangalore

Date: May 04, 2011



 
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