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Auditor Report of HIL Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of HIL Limited ("the Company"), which comprise the Balance Sheet as at March 31,2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the 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 thereunder. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances 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 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 financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India of the state of affairs of the Company as at March 31,2015, its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 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 March 31,2015 taken on record by the Board of Directors, none of the directors is disqualified as on March 31,2015 from being appointed as a director in terms of Section 164 (2) of the Act; and

f) With respect to the other matters to be included in the Auditor's Report in accordance with Rule

11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

I. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 33 to the financial statements;

II. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses; and

III. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Re: HIL Limited ('the Company') (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

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

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

(c) The Company is maintaining proper records of inventory. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) According to the information and explanations given to us, 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 Companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a) and (b) of the Order are not applicable to the Company and hence not commented upon.

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

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

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the manufacture of Building products, Thermal insulation products, and generation of Wind power and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(vii) (a) Undisputed statutory dues including provident

fund, employees' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.

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

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

Name of the Nature of Amount Period to which statute dues (RsIn lacs) amount relates

Tamil Nadu Sales tax on 15.01 1990-91, 1994-95, General enhanced Sales Tax Act,1959 turnover due to 1997-98, 2000-01, and Central Sales certain disallowance 2001-02, 2002-03 Tax Act, 1956

Andhra Pradesh Disallowance of 374.19 1985-86, 2009-10, General Sales concessional rate of tax 2010 - 11 Tax Act, 1957

Name of the statute Forum where dispute is pending

Tamil Nadu Hon'ble Supreme Court of India, Sales Tax General Appellate Tribunal, Appellate Assistant Sales Tax Act,1959 Commissioner and Central Sales Tax Act, 1956

Andhra Pradesh Hon'ble High Court of Telengana and Andhra General Sales Pradesh, Appellate Deputy Commissioner Tax Act, 1957

Name of the Nature of Amount Period to which statute dues (RsIn lacs) amount relates

West Bengal Sales Sales tax demand 265.85 2001-02, 2002-03, Tax Act,1994 and 2003-04, 2004-05, Central Sales Tax 2005-06, 2007-08, Act, 1956 2008-09

Bihar Finance Act, Local sales tax 140.05 2000 - 01,2009-10 1981 demand

Demand of entry tax 28.57 2003-04

Sales tax demand 28.04 2002-03, 2003-04,

2004-05, 2005-06

Entry Tax of Goods Demand for entry tax 74.42 2007-08 Act, 1930 including Interest

Other States/ Local sales tax 425.32 1993-94, 1997-98, Central Sales demand,freight rebate 1999-00, 2000-01, Tax Acts disallowed, entry tax 2001-02, 2002-03, on stock transfers and 2004-05, 2005-06, miscellaneous 2006-07, 2007-08, disallowance 2008-09, 2009-10, 2010 - 11,2011-12, 2012- 13

Other States like Sales tax demand 1411.15 2004-05, 2007-08, Jharkhand, 2008-09, 2009-10, Maharashtra and 2010-11,2011-12 Orissa under Central Sales Tax Act, 1956

Central Excise Act, Excise duty demand 882.27 2003-04, 2004-05, 1944 due to certain 2005-06, 2006-07, disallowance and wrong availment of 2007-08, 2008-09, CENVAT including 2009-10, 2010-11, penalty 2011-12, 2012-13, 2013- 14,2014-15

Excise duty demand 1040.34 April 2004 - including penalty July 2009

Income Tax Act, Income tax demand 1925.33 2005-06, 2008-09 1961 2009-10, 2010-11 2011-12

Wealth tax demand 56.98 1993-94, 1994-95 1995-96, 1996-97 1997-98

Name of the statute Forum where dispute is pending

Tamil Nadu General Honble Supreme Court of India Sales Tax Appellate Sales Tax Act 1959 Tribunal, Appellate Assistant Commissioner

Andhra Pradesh Honble High Court of Telenganan And Andhra Pradesh General Sales Tax Appellate Deputy Commissioner Act 1957

West Bengal Sales Tax Hon'ble High Court of West Bengal, Kolkata, Act 1956 Appellate and revisional Board, Senior Joint Commissioner, Additional Commissioner, Sales tax Appellate Tribunal

Bihar Finance Act, Joint Commissioner of Commercial taxes (Appeals), 1981: Commissioner of commercial taxes

Assistant Commissioner of Commercial Taxes

Deputy Commissioner, Joint Commissioner, Commissioner of Commercial Taxes

Entry Tax of Goods Hon'ble Supreme Court of India Act 1930

Other States/ Central Hon'ble Supreme Court of India Sales Tax Acts: Hon'ble High Court of Rajasthan, Appellate Tribunal, Commissioner of Commercial Taxes, Additional Commissioner (Appeals), Deputy Commissioner (Revision), Deputy Commissioner (Appeals), Joint Commissioner (Appeals), Joint Commissioner, Additional Commissioner, Assistant Commissioner (Appeals), Joint Director Enforcement, Joint Commissioner of Commercial taxes

Other States like Commissioner of Commercial Taxes, Jharkhand, Deputy Commissioner (Revision), Maharashtra and Additional Commissioner (Appeals) Orissa under Central Sales Tax Act, 1956:

Central Excise Assistant Commissioner, Joint Commissioner, Act, 1944 Additional Commissioner,Appellate Tribunal, Commissioner(Appeals), Customs Excise & Service Tax Appellate Tribunal, Commissioner of Customs & Central Excise Customs Excise and Service Tax Appellate Tribunal

Income Tax Act,1961 Income Tax Appellate Tribunal, Commissioner of Income Tax (Appeals)

Hon'ble High Court of Telangana and Andhra Pradesh, Hyderabad

Net of Rs 5.29 lacs, Rs 172.12 lacs, Rs 36.14 lacs, Rs 129.59 lacs, Rs 101.16 lacs, Rs 20.00 lacs, Rs 17.50 lacs and Rs 597.50lacs respectively paid under protest/adjustable against refunds.

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

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

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

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

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

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

For S R BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number:101049W

per Vikas Kumar Pansari Partner Membership No. 093649

Place : New Delhi Date : April 27, 2015


Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of HIL Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act, 1956, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

Opinion

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

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

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

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

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 43 of financial statements, regarding excess managerial remuneration amounting to Rs.116.90 lacs paid to Managing Director in excess of limits prescribed under Schedule XIII of the Companies Act, 1956. As represented to us by the management, the Company is in the process of filing application to the Central Government for the approval of such excess remuneration. The ultimate outcome of the above matter cannot presently be determined, accordingly no adjustments has been made in the financial statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

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

Annexure referred to in paragraph 1 of our report of even date

Re: HIL Limited

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

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

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

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

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

(c) The Company is maintaining proper records of inventory. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, 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. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(e) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.

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

(v) (a) According to the information and explanations provided by the Management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.

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

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

Name of the Nature of dues Amount Period to which statute (Rs. in lacs) the amount relates

Tamil Nadu General Sales tax on enhanced 15.01* 1990-91, 1994-95, Sales Tax Act, 1959 turnover due to 1997-98, 2000-01, & Central Sales Tax certain disallowance 2001-02, 2002-03 Act, 1956

Andhra Pradesh Disallowance of 105.54* 1985-86 General Sales Tax Act, Concessional Rate 2009-10 1957 of Tax

West Bengal Sales Sales Tax Demand 265.85 2001-02, 2002-03, Tax Act,1994, 2003-04 2004-05, Central Sales Tax 2005-06, 2007-08 Act, 1956 2008-09

Bihar Finance Act, Local Sales Tax 109.63 2000-01 1981 Demand

Bihar Finance Act, Demand of Entry Tax 28.57 2003-04 1981

Bihar Finance Act, Sales Tax Demand 28.04 2002-03, 2003-04, 1981 2004-05, 2005-06

Entry Tax of Goods Demand of Entry Tax including 74.42* 2007-08 Act,1930 Interest

Other State/ Central Local Sales Tax Demand, 313.09* 1993-94, 1997-98, Sales Tax Acts Freight Rebate disallowed, 1999-00, 2000-01, Entry Tax on Stock Transfers 2001-02, 2002-03, & Misc. Disallowance 2004-05, 2005-06, 2006-07, 2007-08 2008-09, 2012-13

Other States like Sales Tax Demand 127.84* 2004-05, 2007-08 Jharkhand, Maharastra 2008-09 under Central Sales Tax Act, 1956

Central Excise Excise Duty Demand 861.05* 2003-04, 2004-05, Act,1944 due to certain disallowance 2005-06 2006-07, and wrong availment of 2007-08, 2008-09, CENVAT 2009-10, 2010-11, 2011-12, 2012-13, 2013-14

Name of the statute Forum where dispute is pending

Tamil Nadu General Hon''ble Supreme Court of India, Sales Tax Act, 1959 Sales Tax Appellate Tribunal, & Central Sales Tax Appellate Asst. Commissioner Act, 1956

Andhra Pradesh Hon''ble High Court General Sales Tax Act, of Andhra Pradesh 1957 Appellate Deputy Commissioner

West Bengal Sales Hon''ble High Court of Tax Act,1994, West Bengal, Kolkata, Appellate & Revisional Board, Central Sales Tax Act, 1956 Senior Joint Commissioner, Additional Commissioner, Sales tax Appellate Tribunal

Bihar Finance Act, Joint Commissioner of 1981 Commercial Taxes (Appeals)

Bihar Finance Act, Assistant Commissioner of 1981 Commercial Taxes

Bihar Finance Act, Deputy Commissioner, Joint Commissioner, 1981 Commissioner of Commercial Taxes

Entry Tax of Goods Hon''ble Supreme Act, 1930 Court of India Other State/Central Hon''ble Supreme Court of India, Sales Tax Acts Hon''ble High Court of Rajasthan, Appellate Tribunal, Commissioner of Commercial Tax, Additional Commissioner (Appeals), Deputy Commissioner (Revision), Joint Commissioner (Appeals), Joint Commissioner, Additional Commissioner, Assistant Commissioner (Appeals), Joint Director Enforcement, Joint Commissioner of Commecial taxes

Other States like Commissioner of Commercial Jharkhand, Maharastra Taxes, Deputy Commissioner under Central Sales (Revision) Tax Act, 1956

Central Excise Assistant Commissioner, Joint Act,1944 Commissioner, Additional Commissioner, Appelate Tribunal, Commissioner (Appeals), Customs Excise & Service Tax Appellate Tribunal, Commissioner of Customs & Central Excise

Name of the Nature of dues Amount Period to which statute (Rs. in lacs) the amount relates

Central Excise Excise Duty Demand 1,040.34* April 2004-July 2009 Act,1944 including Penalty

Income Tax Act, 1961 Income Tax Demand 1,824.97* 2005-06, 2008-09 2009-10, 2010-11

Income Tax Act, 1961 Wealth Tax Demand 56.98 1993-94 to 1997-98

Name of the status Forum where dispute is pending

Central Excise Act,1944 Customs Excise & Service Tax Appellate Tribunal

Income Tax Act,1961 Income Tax Appellate Tribunal, Commissioner of Income Tax (Appeals)

Income Tax Act, 1961 Hon''ble High Court of Andhra Pradesh, Hyderabad

*net of Rs.5.29 lacs, Rs.14.86 lacs, Rs.36.14 lacs,Rs.169.69 lacs, Rs.15.00 lacs, Rs.20.00 lacs, Rs.17.50 lacs and Rs.562.67 lacs respectively paid under protest/adjustable against refunds.

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

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

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

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

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

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

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

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long- term investment.

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

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

(xx) The Company has not raised any money through public issue.

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

For S.R. BATLIBOI & ASSOCIATES LLP

CHARTERED ACCOUNTANTS

ICAI Firm Registration Number: 101049W

Per Vikas Kumar Pansari

Place : New Delhi Partner

Dated : 8th May, 2014 Membership No.093649


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of HIL Limited (formerly Hyderabad Industries Limited) ("the Company"), which comprise the Balance Sheet as at March 31, 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 accounting principles generally accepted in India, including the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk 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 March 31, 2013;

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

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

Annexure referred to in paragraph 1 of our report of even date

Re: HIL Limited (formerly Hyderabad Industries Limited)

(i) (a) The Company has maintained proper records

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

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

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

(ii) (a) The Management has conducted physical

verification of inventory at reasonable intervals during the year.

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

(c) The Company is maintaining proper records of inventory. Discrepancies noted on physical verification of inventories were not material, and have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations

given to us, 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. Accordingly, the provisions of clause 4(iii)(a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(e) According to information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Act. Accordingly, the provisions of clause 4(iii)(e) to (g) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the

purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the Management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956, for the products of the Company.

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

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

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

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

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

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

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

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

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long- term investment.

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

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

(xx) The Company has not raised any money through public issue.

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

For S.R. BATLIBOI & ASSOCIATES LLP

CHARTERED ACCOUNTANTS ICAI

Firm Registration Number: 101049W

Per Vikas Kumar Pansari

Place : New Delhi Partner

Dated : 3rd May, 2013 Membership No.093649


Mar 31, 2011

1. We have audited the attached Balance Sheet of Hyderabad Industries Limited (the Company) as at March 31, 2011 and also the Profit and Loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

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

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

a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2011;

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

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

Annexure referred to in paragraph 3 of our report of even date Re: Hyderabad Industries Limited (the Company)

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

(b) The Company has a policy of carrying out the physical verification of fixed assets in a phased manner to cover all fixed assets over a period of three years. Accordingly, some of the fixed assets have been verified during the year. No material discrepancies were noticed on such verification. The frequency of physical verification in our opinion is reasonable having regard to the size of the Company and the nature of its assets.

(c) There was no substantial disposal of fixed assets during the year.

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

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

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

(iii) (a) The Company has granted loan to a party covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.508.17 Lacs and the year end balance of loans granted to such parties was Rs.Nil.

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

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

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

(e) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii) (e) to (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.

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

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

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

Name of the Nature of dues Amount statute (Rs. in lacs)

Tamil Nadu General Sales tax on enhanced 10.41 Sales Tax Act, 1959 turnover due to & Central Sales Tax certain disallowance Act, 1956

Tamil Nadu General Sales tax Deferment 7.48 Sales Tax Act, 1959 not allowed & Central Sales Tax Act, 1956

Andhra Pradesh Disallowance of Concessional 1.53 General Sales Tax Rate of Tax Act, 1957

West Bengal Sales Sales Tax Demand 265.92 Tax Act,1994, Central Sales Tax Act, 1956

Bihar Finance Act, Local Sales Tax Demand 699.57 1981

Bihar Finance Act, Demand of Entry Tax 28.57 1981

Bihar Finance Act, Sales Tax Demand 23.44 1981

Entry Tax of Goods Demand of Entry Tax 96.23 Act, 1930 including Interest

Other State/Central Local Sales Tax Demand, 250.55 Sales Tax Acts Freight Rebate disallowed, Entry Tax on Stock Transfers & Misc. Disallowance

Other States like Sales Tax Demand 348.36 Jharkhand, Maharastra under Central Sales Tax Act, 1956.

Central Excise Act, Excise Duty Demand 11.11 1944 due to certain disallowance

Central Excise Excise Duty 1110.32 Act,1944 Demand including Penalty

Income Tax Act, Wealth Tax Demand 56.98 1961



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

Tamil Nadu General 1990-91, 1994-95, Honble Supreme Sales Tax Act, 1959 1997-98, 2000-01, Court of India, & Central Sales Tax 01-02 & 02-03 Sales Tax Appellate Act, 1956 Tribunal, Appellate Asst. Commissioner, Chennai

Tamil Nadu General 2000-01, Appellate Assistant Sales Tax Act, 1959 2001-02 & 2002-03 Commissioner, & Central Sales Tax Chennai Act, 1956

Andhra Pradesh 1985-86 Honble High General Sales Tax Court of Act, 1957 Andhra Pradesh

West Bengal Sales 2001-02, 2002-03, Honble High Tax Act,1994, 2003-04 2004-05, Court of Central Sales Tax 2005-06 West Bengal, Act, 1956 Kolkata, Appellate & Revisional Board

Bihar Finance Act, 2000-01, 2001-02, Joint Commissioner 1981 2002-03 of Commercial Taxes (Appeals), Jharkhand

Bihar Finance Act, 2003-04 Assistant Commissioner 1981 of Commercial Taxes

Bihar Finance Act, 2002-03, 2003-04 Dy. Commissioner, 1981 Dhanbad

Entry Tax of Goods 2007-08 Honble High Court Act, 1930 of Allahabad, Lucknow

Other State/Central 1993-94, 1997-98, Deputy Commissioner Sales Tax Acts 1999-2000, 2000-01 (Appeals),Honble High Court of Rajasthan, 2001-02, 2004-05, M P Commercial Tax Appellate 2005-06, 2006-07, Tribunal, Deputy Commissioner 2007-08 Commercial Tax (Appeals),

Commissioner of Commercial Taxes Jharkhand, Assisstant Commissioner ST (Appeals) Bhubaneshwar, Appellate Authority Commercial Taxes Ghaziabad, Deputy Commissioner (Revision) Thane, Honble Supreme Court of India, Additional Commissioner (Sales Tax) Berhampur. Sr.Joint Commissioner Sales Tax West Bengal, Joint Commissioner (Appeals) Dhanbad, Joint Director Enforcement Jalandhar, Excise Taxation Officer Chandigarh, Joint Commissioner Appeals Ghaziabad.

Other States like 2004-05, 2005-06, Commissioner of Jharkhand, Maharastra 2006-07 & 2007-08 Commercial Taxes, under Central Sales Jharkhand, Tax Act, 1956. Dy. Commissioner (Revision), Thane

Central Excise Act, 1988-89, 1990-91, Commissioner of 1944 Central Excise, 1994-95, 1996-97 New Delhi, Commissioner Appeals & 1997-98 of Central Excise, West Bengal & Commissioner of Central Excise, West Bengal

Central Excise April 2004- Act,1944 Dec. 2008, Commissioner of Appeals, 2007-08, 2008-09, Customs Excise & Service 2009-10 Tax Appellate Tribunal

Income Tax Act, 1993-94 to 1997-98 Honble High 1961 Court of Andhra Pradesh, Hyderabad.

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

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

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

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

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

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

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

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long- term investment.

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

(xix) According to information and explanations given to us, during the period covered by our audit report, the Company had issued 15 unsecured non convertible debentures of Rs.100 lacs each. However the same were redeemed during the year.

(xx) The Company has not raised any money through a public issue during the year.

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



For S.R. BATLIBOI & ASSOCIATES CHARTERED ACCOUNTANTS Firm registration number: 101049W

Per Vikas Kumar Pansari Partner Membership No.: 093649

Place : New Delhi Dated : April 27, 2011


Mar 31, 2010

1. We have audited the attached balance sheet of Hyderabad Industries Limited as at March 31, 2010 and also the profit and loss account and the cash flow statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Order, 2003 (as amended) issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in para 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, profit and loss account and cash flow statement dealt with by this report are in agreement with the books of account;

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

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

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

(a) in the case of the balance sheet, of the state of affairs of the Company as at March 31, 2010;

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

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

Annexure referred to in paragraph 3 of our report of even date Re: Hyderabad Industries Limited

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

(b) The Company has a policy of carrying out the physical verification of fixed assets in a phased manner to cover all fixed assets over a period of three years. Accordingly, some of the fixed assets have been verified during the year. As informed, no material discrepancies were noticed on such verification. The frequency of physical verification in our opinion is reasonable having regard to the size of the Company and nature of its assets.

(c) There was no substantial disposal of fixed assets during the year.

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

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

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

(iii) (a) As informed, 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 Companies Act, 1956. Therefore, the provisions of clause 4(iii) (a) to (d) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(b) As informed, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Therefore, the provisions of clause 4(iii) (e) to (g) of the Companies (Auditors Report) Order, 2003 (as amended) are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in Section 301 of the Act that need to be entered into the register maintained under Section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

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

(viii) To the best of our knowledge and as explained, the Central Government has not prescribed maintenance of cost records under clause (d) of Sub-Section (1) of Section 209 of the Companies Act, 1956 for the products of the Company.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, or employees state insurance, income-tax, sales-tax, wealth-tax, service-tax, customs-duty, excise-duty and cess have generally been regularly deposited with the appropriate authorities though there has been a slight delay in a few cases.

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

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

Name of the Nature of dues Amount statute (Rs. in lacs)

Tamil Nadu General Sales tax on enhanced 1.01 Sales Tax Act, 1959 turnover due to (Local) certain disallowance

Tamil Nadu General Sales tax on enhanced 6.64 Sales Tax Act, 1959 turnover due to certain disallowance

Kerala Value Added Demand for sales tax 7.79 Tax Act, 2003

Rajasthan Sales Tax, Local Sales tax demand 59.75 1994

Madhya Pradesh Freight rebate disallowed 2.11 VAT Act, 2002

Central Sales Tax Sales tax on enhanced 0.96 Act, 1956. turnover due to certain disallowance

Central Sales Tax Sales tax on enhanced 1.80 Act, 1956. turnover due to certain disallowance

Orissa Sales Tax Entry tax on stock transfer 0.78 Act, 1947 and miscellaneous disallowance

Andhra Pradesh Sales Disallowance of concessional 1.53 Tax Act, 1957 sales tax rate

Central Excise Act, Excise duty demand for 8.37 1944 disallowance of modvat

Central Excise Act, Excise duty demand 2.36 1944

Jharkhand Sales Local sales tax demand 1.38 Tax Act,

West Bengal Sales Local Sales tax demand 0.58 Tax Act, 1994

Tamil Nadu General Sales tax deferment 4.24 Sales Tax Act, 1959 not allowed

Central Sales Tax Sales tax deferment 3.24 Act, 1956 not allowed

Central Excise Excise duty demand 0.38 Act, 1944

Punjab Sales Sales tax demand 0.14 Tax Act, 1956

U.P. Trade Act 1948 Sales tax demand 1.02

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

Tamil Nadu General Sales Tax Act, 1959 (Local) 1990-91 Honble Supreme Court of India

Tamil Nadu General Sales Tax Act, 1959 1997-98, 2000-01 Sales Tax Appellate & 2002-03 Tribunal, Chennai

Kerala Value Added Tax Act, 2003 2005-06 Honble High Court of 2005-06 Kerala

Rajasthan Sales Tax, 1994 Nov 2006 to Honble High Court of Mar 2007 Rajasthan

Madhya Pradesh VAT Act, 2002 2006-07 Deputy Commissioner Commercial Taxes (Appeals)

Central Sales Tax Act, 1956. 2001-02 Sales Tax Appellate Tribunal, Chennai

Central Sales Tax Act, 1956. 1994-95, 2001-02 Appellate Assistant and 2002-03 Commissioner, Chennai

Orissa Sales Tax Act, 1947 1993-94, 1999-2000 Assistant Commissioner ST and 2001-2002 (Appeals), Bhubaneshwar

Andhra Pradesh Sales Tax Act, 1957 1985-86 Honble High Court of Andhra Pradesh

Central Excise Act, 1944 1990-91,1994-95 Commissioner of Central Excise, and 1996-97 West Bengal

Central Excise Act, 1944 1997-98 Commissioner Appeals of Central Excise, West Bengal

Jharkhand Sales Tax Act, 1997-98 Deputy Commissioner Commercial Taxes, Jharkhand

West Bengal Sales Tax Act, 1994 2000-01 Deputy Commissioner Commercial Taxes, West Bengal

Tamil Nadu General Sales Tax Act, 1959 2001-02 and Appellate Assistant 2002-03 Commissioner, Chennai

Central Sales Tax Act, 1956 2000-01 to Appellate Assistant 2002-03 Commissioner, Chennai

Central Excise Act, 1944 1988-89 Commissioner of Central Excise, New Delhi

Punjab Sales Tax Act, 1956 2001-02 Joint Director of Sales Tax Authority, Punjab

U.P. Trade Act 1948 1997-98 Honble High Court of Allahabad (Lucknow)



Name of the Nature of dues Amount statute (Rs. in lacs)

Tamilnadu General Sales Additional Sales tax 2.53 Tax Act,1959 (Local)

Kerala Value Added Sales tax demand 0.25 Tax Act, 2003

Jharkhand Sales Local sales tax demand 99.89 Tax Act

Bihar Finance Local sales tax demand 699.57 Act, 1981

Bihar Finance Demand for entry tax 28.57 Act, 1981

West Bengal Sales Sales tax demand 13.50 Tax Act, 1994

Central Sales Tax Sales tax demand 4.18 Act, 1956

West Bengal Sales Sales tax demand 129.56 Tax Act, 1994

Central Sales Tax Sales tax demand 48.29 Act, 1956

West Bengal Sales Sales tax demand 59.23 Tax Act, 1994

Central Sales Tax Sales tax demand 15.75 Act, 1956

West Bengal VAT Sales tax demand 4.90 Act, 2003

Central Sales Tax Sales tax demand 1.33 Act, 1956

Bihar Finance Sales tax demand 25.85 Act, 1981

West Bengal VAT Sales tax demand 0.82 Act, 2003

Central Sales Tax Sales tax demand 2.28 Act, 1956

Income Tax Act, Wealth Tax Demand 56.98 1961

Entry of Goods Demand for entry tax 86.11 Act, 1930 including interest

Central Excise Excise duty demand 1,012.80 Act, 1945 including penalty

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



Tamilnadu General Sales Tax Act,1959 (Local> 2002-03 Joint Commissioner (Revision), Chennai

Kerala Value Added Tax Act, 2003 2007-08 Deputy Commissioner Commercial Taxes (Appeals), Ernakulum

Jharkhand Sales Tax Act 1997-98 & Commissioner of 1999-2000 Commercial Taxes, Jharkhand

Bihar Finance Act, 1981 2000-01 to Joint Commissioner of 2002-03 Commercial Taxes (Appeal) Bihar Finance Act, 1981 2003-04 Assistant Commissioner of Commercial Taxes

West Bengal Sales Tax Act, 1994 2001-02 Addl. Commissioner (Revision), Commercial taxes

Central Sales Tax Act, 1956 2002-03 Joint Commissioner Commercial taxes, West Bengal

West Bengal Sales Tax Act, 1994 2003-04 West Bengal Commercial Taxes Appellate & Revisional Board

Central Sales Tax Act, 1956 2003-04 West Bengal Commercial Taxes Appellate & Revisional Board

West Bengal Sales Tax Act, 1994 2004-05 Deputy Commissioner (Appeals), W.B.S.T.

Central Sales Tax Act, 1956 2004-05 Deputy Commissioner (Appeals), W.B.S.T.

West Bengal VAT Act, 2003 2005-06 Deputy Commissioner (Sales Tax)

Central Sales Tax Act, 1956 2005-06 Deputy Commissioner (Sales Tax)

Bihar Finance Act, 1981 2002-03 & 2003-04 Joint Commissioner, Commercial taxes (Appeals), Dhanbad

West Bengal VAT Act, 2003 2006-07 Senior Joint Commissioner of Commercial Taxes

Central Sales Tax Act, 1956 2006-07 Senior Joint Commissioner of Commercial Taxes

Income Tax Act, 1961 1993-94 to 1997-98 Honble High Court of Andhra Pradesh, Hyderabad.

Entry of Goods Act, 1930 2007-08 Honble High Court of Allahabad (Lucknow)

Central Excise Act, 1945 April 2004 to Custom Excise & Service Tax December 2008 Appellate Tribunal

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holder.

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

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

(xiv) In our opinion 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 4(xiv) of the Order are not applicable to the Company.

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

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

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

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

(xix) According to the information and explanations given to us, during the period covered by our audit report, the Company had issued 15 unsecured non convertible debentures of Rs. 100 lacs each. However, the same were redeemed during the year.

(xx) The Company has not raised any money through a public issue during the year.

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



For S. R. BATLIBOI & CO. CHARTERED ACCOUNTANTS Firm Registration No.: 301003E

Per Anil Gupta Partner Membership No.: 87921

Place : New Delhi

Dated: 5th May, 2010

 
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