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Auditor Report of High Energy Batteries (India) Ltd.

Mar 31, 2017

REPORT ON THE STANDALONE FINANCIAL STATEMENTS

We have audited the accompanying Standalone Financial Statements of HIGH ENERGY BATTERIES (INDIA) LIMITED(‘the Company’), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of Significant Accounting Policies and other explanatory information.

MANAGEMENT’S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

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

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the 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 2017.

b) In the case of Statement of Profit and loss of the Profit for the year ended on that date and

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

EMPHASIS OF MATTER:

We draw attention to:

i) Note No 28 regarding recognition of Deferred Tax Asset (Net) of Rs.818.86 lakhs recognized so far including reversal of deferred tax asset of Rs.12.77 lakhs for the current year. The Management is of the view that the company will have adequate taxable income in the future and there exists virtual certainty for taking benefit of Deferred Tax Asset.

ii) Note No 44 regarding non receipt of confirmation of balances/pending reconciliation in respect of certain debtors/creditors and advance from customers. Adjustments if any which may arise upon receipt of confirmation/ completion of reconciliation will be dealt with in the year of receipt of confirmation/ completion of reconciliation.

Our opinion is not qualified in respect of the above matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

(d)in our opinion, the aforesaid Standalone Financial Statements comply with the Accounting standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

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

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.

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

(i) the Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note No. 19 to the financial statements;

(ii) the Company did not have any long-term contracts, including derivative contracts, that requires a provision for material foreseeable losses in these financial statements; and

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

(iv) The Company has provided adequate disclosures in the financial statements as to holdings as well as dealing in Specified Bank notes during the period from November 8, 2016 to December 30, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the management - Refer Note 42.

2 As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of Subsection (11) of Section 143 of the Act, we give in the Annexure “B” a statement on the matters specified in the Paragraphs 3 and 4 of the Order, to the extent applicable.

The Annexure referred to in Paragraph 2 under the heading “Report on Other Legal and Regulatory Requirements” of our Report of even date:

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b) These fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties are held in the name of the Company.

(ii) The Management has conducted physical verification of inventory at reasonable intervals and no material discrepancies were noticed.

(iii) The Company has not granted any loans to any party covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) The Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013, in respect of, investments made by the Company. The company has not provided any loans or guarantee or security to any company covered under Section 185.

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

(vi) The Central Government has prescribed maintenance of Cost Records under Subsection (1) of Section 148 of the Companies Act, 2013 and such accounts and records have been made and maintained.

(vii) According to the information and explanations given to us in respect of Statutory dues :

(a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other Statutory Dues to the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31st March 2017 for a period of more than six months from the date they became payable. However, there are some delays in remitting certain undisputed statutory dues during the year.

b) Details of dues of Income Tax or Sales Tax or Service Tax or Duty of Customs or Duty of Excise or Value Added Tax have not been deposited as on 31st March 2017 on account of disputes are given below :

Name of the Statute

Tamilnadu VAT Act

Nature of Dues

VAT

Amount Rs. in Lakhs

Rs.84.65 Lakhs (''15 Lakhs paid as per court order)

Forum where the dispute is pending

Madurai Bench, Madras High Court

Period to which the dues belong

Financial Years 2007 - 08 to 2010 - 11

Name of the Statute

Income Tax Act, 1961

Nature of Dues

Income Tax

Amount Rs. in Lakhs

Rs. 21.91 Lakhs

Forum where the dispute is pending

CIT Appeals

Period to which the dues belong

Assessment Year 2000 - 2001, 2004 - 2005 & 2007 - 2008

(viii) The Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.

(ix) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year.

(x) As per the information and explanations made available to us the Company has not noticed any fraud by the Company or any fraud on the Company by its Officers or employees or reported during the year.

(xi) The managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197, read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence complying with the provisions of the Nidhi Rules, 2014 does not arise.

(xiii) All transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosed in the Financial Statements, etc., as required by the applicable Accounting Standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

(xv) The Company has not entered into any non-cash transactions with Directors or persons connected with him.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

For M/s. R. SUBRAMANIAN AND COMPANY LLP

Chartered Accountants

Firm Reg. No. 004137S/S200041

K JAYASHANKAR

Partner

Membership No. 14156

Chennai

May 29, 2017


Mar 31, 2016

INDEPENDENT AUDITOR’S REPORT FOR THE YEAR ENDED 31st MARCH 2016

To the Members of HIGH ENERGY BATTERIES (INDIA) LIMITED

REPORT ON FINANCIAL STATEMENTS

We have audited the accompanying Standalone Financial Statements of HIGH ENERGY BATTERIES (INDIA) LIMITED(‘the

Company’), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss and the 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 and presentation of these Standalone Financial Statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit. We have taken into account the provisions of the Act, the Accounting and Auditing Standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

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

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

OPINION

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Standalone Financial Statements give the information required by the 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 2016.

b) In the case of Statement of Profit and loss of the loss for the year ended on that date and

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

EMPHASIS OF MATTER:

We draw attention to:

- Note No 29 regarding recognition of Deferred Tax Asset (Net) of Rs.831.63 lakhs recognized so far including Rs.403.85 lakhs for the current year. The Management is of the view that the company will have adequate taxable income in the future and there exists virtual certainty for taking benefit of Deferred Tax Asset.

- Our opinion is not qualified in respect of the above matter.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

(d) in our opinion, the aforesaid Stand alone 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 the written representations received from the Directors as on 31st March 2016 and taken on record by the Board of Directors, none

of the Directors is disqualified as on 31st March 2016 from being appointed as a Director in terms of Section 164(2) of the Act; and

(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure A”.

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

(i) the Company has disclosed the impact of pending litigations on its financial position in its financial statements -Refer Note No. 20 to the financial statements;

(ii) the Company did not have any long-term contracts, including derivative contracts, that requires a provision for material foreseeable losses in these financial statements; and

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

2 As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of Sub-section (11) of Section 143 of the Act, we give in the Annexure “B” a statement on the matters specified in the Paragraphs 3 and 4 of the Order, to the extent applicable.

We have audited the internal financial controls over financial reporting of High Energy Batteries (India) Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the Standalone Financial Statements of the Company for the year ended on that date

MANAGEMENT’S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

AUDITORS’ RESPONSIBILITY

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under Section 143(10) of the

Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that :

(i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and Directors of the company; and

(iii)provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

The Annexure referred to in Paragraph 2 under the heading “Report on Other Legal and Regulatory Requirements” of our Report of even date:

(i) (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;

(b)These fixed assets have been physically verified by the Management at reasonable intervals and no material discrepancies were noticed on such verification.

(c) The title deeds of immovable properties are held in the name of the Company.

(ii) The Management has conducted physical verification of inventory at reasonable intervals and no material discrepancies were noticed.

(iii) The Company has not granted any loans to any party covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) The Company has complied with the provisions of Sections 185 and 186 of the Companies Act, 2013, in respect of, investments made by the Company. The company has not provided any loans or guarantee or security to any company covered under Section 185.

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

(vi) The Central Government has prescribed maintenance of Cost Records under Subsection (1 ) of Section 1 48 of the Companies Act, 2013 and such accounts and records have been made and maintained.

(vii) According to the information and explanations given to us in respect of Statutory dues :

(a) The Company is regular in depositing undisputed statutory dues, including Provident Fund, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other Statutory Dues to the appropriate authorities and there were no undisputed amounts payable which were in arrears as at 31st March 2016 for a period of more than six months from the date they became payable.

b) Details of dues of Income Tax or Sales Tax or Service Tax or Duty of Customs or Duty of Excise or Value Added Tax have not been deposited as on 31st March 2016 on account of disputes are given below :

Name of the Statute

Tamilnadu VAT Act

Nature of Dues

VAT

Amount Rs, in Lakhs

Rs,84.65 Lakhs (Rs,15 Lakhs paid as per court order)

Forum where the dispute is pending

Madurai Bench, Madras High Court

Period to which the dues belong

Financial Years 2007 - 08 to 2010 - 11

Name of the Statute

Bihar Sales Tax act

Nature of Dues

Bihar Sales Tax

Amount Rs, in Lakhs

Rs, 4.50 Lakhs

Forum where the dispute is pending

Bihar High Court

Period to which the dues belong

Financial Years 2013 - 2014

Name of the Statute

Income Tax Act, 1961

Nature of Dues

Income Tax

Amount Rs, in Lakhs

Rs, 21.91 Lakhs

Forum where the dispute is pending

CIT Appeals

Period to which the dues belong

Assessment Year 2000 - 2001, 2004 - 2005 & 2007 - 2008

(viii) The Company has not defaulted in repayment of loans or borrowing to a financial institution, bank, Government or dues to debenture holders.

(ix) The Company has not raised any money by way of initial public offer or further public offer (including debt instruments) during the year.

(x) As per the information and explanations made available to us the Company has not noticed any fraud by the Company or any fraud on the Company by its Officers or employees or reported during the year.

(xi) The managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197, read with Schedule V to the Companies Act, 2013.

(xii) The Company is not a Nidhi Company and hence complying with the provisions of the Nidhi Rules, 2014 does not arise.

(xiii) All transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013, where applicable and the details have been disclosed in the Financial Statements, etc., as required by the applicable Accounting Standards.

(xiv) The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.

(xv) The Company has not entered into any non-cash transactions with Directors or persons connected with him.

(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.

For M/s. R. SUBRAMANIAN AND COMPANY

Chartered Accountants

ICAI Regd. No. 004137S

K JAYASHANKAR

Partner

Membership No. 14156

Chennai

May 28, 2016


Mar 31, 2015

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

MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the act') with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting Standards Specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) rules 2014.This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the company and for preventing and detecting frauds and other irregularities, selection and application of appropriate accounting policies, making judgments and estimates that are reasonable and prudent; and design implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the

preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

AUDITOR'S RESPONSIBILITY

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

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

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

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

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

OPINION

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2015;

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

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

EMPHASIS OF MATTER:

We draw attention to:

- Note No : 28 regarding recognition of Deferred Tax Asset ( Net ) of Rs 427.78 Lakhs and Minimum Alternate Tax (MAT) credit ofRs 31.68 Lakhs. The Management is of the view that the company will have adequate taxable income in the future and there exists virtual certainty for taking benefit of Deferred Tax Asset and MAT credit.

- Note No 33 regarding recognition of Profit on of sale of certain lands pursuant to execution of sale agreement, physical possession handed over to the buyer and receipt of substantial portion of the sale consideration.The execution and registration of sale deed has since been completed.

Our opinion is not qualified in respect of these matters.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1 As required by the Companies (Auditor's Report) Order 2015, ('the Order") issued by the Central Government of India in terms of Sub section (11) of Section 143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

(a) we have sought and obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the 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 and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of account;

(d) in our opinion, the aforesaid 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 and 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 Auditors 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 in Note No. 20.

(ii) The company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.

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

Annexure referred to in Paragraph 1 under the heading "Report on other legal and regulatory requirements "of our Report of even date to the members of HIGH ENERGY BATTERIES (INDIA) LIMITED on the accounts of the company for the year ended 31st March 2015

On the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of our audit, we report that:

(i) (a) The Company has maintained proper records showing full particu -lars, including quantitative details and situation of fixed assets;

(b) As explained to us, these fixed assets have been physically verified by the management at reasonable intervals; as informed to us no material discrepancies were noticed on such verification;

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

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

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt with in the books of accounts and were not material.

(iii) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company and according to the information and explanations given to us, no major weaknesses in internal controls have been noticed or reported.

(v) The Company has not accepted any deposits from the public covered under Section 73 to 76 of the Companies Act, 2013

(vi) On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under sub-section (1) of Section 148 of the Act have been made and maintained. However, we are not required to and have not carried out any detailed examination of such records.

(vii) (a)According to the information and explanations given to us and based on the records of the company examined by us, the company has generally been regular in depositing undisputed statutory dues of Income Tax , Customs Duty and Excise Duty The company has not been regular in depositing VAT , Service Tax , Central Sales tax , Profession Tax , Provident Fund and ESI dues . There has been a delay ranging from 1 to 180 days. The Company is not liable to pay wealth tax. As on 31st March 2015, Profession tax dues of Rs.32,926 is outstanding for more than six months from the date it became payable.

(b) According to the information and explanations given to us and based on the records of the company examined by us, the dues of Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty , Excise Duty and Cess and other material statutory dues as on 31st March 2015 which have not been deposited on account of disputes are given below:

Name of the Statute Tamilnadu VAT Act

Nature of Dues VAT

Amount Rs in Lakhs Rs84.65/-l akhs (Rs15 Lakhs paid as per court order)

Forum where the dispute Madurai Bench, Madras High Court is pending

Period to which Financial Years the dues belong 2007 - 08 to 2010 - 11

(c) The amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made there- under has been transferred to such fund within time.

(viii) The company has accumulated losses as at 31st March 2015 and has also incurred cash losses in the current year as well as in the previous year. The accumulated losses as on 31 st March 2015 is less than 50% of the Net worth of the company.

(ix) The company has defaulted in payment of dues to three banks aggregating to Rs. 140 Lakhs the delay ranging from 1 day to 60 days.

(x) The company has not given guarantees for loans taken by others from banks or financial institutions.

(xi) No term loans have been availed by the company during the year.

(xii) During the course of our examination of the books and records of the company, carried in accordance with the auditing standards generally accepted in India, we have neither come across any instance of fraud on or by the Company noticed or reported during the course of our audit nor have we been informed of any such instance by the Management.

For M/s. R. SUBRAMANIAN AND COMPANY Chartered Accountants ICAI Regd. No. 004137S

A. GANESAN Partner Membership No. 21438

Chennai May 30, 2015


Mar 31, 2014

We have audited the accompanying financial statements of HIGH ENERGY BATTERIES (INDIA) LIMITED which comprise of the Balance Sheet as at 31st March 2014, Statement of Profit & Loss and Cash Flow Statement for the year ended on that date 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"). The 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 of material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances but not for the purpose of expressing an opinion on the effectiveness of the 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 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 31st March 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 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 the 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 purpose of our audit;

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

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

(d) in our opinion, the 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 31st March 2014 and taken on record by the Board of Directors, none of the directors is disqualified 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 Companies Act, 1956.

ANNEXURE REFERRED TO IN PARAGRAPH 1 OF OUR REPORT OF EVEN DATE

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets. These Fixed Assets have been physically verified by the Management on a regular programme, which in our opinion is reasonable having regard to the size of the Company and nature of its Assets. No significant discrepancies were noticed on such verification. No significant parts of fixed assets have been disposed off during the year.

ii The stock of Finished Goods, stores, spare parts and raw materials except stock lying with third parties, for which confirmation have been sought for, have been physically verified during the year by the Management. In our opinion, the frequency and procedure of physical verification is reasonable and adequate in relation to the size of the Company and the nature of its business. The Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not significant, and the same have been properly dealt with in the Books of Account.

iii. (a) The Company has not granted any loans, secured / unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) The Company has not taken any loans from parties listed in the register maintained under Section 301 of the Companies Act, 1956.

iv. In our opinion and according to the information and explanation 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 purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. Based on audit procedures applied by us and according to the information and explanations provided by the Management, the transactions that needed to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered. 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 by Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public and consequently, the provisions of Section 58A and 58AA and any other relevant provisions of the Companies Act, 1956 are not attracted.

vii The Company has an internal audit system commensurate with the size and nature of its business.

viii. On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 have been made and maintained. However, we are not required to and have not carried out any detailed examination of such records.

ix. (a) On the basis of our examination of the Books of Account, the Company has been regular in depositing with appropriate authorities undisputed statutory dues including Employees Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Wealth Tax, Cess and Investor Education and Protection Fund and other material statutory dues.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Cess and Customs Duty that have not been deposited with the appropriate authorities for more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of, Income Tax, Service Tax, Customs Duty, Cess, Wealth Tax and Excise Duty that have not been deposited with the appropriate authorities on account of any dispute. Tamil Nadu VAT to the extent of Rs.69.65/- lakhs has not been deposited on account of dispute.

Financial Year 2007 – 08 to 2010 – 11

Amount of Rs.84.65/- lakhs (out of this, Rs.15 Dispute lakhs has been paid as per court order)

Pending before Madurai Bench, Madras High Court

x. The company''s accumulated losses have not exceeded 50% of its net worth as at the end of the financial year. The company has incurred cash losses in the current financial year, while there were no cash losses in the immediately preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given by the Management, there were no

defaults in repayment of dues to banks as at the end of the year. The Company has not issued any debentures.

xii. Based on our examination of documents and records, 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 fund, nidhi, mutual benefit fund or a society.

xiv. The Company is not dealing or trading in shares, securities, debentures and other Investments.

xv. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. The company has not availed any term loans from the Banks during the year.

xvii. According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have not been used for long term investment.

xviii. During the year the company has not made any preferential allotment of shares.

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

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

xxi. Based on audit procedures performed and information and explanations given by the Management, we report that no fraud on or by the Company has been noticed or reported during the year.

For M/s. R. SUBRAMANIAN AND COMPANY

Chartered Accountants

Firm Registration No. 004137S

A. GANESAN

Partner Membership No. 21438 Chennai May 30, 2014


Mar 31, 2013

REPORT ON FINANCIAL STATEMENTS

We have audited the accompanying financial statements of HIGH ENERGY BATTERIES (INDIA) LIMITED which comprise of the Balance Sheet as at 31st March 2013, Statement of Profit & Loss and Cash Flow Statement for the year ended on that date 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”). The 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 of material misstatement.

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

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

OPINION

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

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 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 the 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 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 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 Companies Act, 1956

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets. These Fixed Assets have been physically verified by the Management on a regular programme, which in our opinion is reasonable having regard to the size of the Company and nature of its Assets. No significant discrepancies were noticed on such verification. No significant parts of fixed assets have been disposed off during the year.

ii. The stock of Finished Goods, stores, spare parts and raw materials except stock lying with third parties, for which confirmation have been sought for, have been physically verified during the year by the Management. In our opinion, the frequency and procedure of physical verification is reasonable and adequate in relation to the size of the Company and the nature of its business. The Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not significant, and the same have been properly dealt with in the Books of Account.

iii. (a) The Company has not granted any loans, secured / unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act 1956.

(b) The Company has not taken any loans from parties listed in the register maintained under Section 301 of the Companies Act 1956.

iv. In our opinion and according to the information and explanation 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 purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. Based on audit procedures applied by us and according to the information and explanations provided by the Management, the transactions that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered. 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 by Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public and consequently, the provisions of Section 58A and 58AA and any other relevant provisions of the Companies Act, 1956 are not attracted.

vii. The Company has an internal audit system commensurate with the size and nature of its business.

viii. On the basis of records produced to us, we are of the opinion that, prima facie, the cost records prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 have been made and maintained. However, we are not required to and have not carried out any detailed examination of such records.

ix. a) On the basis of our examination of the Books of Account, the Company has been regular in depositing

with appropriate authorities undisputed statutory dues including Employees Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Wealth Tax, cess and Investor Education and Protection Fund and other material statutory dues.

b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Cess and Customs Duty that have not been deposited with the appropriate authorities for more than six months from the date they became payable.

c) According to the information and explanation given to us, there are no dues of, Income Tax, Service Tax, Sales Tax, Customs Duty, Cess, Wealth Tax and Excise Duty that have not been deposited with the appropriate authorities on account of any dispute.

x. The company''s accumulated losses have not exceeded 50% of its net worth as at the end of the financial year. The company has not incurred cash losses in the current financial year as well as in the immediately preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given by the Management, the Company has not defaulted in repayment of dues to banks and financial institutions. The Company has not issued any debentures.

xii. Based on our examination of documents and records, 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 fund, nidhi, mutual benefit fund or a society.

xiv. The Company is not dealing or trading in shares, securities, debentures and other Investments.

xv. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. The company has not availed any term loans from the Banks during the year.

xvii. According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have not been used for long term investment.

xviii. During the year the company has not made any preferential allotment of shares.

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

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

xxi. Based on audit procedures performed and information and explanations given by the Management, we report that no fraud on or by the Company has been noticed or reported during the year.

For M/s. R. SUBRAMANIAN AND COMPANY

Chartered Accountants

Firm Registration No. 004137S

A. GANESAN

Partner

Membership No. 21438

Chennai May 30, 2013


Mar 31, 2012

We have audited the attached Balance Sheet of M/s. HIGH ENERGY BATTERIES (INDIA) LIMITED for the year ended 31st March 2012 and also the Profit & Loss account and 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 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 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.

We report that 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.

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.

The Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this Report are in agreement with the Books of Account.

In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this Report comply with the Accounting Standards, referred to in Sec 211(3C) of the Companies Act, 1956.

On the basis of written representations received from the Directors, as on 31s1 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.

In our opinion and to the best of our information and according to the explanations given to us, they said Accounts, read together with the Notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with 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; and

b) In the case of the Profit and Loss Account, of the PROFIT for the financial 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

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, we have further to report as under:

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets. These Fixed Assets have been physically verified by the Management on a regular programme, which in our opinion is reasonable having regard to the size of the Company and nature of its Assets. No significant discrepancies were noticed on such verification. No significant part of fixed assets have been disposed off the during the year

ii. The stock of Finished Goods, stores, spare parts and raw materials except stock lying with third parties, for which confirmation have been sought for, have been physically verified during the year by the Management. In our opinion, the frequency and procedure of physical verification is reasonable and adequate in relation to the size of the Company and the nature of its business. The Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not significant, and the same have been properly dealt with in the Books of Account.

iii. (a) The Company has not granted any loans, secured / unsecured to companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act 1956.

(b)The Company had taken unsecured loans aggregating to Rs 100 lakhs from two companies listed in the register maintained under Section 301 of the Companies Act 1956 in the earlier years. The terms of such loans are not prima facie prejudicial to the interest of the Company. Maximum amount outstanding at any time during the year was Rs 100 lakhs. These loans have been fully repaid during the year.

iv. In our opinion and according to the information and explanation 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 purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. Based on audit procedures applied by us and according to the information and explanations provided by the Management, the transactions that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered. 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 by Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public and consequently, the provisions of Section 58A and 58AA and any other relevant provisions of the Companies Act, 1956 are not attracted.

vii. The Company has an Internal Audit System commensurate with the size and nature of its business.

viii. The Central Government has prescribed maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956 in respect of Lead Acid Batteries manufactured by the Company. However we have not carried out detailed examination of such records

ix. (a) On the basis of our examination of the Books of Account, the Company has been regular in depositing with appropriate authorities undisputed statutory dues including Employees Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Wealth Tax, cess and Investor Education and Protection Fund and other material statutory dues.

(b)According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Cess and Customs Duty that have not been deposited with the appropriate authorities for more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of, Income Tax, Service Tax, Sales Tax, Customs Duty, Cess, Wealth Tax and Excise Duty that have not been deposited with the appropriate authorities on account of any dispute.

x. The company's accumulated losses has not exceeded 50% of its net worth as at the end of the financial year . The company has not incurred cash losses in the current financial year as well as in the immediately preceding financial year.

xi. Based on our audit procedures and on the basis of information and explanations given by the Management, the Company has not defaulted in repayment of dues to banks and financial institutions. The Company has not issued any debentures.

xii. Based on our examination of documents and records, 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 fund, nidhi, mutual benefit fund or a society.

xiv. The Company is not dealing or trading in shares, securities, debentures and other Investments.

xv. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. The company has availed Hire Purchase Loans from the Banks during the year. The said loan availed during the year has been applied for the purpose for which they were granted.

xvii. According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have not been used for long term investment.

xviii. During the year the company has not made any preferential allotment of shares.

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

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

xxi. Based on audit procedures performed and information and explanations given by the Management, we report that no fraud on or by the Company has been noticed or reported during the year.

For M/s. R. SUBRAMANIAN AND COMPANY

Chartered Accountants

Firm Registration No. 004137S

A. GANESAN

Partner

Membership No. 21438

Chennai

May 30, 2012


Mar 31, 2011

We have audited the attached Balance Sheet of M/s. HIGH ENERGY BATTERIES (INDIA) LIMITED for the year ended 31st March 2011 and also the Profit & Loss account and 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.

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 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.

We report that 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.

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.

The Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this Report are in agreement with the Books of Account.

In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow statement dealt

with by this Report comply with the Accounting Standards, referred to in Sec 211(3C) of the Companies Act, 1956.

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

In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, read together with the Notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with 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, 2011; and

b) In the case of the Profit and Loss Account, of the LOSS for the financial 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

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 have further to report as under.

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets. These Fixed Assets have been physically verified by the Management on

a regular programme, which in our opinion is reasonable having regard to the size of the Company and nature of its Assets. No significant discrepancies were noticed on such verification. During the year the company has disposed off a piece of vacant land . However this will not impact the operations of the company in any way.

ii. The stock of Finished Goods, stores spare parts and raw materials except stock lying with third parties, for which confirmation have been sought for, have been physically verified during the year by the Management. In our opinion, the frequency and procedure of physical verification is reasonable and adequate in relation to the size of the Company and the nature of its business. The Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not significant, and the same have been properly dealt with in the Books of Account.

iii. (a) The Company has not granted any loans, secured / unsecured to companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b)The Company has taken unsecured loans aggregating to Rs 100 lakhs from two companies listed in the register maintained under Section 301 of the Companies Act 1956. The terms of such loans are not prima facie prejudicial to the interest of the Company. Maximum amount outstanding at any time during the year was Rs 100 lakhs.

iv. In our opinion and according to the information and explanation 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 purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. Based on audit procedures applied by us and according to the information and explanations provided by the Management, the transactions that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered. 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 by Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public and consequently, the provisions of Section 58A and 58AA and any other relevant provisions of the Companies Act, 1956 are not attracted.

vii. The Company has an Internal Audit System commensurate with the size and nature of its business.

viii. The Central Government has prescribed maintenance of Cost Records under Section 209(1)(d) of the Companies Act, 1956 in respect of Lead Acid Batteries manufactured by the Company. However we have not carried out detailed examination of such records

ix. (a) On the basis of our examination of the Books of Account, the Company has been regular in depositing with

appropriate authorities undisputed statutory dues including Employees Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Wealth Tax, Cess and Investor Education and Protection Fund and other material statutory dues.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Cess and Customs Duty that have not been deposited with the appropriate authorities for more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of,Income Tax, Service Tax, Sales Tax, Customs Duty, Cess, Wealth Tax and Excise Duty that have not been deposited with the appropriate authorities on account of any dispute.

x. The companys accumulated losses has not exceeded 50% of its net worth as at the end of the financial year . The company has not incurred cash losses in the current financial year and in the immediately preceding financial year has incurred cash losses.

xi. Based on our audit procedures and on the basis of information and explanations given by the Management, the Company has not defaulted in repayment of dues to banks and financial institutions. The Company has not issued any debentures.

xii. Based on our examination of documents and records, 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 fund, nidhi, mutual benefit fund or a society.

xiv. The Company is not dealing or trading in shares, securities, debentures and other Investments.

xv. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. The company has availed term loan during the year. The term loan availed during the current year have been applied for the purpose for which they were granted.

xvii. According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have not been used for long term investment.

xviii. During the year the company has not made any preferential allotment of shares.

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

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

xxi. Based on audit procedures performed and information and explanations given by the Management, we report that no fraud on or by the Company has been noticed or reported during the course of audit.





For M/s. R. SUBRAMANIAN AND COMPANY Chartered Accountants Firm Registration No. 004137S



R. RAJARAM Partner Membership No. 25210

Chennai May 28, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of M/s. HIGH ENERGY BATTERIES (INDIA) LIMITED for the year ended 31st March 2010 and also the Profit & Loss account and Cash Flow statements 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.

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 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.

We report that 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.

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.

The Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this report are in agreement with the Books of Account.

In our opinion, the Balance Sheet, Profit and Loss account and Cash Flow statement dealt

with by this Report comply with the Accounting Standards, referred to in Sec 211 (3C) of the Companies Act, 1956.

On the basis of written representations received from the Directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2010, from being appointed as a Director in terms of Clause (g) of Sub Section (1) of Section 274 of the Companies Act, 1956.

In our opinion and to the best of our information and according to the explanations given to us, the said Accounts, read together with the Notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with 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, 2010; and

b) In the case of the Profit and Loss Account, of the LOSS for the financial 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.

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 have further to report as under:

i. The Company has maintained proper records showing full particulars, including quantitative details and situation of Fixed Assets. These Fixed Assets have been physically verified by the Management on

a regular programme, which in our opinion is reasonable having regard to the size of the Company and nature of its Assets. No significant discrepancies were noticed on such verification. No significant fixed assets have been disposed off during the year.

ii. The stock of Finished Goods, stores and spare parts and raw materials except stock lying with third parties, for which confirmation have been sought for, have been physically verified during the year by the Management. In our opinion, the frequency and procedure of physical verification is reasonable and adequate in relation to the size of the Company and the nature of its business. The Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not significant, and the same have been properly dealt with in the Books of Account.

iii. (a) The Company has not granted any loans, secured / unsecured to companies, firm or other parties covered in the register maintained under Section 301 of the Companies Act 1956.

(b) The Company has taken unsecured loans aggregating to Rs 150 lakhs from two companies listed in the register maintained under Section 301 of the Companies Act 1956. The terms of such loans are not prima facie prejudicial to the interest of the Company. The company has repaid Rs 100 lakhs during the year and a sum of Rs 50 lakhs was outstanding at the end of the year. Maximum amount outstanding at any time during the year was Rs 150 lakhs.

iv. In our opinion and according to the information and explanation 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 purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

v. Based on audit procedures applied by us and according to the information and explanations provided by the Management, the transactions that needed to be entered into the register maintained under Section 301 of the Companies Act, 1956 have been so entered. 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 by Section 301 of the Companies Act, 1956 have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

vi. The Company has not accepted any deposits from the public and consequently, the provisions of Section 58A and 58AA and any other relevant provisions of the Companies Act, 1956 are not attracted.

vii. The Company has an Internal Audit System commensurate with the size and nature of its business.

viii. The Central Government has prescribed maintenance of Cost Records under Section 209(1 )(d) of the Companies Act, 1956 in respect of Lead Acid Batteries manufactured by the Company. However we have not carried out detailed examination of such records

ix. (a) On the basis of our examination of the Books of Account, the Company has been regular in depositing with appropriate authorities undisputed statutory dues including Employees Provident Fund, Employees State

Insurance, Income Tax, Sales Tax, Customs Duty, Excise Duty, Wealth Tax, cess and InvestorEducation and Protection Fund and other material statutory dues.

(b) According to the information and explanations given to us, there are no undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Cess and Customs Duty that have not been deposited with the appropriate authorities for more than six months from the date they became payable.

(c) According to the information and explanation given to us, there are no dues of, Income Tax, Service Tax, Sales Tax, Customs Duty, Cess, Wealth Tax and Excise Duty that have not been deposited with the appropriate authorities on account of any dispute.

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

xi. Based on our audit procedures and on the basis of information and explanations given by the Management, the Company has not defaulted in repayment of dues to banks and financial institutions. The Company has not issued any debentures.

xii. Based on our examination of documents and records, 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 fund, nidhi, mutual benefit fund or a society.

xiv. The Company is not dealing or trading in

shares, securities, debentures and other Investments.

xv. The Company has not given any guarantee for loans taken by others from banks or financial institutions.

xvi. The company has availed the balance term loans sanctioned during the earlier year. The term loan availed during the year have been applied for the purpose for which they were sanctioned.

xvii. According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that funds raised on short term basis have not been used for long term investment.

xviii.The Company has issued shares on rights basis to the existing shareholders and shares have been alloted to parties/ companies covered in the register maintained under section 301 of the Companies Act, 1956. The terms of such issue are not prima facie prejudicial to the interest of the Company.

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

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

xxi. Based on audit procedures performed and information and explanations given by the Management, we report that no fraud on or by the Company has been noticed or reported during the year.

For M/s. R. SUBRAMANIAN AND COMPANY

Chartered Accountants

Firm Registration No. 004137S

A. GANESAN

Partner

Membership No. 21438

Chennai

May 29, 2010

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