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Auditor Report of Coromandel Engineering Company Ltd.

Mar 31, 2015

Report on the Financial Statements

We have audited the accompanying financial statements of Coromandel Engineering Company Limited ("the Company") which comprise the Balance Sheet as at 31st March 2015, the statement of Profit and Loss, 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 financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

e. On the basis of written representations received from the directors, as on 31st March, 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2015, from being appointed as a director in terms of Section 164(2) of the Act.

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

(i) The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note No. 27 to the financial statements.

(ii) The company has made provision as required under any law or accounting standards for material foreseeable losses, if any, on long term contracts.

(iii) There has been no delay in transferring amounts, required to be transferred, to the investor education and protection fund by the company.

ANNEXURE TO THE AUDITOR'S REPORT OF EVEN DATE TO THE MEMBERS OF COROMANDEL ENGINEERING COMPANY LIMITED

(i) (a) The Company has maintained proper

records showing full particulars, including quantitative details and situation of its fixed assets.

(b) According to the information given to us, major portion of fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. Certain discrepancies which were noticed on such verification were rectified and the same has been properly dealt in the books.

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

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

(c) In our opinion, the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, during the year the Company has not granted or taken any loans to or from companies, firms or other parties covered 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, 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 sale of goods and services. During the course of our audit, no major weakness in internal control has been noticed.

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

(vi) The Central Government has vide notification dated 3rd June 2011 prescribed maintenance of cost records by various classes of companies. We have broadly reviewed books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of the cost records under Section 148 of the Companies Act, 2013 and are of the opinion, prima facie, the prescribed accounts and records have been made and maintained.

(vii) (a) According to the records, information and

explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues in respect of provident fund, employees' state insurance dues, income- tax, wealth-tax, sales-tax, service tax, cess and other statutory dues applicable to it and no undisputed amounts payable were outstanding as on 31st March, 2015 for a period of more than six months from the date they become payable.

(b) According to the information and explanation given to us, the following are the details of disputed Sales Tax dues with the authorities concerned.

(Rs. in lakhs)

NAME OF THE FORUM WHERE DISPUTE IS DISPUTED STATUTORY PENDING AMOUNT DUES

Andhra The Appellate Deputy 43.32 Pradesh VAT Commissioner (CT) 2006-07 & 2007-08 (Rs.20.49 lakhs deposited)

(c) According to the records, 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, 2013 and rules made thereunder has been transferred to such fund within the time as prescribed.

(viii) The company has made a profit after tax amounting to Rs. 112.41 lakhs during the current financial year and the accumulated losses at the end of the financial year is Rs. 2141.87 Lakhs. The company has not incurred any cash losses during the current financial year and had incurred a cash loss of Rs. 1020.17 lakhs in the immediately preceding financial year.

(ix) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to Banks or financial institutions.

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

(xi) In our opinion and according the information and explanations given by the management, the term loans were applied for the purpose for which they were obtained.

(xii) According to the information and explanations given to us by the management and based on audit procedures performed, no fraud on or by the company has been noticed or reported during the course of our audit.

For SUNDARAM & SRINIVASAN Chartered Accountants Regn.No.004207S

M. PADHMANABHAN Place: Chennai Partner Date: 28.04.2015 Membership No.F13291


Mar 31, 2014

We have audited the accompanying financial statements of Coromandel Engineering Company Limited which comprises of the Balance Sheet as at 31st March 2014, the statement of profit and Loss and Cash fow statement for the year then ended and a summary of significant accountng policies and other explanatory informaton.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparaton of the financial statements that give a true and fair view of the financial positon, financial performance and cash flows of the company in accordance with the Accountng Standards referred to in sub secton (3c) of secton 211 of Companies Act 1956 ("the Act") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Afairs in respect of secton 133 of the Companies Act, 2013. This responsibility includes the design, implementaton and maintenance of internal control relevant to the preparaton and presentaton of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the standards on Auditng issued by the Insttute 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 misstatements.

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 judgement, including the assessment of the risk 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 preparaton and fair presentaton of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluatng the appropriateness of accountng policies used and the reasonableness of the accountng estmates made by management, as well as evaluatng the overall presentaton of the financial statements.

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

Opinion

In our opinion and to the best of our informaton and according to the explanatons given to us, the financial statements give the informaton required by the Act in the manner so required and give a true and fair view in conformity with the accountng policies generally accepted in India:

a) in the case of Balance sheet, of the state of afairs of the company as at March 31, 2014;

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 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 issued by the Central Government of India in terms of sub-secton (4A) of secton 227 of the Act, we give in the Annexure a statement on the maters specified in paragraphs 4 and 5 of the order.

2. As required by secton 227(3) of the Act, we report that :

a. We have obtained all the informaton and explanatons, 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 examinaton of those books;

c. the Balance Sheet, Statement of profit & 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 & Loss and Cash Flow Statement comply with the Accountng Standards referred to in subsecton (3C) of Secton 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Afairs in respect of secton 133 of the Companies Act, 2013.

e. On the basis of writen representatons received from the directors, as on 31st March, 2014 and taken on record by the Board of Directors, none of the directors is disqualifed as on 31st March, 2014, from being appointed as a director in terms of clause (g) of sub-secton (1) of Secton 274 of

ANNEXURE REFERRED TO IN PARA 1 OF THE AUDITORS'' REPORT OF EVEN DATE TO THE MEMBERS OF COROMANDEL ENGINEERING COMPANY LIMITED

(i) (a) The Company has maintained proper records showing full partculars, including quanttatve details and situaton of its fixed assets.

(b) According to the informaton given to us, major porton of fixed assets have been physically verifed by the management during the year. In our opinion, the frequency of verifcaton of fixed assets by the management is reasonable having regard to the size of the Company and the nature of its assets. Certain discrepancies which were notced on such verifcaton were rectfed and the same has been properly dealt in the books.

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

(ii) (a) The inventory has been physically verifed by the management at reasonable intervals. In our opinion, the frequency of verifcaton is reasonable.

(b) In our opinion and according to the informaton and explanaton given to us, the procedure for physical verifcaton of inventory followed by the management were reasonable and adequate in relaton to the size of the Company and the nature of its business.

(c) In our opinion, the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) According to the informaton and explanatons given to us, during the year the Company has not granted or taken any loans to or from companies, firms or other partes covered in the register maintained under Secton 301 of the Companies Act, 1956.

(iv) In our opinion and according to the informaton and explanatons 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 sale of goods. During the course of our audit, no major weakness in internal control has been notced.

(v) In our opinion and according to the informaton and explanaton given to us, there were no transactons during the year that were required to be entered in the register maintained under secton 301 .

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

(vii) The Company has a system of internal audit which, in our opinion, is commensurate with its size and nature of business.

(viii) The Central Government has vide notfcaton dated 3rd June 2011 prescribed maintenance of cost records by various classes of companies. We have broadly reviewed books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of the cost records under Secton 209 (1) (d) of the companies Act 1956 and are of the opinion, prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) According to the records, informaton and explanatons given to us, the Company is generally regular in depositng with appropriate authorites undisputed statutory dues in respect of provident fund, employees'' state insurance dues, Investor Educaton and Protecton fund, income-tax, wealth-tax, sales-tax, service tax, excise duty, cess and other statutory dues applicable to

it and no undisputed amounts payable were outstanding as on 31st March, 2014 for a period of more than six months from the date they become payable. (b) According to the informaton and explanaton given to us, the following are the details of disputed Income Tax and Sales Tax dues with the concerned authorites.

NAME OF THE FORUM WHERE DISPUTE IS DISPUTED STATUTORY PENDING AMOUNT DUES

Andhra The Appellate Deputy 43.32 Pradesh VAT Commissioner (CT) 2006-07 & 2007-08 (Rs. 20.49 lakhs deposited)

Income tax Commissioner of Appeals 64.46

TNVAT – Entry Before the Joint Commissioner 2.99 Tax of Sales Tax, Vellore (entire amount is deposited)

Utarkhand Dy. Commissioner – II, 25.00 VAT Haridwar, Uttarakhand

(x) The company incurred a loss of Rs. 888.17 lakhs during the current financial year and the accumulated losses at the end of the financial year is Rs. 2,212.61 lakhs. The company has incurred cash losses before tax of Rs. 664.86 lakhs during the current financial year. The company has incurred a loss of Rs. 544.05 lakhs in the immediately preceding financial year.

(xi) In our opinion and according to the informaton and explanatons given by the management, the Company has not defaulted in repayment of dues to Banks.

(xii) According to the informaton and explanatons given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securites.

(xiii) The Company is not a chit/nidhi/mutual benefit fund/society and hence clause xiii of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securites, debentures and other investments and hence clause xiv of the order is not applicable.

(xv) According to the informaton and explanatons given to us, the Company has not given any guarantee for loans taken by others from bank or financial insttutons.

(xvi) In our opinion and according the informaton and explanatons given by the management, the term loans were applied for the purpose for which they were obtained.

(xvii)According to the informaton and explanaton given to us and on an overall examinaton of the Balance Sheet, in our opinion, the Company has utlized the funds raised on Long- term basis (Rights Issue) towards repayment of long-term loans, redempton of preference shares and working capital purpose.

(xviii)During the year, the Company has not made any preferental allotment of shares to partes and companies covered in the register maintained under Secton 301 of the Act.

(xix) The Company has not issued any debentures.

(xx) The Company has raised money by way of Rights issue during the year to the extent of Rs. 5987.76 lakhs (Gross) and the end use of the money as disclosed by the management has been verifed.

(xxi) According to the informaton and explanatons given to us by the management and based on audit procedures performed, no fraud on or by the company has been notced or reported during the course of our audit.

For SUNDARAM & SRINIVASAN

Chartered Accountants Regn.No.004207S

M. PADHMANABHAN Place: Chennai Partner

Date: April 29, 2014 Membership No.F13291


Mar 31, 2012

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

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.

1. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report)(Amendment) Order, 2004 issued by the Central Government of India in terms of subsection (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.

2. Further to our comments in the annexure referred to 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 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 appears from our examination of those books.

c) The Balance Sheet, Profit & Loss Statement 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 & Loss Statement and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in subsection (3C) of Section 211 of the Companies Act, 1956.

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

f) 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.

i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2012;

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

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

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

(b) According to the information given to us, major portion of fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management 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 inventory has been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion, the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, during the year, the Company has not granted or taken any loans to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(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 sale of goods. During the course of our audit, no major weakness in internal control has been noticed.

(v) In our opinion and according to the information and explanation given to us, there were no transactions during the year that were required to be entered in the register maintained under section 301 .

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

(vii) The Company has a system of internal audit which, in our opinion, is commensurate with its size and nature of business.

(viii)The Central Government has vide notification dated 3rd June 2011 prescribed maintenance of cost records by various classes of companies. We have broadly reviewed books of accounts maintained by the company pursuant to the rules made by the Central Government for the maintenance of the cost records under Section 209 (1) (d) of the companies Act 1956 and are of the opinion, prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) According to the records, information and explanations given to us, the Company is generally regular in depositing with appropriate authorities, undisputed statutory dues in respect of provident fund, employees' state insurance dues, Investor Education and Protection fund, income- tax, wealth-tax, sales-tax, service tax, excise duty, cess and other statutory dues applicable to it and no undisputed amounts payable were outstanding as on 31st March, 2012 for a period of more than six months from the date they become payable.

(b) According to the information and explanation given to us, the following are the details of disputed Excise Duty and Sales Tax dues that have not been deposited with the concerned authorities.

NAME OF THE FORUM WHERE UNPAID STATUTORY DISPUTE IS AMOUNT DUES PENDING (Rs.in lacs)

Excise Duty Central Excise 22.84 and Service Tax Appellate Tribunal

Andhra The Appellate 22.83 Pradesh VAT Deputy Commissioner (CT)

Income tax Commissioner of 342.79 Appeals

(x) The company incurred a loss of Rs 2145.22 lacs during the current financial year and the accumulated losses at the end of the financial year is Rs 780.39 lacs (previous year - Nil). The company has incurred cash losses before tax of Rs 3088.12 lacs during the current financial year. The company has not incurred any losses in the immediately preceding financial year. The networth of the company at the end of the financial year is at Rs. 2269.92 lacs.

(xi) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to Banks.

(xii) According to the information and explanations given 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) The Company is not a chit/nidhi/mutual benefit fund/society and hence clause xiii of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments and hence clause xiv of the order is not applicable.

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

(xvi) In our opinion and according the information and explanations given by the management, the term loans were applied for the purpose for which they were obtained.

(xvii)According to the information and explanation given to us and on an overall examination of the Balance Sheet, in our opinion, the Company has not used any funds raised on short-term basis towards long-term investment.

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

(xix) The Company has not issued any debentures.

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

(xxi) According to the information and explanations given to us by the management and based on audit procedures performed, no fraud on or by the company has been noticed or reported during the course of our audit.

For SUNDARAM & SRINIVASAN

Chartered Accountants

Regn.No.004207S

M PADHMANABHAN

Place: Chennai Partner

Date: April 26, 2012 Membership No.F13291


Mar 31, 2011

We have audited the attached Balance Sheet of Coromandel Engineering Co Ltd as at 31st March, 2011 and the Profit & Loss Account for the year ended on that date annexed thereto and Cash Flow Statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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.

1. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of subsection (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.

2. Further to our comments in the annexure referred to 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 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 appears from our examination of those books.

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

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

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

f) 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:

i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31sMarch,2011;

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

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

ANNEXURE REFERRED TO IN PARA 1 OF THE AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF COROMANDEL ENGINEERING COMPANY LIMITED

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

(b) According to the information given to us, major portion of fixed assets have been physically verified by the management during the year. In our opinion, the frequency of verification of fixed assets by the management 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) No major part of fixed assets have been disposed off during the year.

(ii) (a) The inventory have been physically verified by the management at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

(c) In our opinion the Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(hi) According to the information and explanations given to us, during the year the Company has not granted or taken any loans to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(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 sale of goods. During the course of our audit, no major weakness in internal control has been noticed.

(v) (a) In our opinion and according to the information and explanation given to us, the particulars of contracts or arrangements that need to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered

(b) Where each such transaction is in excess of Rs.5 lacs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

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

(vii) The Company has a system of internal audit which, in our opinion, is commensurate with its size and nature of business.

(viii) The Central Government has not prescribed maintenance of cost records by the company under Section 209 (1) (d) of the Companies Act 1956.

(ix) (a) According to the records, information and explanations given to us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues in respect of provident fund, employees state insurance dues, Investor Education and Protection fund, income-tax, wealth-tax, sales-tax, service tax, excise duty, cess and other statutory dues applicable to it and no undisputed amounts payable were outstanding as on 31st March, 2011 for a period of more than six months from the date they become payable.

(b) According to the information and explanation given to us the following are the details of disputed Excise Duty and Sales Tax dues that have not been deposited with the concerned authorities.

Name Of The Forum Where Dispute Unpaid

Statutory Dues Is Pending Amount

(Rs.in Lacs)

Excise Duty Central Excise And Service Tax 22.84 Appellate Tribunal

Andhra Pradesh VAT Sales Tax Appellate Tribunal, Andhra Pradesh 22.83

Income Tax Commissioner of Appeals 132.38



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

(xi) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of dues to Banks.

(xii) According to the information and explanations given 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) The Company is not a chit/ nidhi/ mutual benefit fund/society and hence clause xiii of the Order is not applicable.

(xiv) The Company is not dealing or trading in shares, securities, debentures and other investments and hence clause xiv of the order is not applicable.

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

(xvi) In our opinion and according to the information and explanations given by the management the term loans were applied for the purpose for which they were obtained.

(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet, in our opinion, the Company has not used any funds raised on short-term basis towards long-term investment.

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

(xix) The Company has not issued any debentures.

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

(xxi) According to the information and explanations given to us by the management and based on audit procedures performed no fraud on or by the company has been noticed or reported during the course of our audit.

For SUNDARAM & SRINIVASAN Chartered Accountants Regn.No.004207S



M.PADHMANABHAN Partner Membership No.F13291

Place: Chennai Date: 20.04.2011


Mar 31, 2000

We have audited the attached Balance Sheet of The Coromandel Engineering Company Limited, as at 31st March, 2000 and the relative Profit and Loss Account for the year ended on that date, both signed by us under reference to this report and report that:

1. 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;

2. 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 subject to Note No. 7 b (ii) of Schedule 19 regarding accounting of earned leave salary to staff on cash basis instead of accrual basis.

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

4. In our opinion the Profit and Loss account and Balance sheet comply with the Accounting Standards referred to in Sec. 211(3)(c) of the Companies Act, 1956, except Accounting Standard 15 in respect of earned leave salary referred to in para 2 above.

5. In our opinion and to the best of our information and according to the explanations given to us, the said accounts, read with the statement on Accounting policies, Notes pn accounts and Schedules annexed thereto* give the information required by the Companies Act, 1956, in the manner so required and subject to the following Notes under Schedule 19:-

a) Note No. 4(v)(A) regarding non provision for estimated liabilities for (a) Sales Tax Liability on Works Contracts, (b) Central Sales Tax demands, (c) Sales Tax demands from Madhya Pradesh Sales Tax Authorities.

b) Note No. 4 (v)(B) regarding Central Excise duty demand;

c) Note No. 5 regarding Investment allowance;

d) Note No. 9 regarding realisability of dues from Companys overseas project; give a true and fair view:

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2000, and

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

6. As required by the Manufacturing and other Companies (Auditors Report) Order, 1988 issued by the Company Law Board in terms of Section 227 (4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

A (i) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets of significant value. As per information given to us, a physical verification of almost all assets of significant value has been conducted by the Management at periodical intervals, and on the basis of explanations received, no serious discrepancies have been noticed on such verification.

(ii) None of the Fixed Assets have been revalued during the year.

(iii) Physical verification has been conducted by the Management at reasonable intervals in respect of Stock-in-trade, Finished goods, Raw materials, Stores, Spare parts and Materials at sites.

(iv) In our opinion, the procedures of physical verification of stocks followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

(v) The discrepancies noticed on such verification as compared to book records, were not material and have been properly dealt with in the books of account.

(vi) On the basis of the examination of the stock records, we are of the opinion that the valuation of the stocks is fair and proper, in accordance with normally accepted accounting principles and is on the same basis as in the preceding year.

(vii) The Company has not taken any loan from Companies, firms or other parties listed in the register maintained under Section 301, and from Companies under the same management as defined under Section 370 (IB) of the Companies Act, 1956.

(viii) The company has not granted any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 or to companies under the same management as defined under Sub- section (IB) of Section 370 of the said Act.

(ix) The parties including employees to whom loans or advances in the nature of loans have been given by the company are repaying the principal amounts as stipulated and are also regular in payment of interest where applicable.

(x) 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 stores, raw materials including components, plant and machinery, equipments and other assets and with regard to the sale of goods.

(xi) In our opinion, the transactions of purchase of goods and materials and sale of goods, materials and services, made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the companies Act 1956 and aggregating during the year to Rs. 50,000/- or more in respect of each party were made at prices which are reasonable having regard to prevailing market prices as available with company or the price at which transactions for similar goods, materials or services have been made with other parties;

(xii) The Company has a regular procedure for the determination of unserviceable or damaged stores and raw materials including components and finished goods and necessary provision for the loss arising on the items so determined has been made in the accounts.

(xiii) The Company has not accepted any deposit from public under the provisions of Section 58(A) of the Companies Act, 1956 during the year.

(xiv) In our opinion the Company is maintaining reasonable records for the sale and disposal of realisable scrap. The company does not have any by-products.

(xv) In our opinion, the Company has an Internal Audit System, commensurate with the size and nature of its business.

(xvi) The Central Government has not prescribed the maintenance of cost records by the Company under Section 209 (l)(d) of the Companies Act, 1956 for any of its products.

(xvii) The Company has been generally regular in depositing, during the year, the Provident Fund and Employees State Insurance dues with the appropriate authorities, where applicable.

(xviii) Subject to Note No. 4(v)(A) and 4(v)(B) no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty and Excise Duty were outstanding as at 31st March, 2000, for a period of more than six months from the date they became payable.

(xix) In the course of our Audit, we have not come across any personal expenses of employees or Directors which have been charged to Profit and Loss account other than those payable under contractual obligations or in accordance with generally accepted business practice.

(xx) The Company is not a sick industrial company within the meaning of clause (0) of sub-section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

B. In respect of the service activities of the Company:-

(i) The Company has a reasonable system of recording receipts, issues and consumption of materials and stores, commensurate with its size and nature of its business and this system provides for a reasonable allocation of materials to the relative jobs.

(ii) The Company has a reasonable system of allocating labour and wages to the relative jobs, commensurate with its size and nature of its business.

(iii) The Company has a reasonable system of authorisation at proper levels and an adequate system of internal control, commensurate with the size of the Company and nature of its business on issue of stores and allocation of stores and labour to jobs.

C. In respect of the trading activities of the Company, damaged goods have been determined and necessary provision for losses, which were not significant, have been made in the accounts.

For SUNDARAM & SRINIVASAN

Chartered Accountants

Chennai K. SRINIVASAN

29th May 2000 Partner

 
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