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Auditor Report of EIH Ltd.

Mar 31, 2015

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Mar 31, 2014

We have audited the accompanying financial statements of EIH Limited ("the Company"), which comprise the Balance sheet as at 31st March, 2014, and the statement of profit and Loss and Cash Flow statement for the year then ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). this responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. the procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is suffcient 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 31st March, 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.

Emphasis of Matter

We draw attention to note 39 to the Financial statements relating to the stay order given by the High Court of Himachal pradesh against the issue and offer of shares by Mashobra resort Limited to the Company against the advances made by the Company thereby making such adjustment of the advances dependent upon the Hon''ble High Court''s decision. our opinion is not qualifed in this respect.

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-section (4A) of section 227 of the Companies Act 1956 ("the Act"), we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said 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 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, 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 dealt with by this report comply with the Accounting standards referred to in sub-section (3C) of section 211 of the Act;

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

ANNEXURE TO INDEPENDENT AUDITOR''S REPORT (Referred to in paragraph 1 under the heading "report on other Legal and regulatory requirements" of our report of even date)

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

(b) All the assets have not been physically verifed by the Management during the year but there is a regular programme of verifcation which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. the discrepancies noticed on such verifcation which were not material have been properly dealt with in the books of accounts.

(c) the fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

ii (a) As explained to us, inventories have been physically verifed by the Management during the year at reasonable intervals. In our opinion, the frequency of verifcation is reasonable.

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

(c) The Company is maintaining proper records of inventory. the discrepancies noticed on verifcation between the physical stocks and the book records were not material.

iii (a) The Company has not granted any loans, secured or unsecured, to companies, frms or other parties covered in the register maintained under section 301 of the Act.

(b) In view of our comments in paragraph iii (a) above, the provisions of Clauses iii (b), iii (c) and iii (d) of paragraph 4 of the aforesaid order are not applicable to the Company.

(c) The Company has not taken any loan, secured or unsecured, from companies, frms or other parties covered in the register maintained under section 301 of the Act.

(d) In view of our comment in paragraph iii (c) above, clauses iii (f) and iii (g) of paragraph 4 of the aforesaid order are not applicable to the Company.

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

v According to the information and explanations given to us, we are of the opinion that no particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Act. According, clause v(b) of paragraph 4 of the aforesaid order is not applicable to the Company.

vi the Company has not accepted any deposit from the public during the year under sections 58A and 58AA of the Act and the Companies (Acceptance of deposits) rules, 1975. According to information and explanations given to us, no order has been passed by the Company Law Board or the national Company Law tribunal or the reserve Bank of India or any Court or any other tribunal.

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

viii The Central Government has not prescribed maintenance of cost records under section 209 (1)(d) of the Act for the Company.

ix (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, value added tax/sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no undisputed amount payable in respect of income tax, wealth tax, service tax, value added tax/sales tax, customs duty, excise duty and cess which were outstanding as at 31st March, 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 following dues of income tax, value added tax/sales tax, customs duty, excise duty and service tax have not been deposited by the Company on account of disputes:

Sl. No. Name of the Statute Nature of Forum where Amount the dues dispute is (Rupees in pending Million)

1 Income tax Act, 1961 Income CIT (Appeals), Kolkata for 295.02 Tax Assessment Years 2000-2001, 2005-2006, 2006-2007, 2007-2008, 2008-2009 and 2010-2011

ITAT, Kolkata for 422.48 Assessment Years 2002-2003, 2003-2004, 2004-2005, 2006-2007, 2008-2009 and 2009-2010

TOTAL 717.50

2. Income tax Act, 1961 Tax Deducted CIT(Appeals), Delhi for 14.59 at source Assessment Years 2004-2005 to 2007-2008, 2010-2011 and 2011-2012

CIT (Appeals), Mumbai for 13.84 Assessment Years 2009-2010, and 2010-2011

DCIT (Appeals), Delhi for 0.44 Assessment Years 2011-2012

TOTAL 28.87

3. Value Added tax of VAT/ Maharashtra Sales tax 11.98 various states Sales tax tribunal/Joint Commissioner of sales tax Appeals, Mumbai for 1999-2000, 2002-2003, 2008-2009 and 2009-2010

Commissioner of sales tax, 3.07 Mumbai for 2005-2006

Sr. Joint Commiss -ioner of 0.62 Sales tax & VAT, Kolkata for 2009-2010

Additional Commiss -ioner of 12.52 Sales tax & Vat, Kolkata for 2007-2008, 2008-2009 and 2010-2011

Joint Commissioner of sales 10.57 Tax appeals, Kolkata for 2005-2006, 2007-2008, 2009-2010 and 2010-2011

TOTAL 38.76

4. Customs Act, 1962 Customs CESTAT Tribunal, Delhi for 429.66 Duty 2008-2009

TOTAL 429.66

5. Central excise Excise Commissioner (Appeals) of 3.53 Act, 1944 Duty Central excise, Mumbai for 2002-2004

Customs, Excise & Service tax 69.53 Appellate tribunal, Mumbai for 2005-2006

Customs, excise & service tax 26.01 Appellate tribunal, Delhi for 2004-2005 and 2005-2006

TOTAL 99.07

6. Central Excise Service Tax Various show Cause Notices 60.53 Act, 1944 served for 2004-2007 and 2009-2011 and replied

Commissioner of Central 0.27 excise (Appeal-I), Kolkata 2001-2006

Commissioner of Service tax, 22.71 Kolkata for 2009-2010 to 2011-2012

Joint Commissioner of Central 1.11 excise (Appeals), Cochin for 2004-2006

Commissioner of Service tax, 6.40 Delhi for 2007-2008 to 2009-2010

Custom Excise and Service Tax 6.69 Appellate tribunal, New Delhi for 2011-2012

Commissioner of Service tax, 30.81 Delhi for 2003-2004 to 2006-2007

Commissioner of Service tax, 4.08 Kolkata for 2008-2009 to 2011-2012

TOTAL 132.60

x The Company has no accumulated losses and has not incurred any cash loss during the year covered by our report and in the immediately preceding financial year.

xi In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions and banks. there are no debenture holders.

xii The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other similar securities.

xiii In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Accordingly, the provisions of Clause (xiii) of paragraph 4 of the aforesaid order are not applicable to the Company.

xiv In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause (xiv) of paragraph 4 of the aforesaid order are not applicable to the Company.

xv The Company has given guarantees for loans taken by its subsidiary company from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions on which the Company has given guarantees for loans taken from banks and financial institutions are not, prima-facie, prejudicial to the interest of the Company.

xvi According to the information and explanations given to us, the term loans raised by the Company 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 no funds raised on short-term basis have been used for long-term investments.

xviii According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies/frms covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause (xviii) of paragraph 4 of the aforesaid order are not applicable to the Company.

xix The Company has not issued unsecured debentures during the year under audit. Accordingly, the provisions of clause (xix) of paragraph 4 of the aforesaid order are not applicable to the Company.

xx The Company has not raised any money by way of public issue during the year. Accordingly, the provisions of clause (xx) of paragraph 4 of the aforesaid order are not applicable to the Company.

xxi According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For RAY & RAY

Chartered Accountants

Firm''s Registration Number 301072E

A.K. SHARMA New Delhi Partner

30th May, 2014 Membership Number 80085


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of EIH Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2013, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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.

Emphasis of Matter

Without expressing a qualified opinion, we draw attention as a Matter of Emphasis to Note No. 39 of Notes to the Accounts relating to the pending issue of shares by Mashobra Resort Limited against the advances made by the Company.

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 31st March, 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, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act 1956 ("the Act"), we give in the Annexure of statement on the matters specified in paragraphs 4 and 5 of the said 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 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, 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 dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Act;

e. on the basis of written representations received from the Directors as on 31st March, 2013 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2013 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

ANNEXURE TO THE AUDITOR''S REPORT

(Referred to in praagraph 1 under the heading Report on Other Legal Requirements)

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

(b) All the assets have not been physically verified by the Management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. The discrepancies noticed on such verification which were not material have been properly dealt with in the books of accounts.

(c) the fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

ii (a) As explained to us, inventories have been physically verified by the Management during the year at reasonable intervals. In our opinion, the frequency of verification is reasonable.

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

(c) the Company is maintaining proper records of inventory. the discrepancies noticed on verification between the physical stocks and the book records were not material.

iii (a) the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Act.

(b) In view of our comments in paragraph iii (a) above, the provisions of Clauses iii (b), iii (c) and iii (d) of paragraph 4 of the aforesaid order are not applicable to the Company.

(c) the Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the Register maintained under section 301 of the Act.

(d) In view of our comment in paragraph iii (c) above, clauses iii (f) and iii (g) of paragraph 4 of the aforesaid order are not applicable to the Company.

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

v According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the Register maintained under Section 301 of the Act. According, clause v(b) of paragraph 4 of the aforesaid Order is not applicable to the Company.

vi The Company has not accepted any deposit from the public during the year under Sections 58A and 58AA of the Act and the Companies (Acceptance of Deposits) Rules, 1975. According to information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

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

viii The Central Government has not prescribed maintenance of cost records under section 209 (1)(d) of the Act for the Company.

ix (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, value added tax/sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, there are no undisputed amount payable in respect of income tax, wealth tax, service tax, value added tax/sales tax, customs duty, excise duty and cess which were outstanding as at 31st March, 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, there are no dues of wealth tax, and cess which have not been deposited on account of any dispute other than disputed income tax, value added tax/sales tax, customs duty, excise duty and service tax as indicated below:

Sl. No. Name of the Statute Nature of Forum where Amount the dues dispute is (Rupees in pending Million)

1 Income Tax Act, 1961 Income CIT (Appeals), Kolkata for 224.40 Tax Assessment Years 2000-2001, 2007-2008, 2009-2010 and 2010-2011

ITAT, Kolkata for 379.50 Assessment Years 2002-2003, 2003-2004, 2004-2005, 2005-2006, 2006-2007 & 2008-2009

TOTAL 603.90

2. Income Tax Act, 1961 Tax Deducted CIT (Appeals), Delhi for 14.16 at Source Assessment Years 2004-2005 to 2007-2008, 2010-2011 and 2011-2012

TOTAL 14.16

x the Company has no accumulated losses and has not incurred any cash loss during the year covered by our Report and in the immediately preceding financial year.

xi In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions and banks. there are no debenture holders.

xii the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other similar securities.

xiii In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. therefore, the provisions of Clause (xiii) of paragraph 4 of the aforesaid order are not applicable to the Company.

xiv In our opinion and according to the information and explanations given to us, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of Clause (xiv) of paragraph 4 of the aforesaid order are not applicable to the Company.

xv the Company has given guarantees for loans taken by its subsidiary companies from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions on which the Company has given guarantees for loans taken from banks and financial institutions are not, prima-facie, prejudicial to the interest of the Company.

xvi According to the information and explanations given to us, the term loans raised by the Company 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 no funds raised on short-term basis have been used for long-term investments.

xviii According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies/firms covered in the Register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause (xviii) of paragraph 4 of the aforesaid order are not applicable to the Company.

xix The Company has not issued unsecured debentures during the year under audit. Accordingly, the provisions of clause (xix) of paragraph 4 of the aforesaid Order are not applicable to the Company.

xx The Company has not raised any money by way of public issue during the year. Accordingly, the provisions of clause (xx) of paragraph 4 of the aforesaid Order are not applicable to the Company.

xxi According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit.

For RAY & RAY

Chartered Accountants

Firm''s Registration Number 301072E

R.N. ROY

Kolkata Partner

30th May, 2013 Membership Number 8608


Mar 31, 2012

1. We have audited the attached Balance sheet of EIH Limited ('the Company') as at 31st March, 2012, the statement of profit and Loss and also 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 the Auditing standards generally accepted in India. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the Financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the Financial statements. An audit also includes assessing the accounting principles used and significant estimates made by Management, as well as evaluating the overall Financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's report) order, 2003, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act 1956 ('the Act') and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said order.

4. Without expressing a qualified opinion, we draw attention as a matter of emphasis to Note no. 39 of Notes to the Accounts relating to the pending issue of shares by Mashobra resort Limited against the advances made by the Company.

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

i) We have obtained all the information and explanations, which, to the best of our knowledge and belief, were necessary for the purposes of our audit;

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

iii) The Balance sheet, statement of profit and Loss and Cash Flow statement dealt with by this report are in agreement with the books of account;

iv) In our opinion, the Balance sheet, statement of profit and Loss and Cash Flow statement dealt with by this report comply with the Accounting standards referred to in sub-section (3C) of section 211 of the Act;

v) 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 Act;

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

a) In the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2012;

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.

ANNEXURE TO THE AUDITOR'S REPORT

The Annexure referred to in our report to the members of EIH Limited ('the Company') for the year ended 31st March, 2012. We report that :

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

(b) All the assets have not been physically verified by the Management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. the discrepancies noticed on such verifcation which were not material have been properly dealt with in the books of accounts.

(c) The fixed assets disposed off during the year, in our opinion, do not constitute a substantial part of the fixed assets of the Company and such disposal has, in our opinion, not affected the going concern status of the Company.

ii (a) As explained to us, inventories have been physically verified by the Management during the year at reasonable intervals. in our opinion, the frequency of verification is reasonable.

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

(c) The Company is maintaining proper records of inventory. the discrepancies noticed on verification between the physical stocks and the book records were not material.

iii (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Act.

(b) In view of our comments in paragraph iii (a) above, the provisions of Clauses iii (b), iii (c) and iii (d) of paragraph 4 of the aforesaid order are not applicable to the Company.

(c) The Company has not taken any loan, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act.

(d) In view of our comment in paragraph iii (c) above, clauses iii (f) and iii (g) of paragraph 4 of the aforesaid order are not applicable to the Company.

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

v On the basis of our examination of the books of account and according to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Act have been so entered. According to the information and explanations given to us, there are no transactions during the year that need to be entered into the register maintained under section 301 of the Act and therefore, clause v(b) of paragraph 4 of the aforesaid order is not applicable to the Company.

vi The Company has not accepted any deposit from the public during the year under sections 58A and 58AA of the Act and the Companies (Acceptance of deposits) rules, 1975. According to information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law tribunal or the reserve Bank of India or any Court or any other tribunal.

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

viii The Central Government has not prescribed maintenance of cost records under section 209 (1)(d) of the Act for the Company.

ix (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, value added tax/sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues applicable to it.

Further, since the Central Government has till date not prescribed the amount of cess payable under section 441A of the Companies Act, 1956, we are not in a position to comment upon the regularity or otherwise of the Company in depositing the same.

(b) According to the information and explanations given to us, there are no undisputed amount payable in respect of income tax, wealth tax, service tax, value added tax/sales tax, customs duty, excise duty and cess which were outstanding 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, there are no dues of wealth tax, and cess which have not been deposited on account of any dispute other than disputed income tax, value added tax/sales tax, customs duty, excise duty and service tax as indicated below:

Sl. No. Name of the Nature of Forum where Amount Statute the dues dispute is (Rupees in pending Million)

1 Income tax Act, 1961 i) income Cit (Appeals), Kolkata for tax Assessment Years 2009-10 128.70 it At, Kolkata for Assessment Years 2002-03, 2003-04, 2004-05, 2005-06, 2006-07 & 2008-09 379.81

ii) Fringe Cit (Appeals), Kolkata for Beneft Assessment Years 2006-07 & tax 2009-2010 19.67

TOTAL 528.18

2. Income tax Act, 1961 tax deducted Cit (Appeals), delhi for at source Assessment Years 2003-04 to 2006-07 & 2009-10 11.81

Cit (Appeals), Mumbai for Assessment Years 2009-10 & 2010-11 13.84

Cit (Appeals), delhi for Assessment Years 2008-09 & 2011-12 0.23

TOTAL 25.88

3. Value Added tax of sales tax Maharashtra sales tax various states tribunal/Joint Commissioner of sales tax, Appeals-ii, Mumbai for 1999-2000 & 2001-02 to 2004-05 15.01

Appellate and revisional Board, Kolkata for 2004-05 4.27

Commissioner of sales tax, Mumbai for 2006-07 3.07

Commissioner of sales tax, Kolkata 2005-06 & 2006-07 0.99

Appellate deputy Commissioner, Kanchipuram 2005-06 2.58

TOTAL 25.92

4. Customs Act, 1962 Customs duty CestAt/tribunal for 2008-09 429.66

TOTAL 429.66

5. Central excise excise duty Customs, excise & service tax Act, 1944 Appellate tribunal, Mumbai for 2002-04 3.53

Customs, excise & service tax Appellate tribunal, Mumbai for 2005-06 69.53

Customs, excise & service tax Appellate tribunal, delhi for 2005-06 26.01

TOTAL 99.07

6. Central excise service tax Customs, Central excise & Act, 1944 service tax, delhi for 2004-06 22.38

Various show Cause Notices served for 2009-2011 and replied 40.27

Customs and service tax Appellate tribunal, Kolkata 2001-06 0.27

Joint Commissioner of Central excise (Appeals), Cochin for 2004-05 1.11

TOTAL 64.03

x The Company has no accumulated losses and has not incurred any cash loss during the year covered by our report and in the immediately preceding financial year.

xi Based on our audit procedures and, according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and banks. there are no debenture holders.

xii The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other similar securities.

xiii In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. therefore, the provisions of Clause (xiii) of paragraph 4 of the aforesaid order are not applicable to the Company.

xiv In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. However, reasonable records have been maintained of shares and securities held as investments. All the shares and securities held by the Company as investments are in its own name. However, the provisions of Clause (xiv) of paragraph 4 of the aforesaid order are not applicable to the Company.

xv The Company has given guarantees for loans taken by its subsidiaries and associate company from banks and financial institutions. According to the information and explanations given to us, we are of the opinion that the terms and conditions on which the Company has given guarantees for loans taken from banks and financial institutions are not, prima-facie, prejudicial to the interest of the Company.

xvi According to the information and explanations given to us, the term loans raised by the Company 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 no funds raised on short-term basis have been used for long-term investments.

xviii According to the information and explanations given to us, the Company has not made any preferential allotment of shares to parties and companies/firms covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause (xviii) of paragraph 4 of the aforesaid order are not applicable to the Company.

xix The Company has not issued unsecured debentures during the year under audit. Accordingly, the provisions of clause (xix) of paragraph 4 of the aforesaid order are not applicable to the Company.

xx We have verified the end use of money raised by the rights issue of equity shares in 2011 as disclosed in Note 32 of Notes to the Accounts.

xxi During the course of our examination of the books of accounts carried out in accordance with Generally Accepted Auditing practices, we have neither come across any instance of fraud on or by the Company nor have we been informed of any such case by the Management.

For RAY & RAY

Chartered Accountants

A. K. SHARMA

Partner

Gurgaon Membership Number 80085

29th May, 2012 Firm's registration Number 301072E

 
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