Auditor Report of Hinduja Foundries Ltd.

Mar 31, 2016

We have audited the accompanying financial statements of Hinduja Foundries Limited (''the Company''), which comprise the balance sheet as at March 31, 2016, the statement of profit and loss and the cash flow statement for the eighteen months period 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.

Auditors'' Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 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 financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2016 and its loss and its cash flows for the eighteen months period 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, a statement on the matters specified in the paragraph 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, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 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 32 to the financial statements;

ii. the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long- term contracts including derivative contracts;

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

The Annexure referred to in our Independent Auditors'' Report to the members of Hinduja Foundries Limited ("the Company") for the eighteen months period ended March 31, 2016, we report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. The Company is in the process of comprehensively compiling/updating the fixed asset register after incorporating the results of the physical verification.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the programme, certain fixed assets were verified during the period. The Company is in the process of reconciling some of the fixed assets counted with the fixed assets register. As explained to us the Company believes the difference, if any, will not be material.

(ii) (a) The inventory, except certain goods-in- transit and stocks lying with third parties, has been physically verified by the management during the period. In our opinion, the frequency of such verification is reasonable. For major portion of stocks lying with third parties at the period-end, written confirmations have been obtained by the Company.

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

(c) In relation to the maintenance of inventory records, the Company had during the previous periods initiated certain corrective steps including implementation of an ERP system, introduction of perpetual inventory system, identification of non - moving inventory, strengthening the documentation and controls regarding recording and usage of rejections and consumption of materials etc. During the current period the Company continued to further implement and strengthen the above corrective steps initiated and monitor the operating effectiveness of the measures taken. Discrepancies noted on verification between the physical stocks and book records were not material and have been accounted as consumption in the books.

(iii) The Company has not granted any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013 (''the Act'').

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories are for the Company''s specialised requirements and similarly certain goods sold or services rendered are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and services. In our opinion and according to the information and explanations given to us, further to the corrective action initiated to the matter referred to in clause ii (c) above, there is no continuing failure to correct major weaknesses in internal control system.

(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 and having regard to the comments in paragraph ii (c) above, we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the period by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues were in arrears as at March 31, 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the dues set out in Appendix I in respect of Income tax, Excise duty, Service tax, Customs duty and Sales tax have not been deposited by the Company on account of disputes.

(c) According to the information and explanations given to us, the amounts which were required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules thereunder has been transferred to such fund within time.

(viii) The Company''s accumulated losses at the end of the financial period have exceeded 50% of its net worth. The Company has incurred cash losses in the current financial period and in the preceding financial period.

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or to any financial institutions. The Company did not have any outstanding debentures during the period.

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

(xi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xii) According to the information and explanations/ confirmations given to us, no material fraud on or by the Company has been noticed or reported during the period.

Appendix I as regards to Paragraph vii (b) of Annexure to the Auditors'' Report

Nature of Period to which the Amount in Name of statute Forum where dispute is pending dues amount relates Lakhs

Central Excise Act, 1944 Excise duty 2011-2012 3.11 CESTAT

Central Excise Act, 1944 Excise duty 2010-2011 3.08 Commissioner (Appeals)

Additional Commissioner of Central CENVAT Credit Rules, 2004 Service tax 2014-2015 29.61 Excise

CENVAT Credit Rules, 2004 Excise duty 2014-2015 0.88 Assistant Commissioner

Assistant Commissioner of Central Excise CENVAT Credit Rules, 2004 Service tax 2014-2015 8.82

Commissioner of Central Excise

CENVAT Credit Rules, 2004 Excise duty 2014-2015 1.11 (Appeals)

CENVAT Credit Rules, 2004 Service tax 2010-2014 387.10 Commissioner

CENVAT Credit Rules, 2004 Service tax 2013-2014 6.63 Joint Commissioner of Central Excise

CENVAT Credit Rules, 2004 Service tax 2014-2015 96.60 Commissioner of Central Excise 2006-2007 and CENVAT Credit Rules, 2004 Service tax # 13.35 Commissioner (Appeals) 2013-2016

CENVAT Credit Rules, 2004 Service tax 2006-2015 # 786.80 CESTAT

CENVAT Credit Rules, 2004 Excise duty 2009-2015 # 9.01 CESTAT

CENVAT Credit Rules, 2004 Excise duty 1993-1998 # 22.63 Hon''ble High Court of Madras

Customs Customs Act, 1962 2006-2007 1.78 CESTAT duty

CST Act, 1956 Sales tax 2003-2005 71.09 Appellate Deputy Commissioner

CST Act, 1956 Sales tax 2014-15 # 44.60 TNSTAT

Finance Act , 1994 Service tax 2009-2011 # 335.31 CESTAT

Finance Act , 1994 Service tax 2010-2011 # 23.96 Commissioner (Appeals)

Commissioner of Central Excise

Finance Act , 1994 Service tax 2011 & 2013 # 1.34 (Appeals)

TNGST Act, 1959 Sales tax 1994-1998 # 43.47 Hon''ble High Court of Madras

Income Tax Act, 1961 Income 2008-2010 36.62 Assessing Officer tax

Income Commissioner of Income tax - Income Tax Act, 1961 2007-2013 1,742.66 tax Appeals

# net of amounts paid under protest

for B S R and Company Chartered Accountants

ICAI Firm''s Registration No.:128900W





S Sethuraman

Chennai Partner

May 11, 2016 Membership No: 203491

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Sep 30, 2014

We have audited the accompanying financial statements of Hinduja Foundries Limited (the "Company"), which comprise the balance sheet as at September 30, 2014, the statement of profit and loss and the cash flow statement for the eighteen months period then ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

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

Auditors'' responsibility

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

An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. Inmakingthoseriskassessments,theauditors consider 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 the 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 said financial statements 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 September 30, 2014;

(b) in the case of the statement of profit and loss, of the loss for the eighteen month period ended on that date; and

(c) in the case of the cash flow statement, of the cash flows for the eighteen month period ended on that date.

Emphasis of Matter

Attention is drawn to Note 2(a) to the financial statements which more fully discusses the going concern matters etc. The Company''s performance has been impacted by automotive market slowdown, inadequate price compensation, volatile material prices, delays in recovery of certain long pending balances and consequent extended working capital cycles. As a result, the Company has accumulated losses as at September 30, 2014 that have significantly eroded the networth. The Company has initiated various steps to improve its operational performance/ liquidity, remove bottlenecks relating to its projects, improve the networth including raising of capital etc.

Based on business plans, availability of short- term and long-term bank funding arrangements, independent impairment testing, increase in capital by way of preferential allotment and qualified institutional placement and in view of the continued support by the promoters including assistance in relation to certain long pending balances, the Company believes that it would be able to realize its assets and settle its liabilities in the normal course at their carrying values and that no adjustments would be required in respect of the carrying value of assets/liabilities as at September 30, 2014. Accordingly, the financial statements have been prepared on a going concern basis.

Our opinion is not qualified in respect of this matter.

Report on other legal and regulatory requirements

As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), 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.

Further to our comments to in the Annexure referred to above, 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 the books of account;

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

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

(e) On the basis of written representations received from the directors as at September 30, 2014, and taken on record by the board of directors, we report that none of the directors is disqualified as at September 30, 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 to the Independent Auditors'' Report (referred to in our report of even date)

The Annexure referred to in the Independent auditors'' report to the members of Hinduja Foundries Limited ("the Company") for the eighteen months period ended September 30, 2014. We report that:

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. The Company is in the process of comprehensively compiling/updating the fixed asset register after incorporating the results of the physical verification of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with the programme, certain fixed assets were verified during the period. The Company is in the process of reconciling some of the fixed asset counted with the fixed assets register. As explained to us the Company believes the difference, if any, will not be material.

(c) Fixed assets disposed of during the period were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory, except certain goods-in-transit and stocks lying with third parties, has been physically verified by the management during the period. In our opinion, the frequency of such verification is reasonable. For major portion of stocks lying with third parties at the period-end, written confirmations have been obtained by the Company.

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

(c) In relation to the maintenance of inventory records, the Company had during the previous year initiated certain corrective steps including implementation of an ERP system, introduction of perpetual inventory system, identification of non - moving inventory, strengthening the documentation and controls regarding recording and usage of rejections and consumption of materials etc. During the current year the Company continued to further implement and strengthen the above corrective steps initiated and monitor the operating effectiveness of the measures taken. Discrepancies noted on verification between the physical stocks and book records were not material and have been accounted as consumption in the books.

(iii) The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories are for the Company''s specialised requirements and similarly certain goods sold or services rendered are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and services. In our opinion and according to the information and explanations given to us, further to the corrective action initiated to the matter referred to in clause ii (c) above, there is no continuing failure to correct major weaknesses in internal control system.

(v) In our opinion and according to the information and explanations given to us, there are no contracts and arrangements, the particulars of which need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

(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 having regard to the comments in paragraph ii (c) above, we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales- tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues were in arrears as at September 30, 2014 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the dues set out in Appendix I in respect of Income tax, Excise duty, Service tax, and Sales tax have not been deposited by the Company on account of disputes.

(x) The Company''s accumulated losses at the end of the financial year have exceeded 50% of its net worth. The Company has incurred cash losses in the current financial year and in the preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or to any financial institutions. The Company did not have any outstanding debentures during the year.

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

(xiii) In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in

shares, securities, debentures and other investments. (xv) According to the information and explanations given to us, the Company has not given any guarantee

for loans taken by others from banks or financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

(xvii) In our opinion and according to the information and explanation given to us and on an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie not been used for long-term investment.

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

(xix) According to the information and explanations given to us, the Company has not issued any debentures.

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

(xxi) According to the information and explanations/ confirmations given to us, no material fraud on or by the Company has been noticed or reported during the period.

Appendix I as regards to Paragraph 9 (b) of Annexure to the Auditors'' Report

Nature of Statute Nature of Dues Period to which Amount the amount relates in lak Central Excise Act, 1944 Excise duty 2011-2012 3.11

Central Excise Act, 1944 Excise duty 2010-2011 3.08

Central Excise Act, 1944 Excise duty 2010 4.50

Cenvat Credit Rules, 2004 Excise duty 2009-2012 7.76

Cenvat Credit Rules, 2004 Excise duty 2006-2007 1.78

Cenvat Credit Rules, 2004 Excise duty 2006-2011 114.85

Cenvat Credit Rules, 2004 Service Tax 2010-2013 5.41

Cenvat Credit Rules, 2004 Service Tax 2012-2013 34.70

Cenvat Credit Rules, 2004 Excise duty 2004-2013 153.05

Cenvat Credit Rules, 2004 Service Tax 2006-2009 557.87

Cenvat Credit Rules, 2004 Excise duty 1993-1998 45.26

Cenvat Credit Rules, 2004 Service Tax 2009-2010 110.77

CST Act, 1956 Sales Tax 2003-2005 50.34

Finance Act, 1994 Service Tax 2009-2013 0.80

Finance Act, 1994 Service Tax 2011 4.76

Finance Act, 1994 Service Tax 2010-2011 2.59

Finance Act, 1994 Service Tax 2011-2012 42.60

Finance Act, 1994 Service Tax 2009-2010 274.30

Finance Act, 1994 Service Tax 2011 16.17

Finance Act 1994 Excise duty 2009-2010 0.84

Income Tax Act,1961 Income Tax 2005-2010 1,067.19

Natue of Statute Forum where dispute is pending

Central Excise Act, 1944 CESTAT

Central Excise Act, 1944 Commissioner (Appeals)

Central Excise Act, 1944 Assistant Commissioner of Central Excise

Cenvat Credit Rules, 2004 Commissioner of Central Excise -Appeals

Cenvat Credit Rules, 2004 CESTAT

Cenvat Credit Rules, 2004 Commissioner of Central Excise

Cenvat Credit Rules, 2004 Assistant Commissioner of Central Excise

Cenvat Credit Rules, 2004 Commissioner of Central Excise

Cenvat Credit Rules, 2004 Deputy Commissioner of Central Excise

Cenvat Credit Rules, 2004 CESTAT

Cenvat Credit Rules, 2004 Hon''ble High Court of Madras

Cenvat Credit Rules, 2004 Commissioner of Service Tax

CST Act 1994 Appellate Deputy Commissioner

Finance Act 1994 Commissioner of Central Excise - Appeals

Finance Act 1994 Deputy Commissioner of Central Excise

Finance Act 1994 Assistant Commissioner of Central Excise

Finance Act 1994 Commissioner of Central Excise

Finance Act 1994 Commissioner of Service Tax

Finance Act 1994 Additional Commissioner of Central Excise

Finance Act 1994 CESTAT

Finance Act 1994 Commissioner of Income tax - Appeals

# Excludes amount paid under protest of Rs. 61.13 Lakhs ## Excludes amount paid under protest of Rs. 31.55 Lakhs @ Excludes amount paid under protest of Rs. 50 Lakhs

for B S R and Company Chartered Accountants ICAI Firm Registration No.:128900W S Sethuraman Chennai Partner November 20, 2014 Membership No: 203491

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Mar 31, 2013

Report on the financial statements

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

Management''s responsibility for the financial statements

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

Auditors'' responsibility

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

An audit involves performing procedures to obtain audit evidence, about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider 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 the 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.

Basis for report modification in respect of corresponding previous year figures

Attention is invited to Note 38 to the financial statements which explains that the corresponding figures regarding the previous financial year ended September 30, 2012 includes the differences between book stock and physical stock (physical stock being lower than book stock) aggregating to Rs. 82.95 Crores arising out of the physical verification of inventory carried by the Company during the period ended September 30, 2012. As per the explanations from the management, such differences were predominantly due to ineffective process standards and inadequate documentation and controls in connection with recording and usage of rejections in the Company''s factories and recognition of consumption was based on physical inventories as at September 30,2012. Our reporting should be considered in relation to corresponding previous year figures in this context.

Opinion

In our opinion, and to the best of our information and according to the explanations given to us (including the matter relating to the corresponding previous financial year as above) the said financial statements 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, 2013;

(b) in the case of the Statement of Profit and Loss, of the loss for the year (six month period) ended on that date; and

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

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note 2 (a) to the financial statement which more fully discusses the going concern related matters. Based on the current business plans, subscription of additional share capital by promoters, independent impairment testing, availability of banking limits, etc., the Company believes that it would be able to meet its financial requirements and no adjustments would be required in respect of the carrying value of assets/liabilities. Accordingly, the financial statements have been prepared on a going concern basis.

Report on other legal and regulatory requirements

As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), 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.

Further to our comments to in the Annexure referred to above, 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 the books of account;

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

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

(e) On the basis of written representations received from the Directors as at March 31, 2013, and taken on record by the Board of Directors, we report that none of the Directors is disqualified as at 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.

The Annexure referred to in the Independent auditors'' report to the members of Hinduja Foundries Limited ("the Company") for the year (six months period) ended March 31, 2013. We report that:

1. (a) The Company has maintained records relating to fixed assets showing particulars including quantitative details and situation of its fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme certain fixed assets were verified during the period and as explained to us, no material discrepancies were noticed on such verification.

(c) Fixed assets disposed of during the period were not substantial, and therefore, do not affect the going concern assumption.

2. (a) The inventory, except goods-in-transit and stocks lying with third parties, has been physically verified by the management during the period. In our opinion, the frequency of such verification is reasonable. For major portion stocks lying with third parties at the period-end, written confirmations have been obtained.

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

(c) In relation to the maintenance of inventory records, during the current period, the Company has initiated certain corrective steps including implementation of an ERP system, introduction of perpetual inventory system, etc., and is in the process of further strengthening the documentation and controls regarding recording and usage of rejections and consumption of materials. Discrepancies noted on verification between the physical stocks and book records were not material and have been accounted as consumption in the books.

3. The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories are for the Company''s specialised requirements and similarly certain goods sold or services rendered are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and services. In our opinion and according to the information and explanations given to us, further to the corrective action initiated to the matter referred to in note 38 to the financial statements, there is no continuing failure to correct major weaknesses in internal control system.

5. In our opinion and according to the information and explanations given to us, there are no contracts and arrangements, the particulars of which need to be entered into the register maintained under Section 301 of the Companies Act, 1956.

6. The Company has not accepted any deposits from the public.

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

8. 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 having regard to the comments in paragraph 2 (c) above, we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

9. (a) According to the information and explanations given to us and on the basis of our examination of the records of the company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues were in arrears as at March 31, 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the dues set out in Appendix I in respect of Income tax, Excise duty, Service tax, and Sales tax have not been deposited by the Company on account of disputes.

10. The Company''s accumulated losses at the end of the financial year have exceeded 50% of its net worth. The Company has incurred cash losses in the current financial year and in the preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers or to any financial institutions. The Company did not have any outstanding debentures during the year.

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

13. In our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

16. In our opinion and according to the information and explanations given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

17. In our opinion and according to the information and explanation given to us and on an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie not been used for long-term investment.

18. The Company has not made any preferential allotment of shares to companies / firms / parties covered in the register maintained under Section 301 of the Companies Act, 1956.

19. According to the information and explanations given to us, the Company has not issued any debentures.

20. The Company has raised money by way of public issue (Rights Issue) during the earlier year as defined under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. We have verified the end- use of such money as applicable during the period and disclosed by the Company in the notes to the financial statements.

21. According to the information and explanations/ confirmations given to us, no material fraud on or by the Company has been noticed or reported during the period.



for B S R and Company

Chartered Accountants

Firm Registration No.: 128900W

S Sethuraman

Chennai Partner

May 11, 2013 Membership No: 203491

---

Mar 31, 2011

1. We have audited the atached Balance Sheet of Hinduja Foundries Limited ("the Company") as at March 31, 2011, 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 Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditng 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 supportng the amounts and disclosures in the financial statements. An audit also includes assessing the accountng principles used and significant estmates made by management, as well as evaluatng the overall financial statement presentaton. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003, issued by the Central Government of India in terms of sub-secton (4A) of Secton 227 of the Companies Act, 1956, ("the Act") we enclose in the Annexure a statement on the maters specifed in paragraphs 4 and 5 of the said Order.

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

a. we have obtained all the informaton and explanatons, which to the best of our knowledge and belief, were necessary for the 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 examinaton of the books of account;

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

d. in our opinion, the Balance Sheet, Profit and Loss account and Cash Flow statement dealt with by this report comply with the accountng standards referred to in sub-secton (3C) of Secton 211 of the Companies Act, 1956;

e. on the basis of writen representatons 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 disqualifed as on March 31, 2011 from being appointed as director in terms of clause (g) of sub-secton (1) of Secton 274 of the Act; and

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

i. in the case of the Balance Sheet, of the state of afairs of the Company as at March 31, 2011;

ii. in the case of the Profit and Loss account, of the Profit of the Company for the year ended on that date; and

iii. in the case of Cash Flow statement, of the cash flows for the year ended on that date.

Annexure to the Auditor's Report The Annexure referred to in the Auditors' Report to the members of Hinduja Foundries Limited ("the Company") for the year ended March 31, 2011. We report that:

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

(b) The Company has a regular programme of physical verifcaton of its fixed assets by which all fixed assets are verifed in a phased manner over a period of two years. In our opinion, this periodicity of physical verifcaton is reasonable having regard to the size of the Company and the nature of its assets. In accordance with this programme certain fixed assets were verifed during the year and as explained to us, no material discrepancies were notced on such verifcaton.

(c) Fixed assets disposed of during the year were not substantal, and therefore, do not afect the going concern assumpton.

2. (a) The inventory, except goods-in-transit and stocks lying with third partes, has been physically verifed by the management during the year. In our opinion, the frequency of such verifcaton is reasonable. For stocks lying with third partes at the year-end, writen confrmatons have been obtained.

(b) The procedures for the physical verifcaton of inventories followed by the management are reasonable and adequate in relaton to the size of the Company and the nature of its business.

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

3. The Company has neither granted nor taken any loans, secured or unsecured, to or from companies, frms or other partes covered in the register maintained under secton 301 of the Companies Act, 1956.

4. In our opinion and according to the informaton and explanatons given to us, and having regard to the explanaton that purchases of certain items of inventories are for the Company's specialised requirements and similarly certain goods sold or services rendered are for the specialised requirements of the buyers and suitable alternatve sources are not available to obtain comparable quotatons, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fixed assets and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

5. (a) In our opinion and according to the informaton and explanatons given to us, the partculars of contracts or arrangements referred to in secton 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that secton.

(b) In our opinion, and according to the informaton and explanatons given to us, the transactons made in pursuance of contracts and arrangements referred to in (a) above does not exceed the value of Rs 5 lakh with any party during the year.

6. The Company has not accepted any deposits from the public.

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

8. The Central Government has not prescribed the maintenance of cost records under secton 209(1)(d) of the Companies Act, 1956 for any of the products manufactured/services rendered by the Company.

9. (a) According to the informaton and explanatons given to us and on the basis of our examinaton of the records of the company, amounts deducted/accrued in the books of account in respect of undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorites. As explained to us, the Company did not have any dues on account of Investor Educaton and Protecton Fund. There were no dues on account of cess under secton 441A of the Companies Act, 1956 since the aforesaid secton has not yet been made efectve by the Central Government.

According to the informaton and explanatons given to us, no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty and other material statutory dues were in arrears as at March 31, 2011 for a period of more than six months from the date they became payable.

(b) According to the informaton and explanatons given to us, the dues set out in Appendix I in respect of Excise duty, Service tax, and Sales tax have not been deposited by the Company on account of disputes.

10. 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 and in the immediately preceding financial year.

11. In our opinion and according to the informaton and explanatons given to us, the Company has not defaulted in repayment of dues to its bankers or to any financial insttutons. The Company did not have any outstanding debenture during the year.

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

13. In our opinion and according to the informaton and explanatons given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society.

14. According to the informaton and explanatons given to us, the Company is not dealing or trading in shares, securites, debentures and other investments.

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

16. In our opinion and according to the informaton and explanatons given to us, the term loans taken by the Company have been applied for the purpose for which they were raised.

17. According to the informaton and explanatons given to us and on an overall examinaton of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

18. The Company has not made any preferental allotment of shares to companies / frms / partes covered in the register maintained under Secton 301 of the Companies Act, 1956.

19. According to the informaton and explanatons given to us, the Company has not issued any debentures.

20. The Company has raised money by way of public issue (Rights Issue) during the year as defned under SEBI (Disclosure and Investor Protecton) Guidelines, 2000. We have verifed the end-use of money raised by such public issue as disclosed in the notes to the financial statements.

21. According to the informaton and explanatons given to us, no fraud on or by the Company has been notced or reported during the course of our audit.

Appendix I as regards to Para 9 (b) of Annexure to the Auditors' Report

Name of the statute Nature of Amount Period to which the dues in Rs. Lakhs amount relates

Central Excise Act, 1944* Excise Duty 83.77 1998-1999

Cenvat Credit Rules, 2004 Service Tax 14.74 2007-2008 credits

Cenvat Credit Rules, 2004 Service Tax 153.48 Oct 2008- Sept 2009 credits

Cenvat Credit Rules, 2004 Service Tax 246.60 Jun 2006 - Sep 2007 credits

Cenvat Credit Rules, 2004 Service Tax 137.56 Nov 2007 - Sep 2008 credits

Cenvat Credit Rules, 2004 Excise Duty 4.28 2007-2008

Central Sales Tax Act, 1956** Sales Tax 41.42 2004-2005

Central Sales Tax Act, 1956** Sales Tax 5.52 2003-2004

Name of the Statue Forum where dispute is pending

Central Excise Act, 1944* Hon'ble High Court of Madras

Cenvat Credit Rules, 2004 Commissioner of Central Excise (appeals)

Cenvat Credit Rules, 2004 Customs, Excise and Service Tax Appellate Tribunal

Cenvat Credit Rules, 2004 Customs, Excise and Service Tax Appellate Tribunal

Cenvat Credit Rules, 2004 Customs, Excise and Service Tax Appellate Tribunal

Cenvat Credit Rules, 2004 Commissioner of Central Excise (appeals)

Central Sales Tax Act, 1956** Appellate Deputy Commissioner (Commercial Taxes) – I

Central Sales Tax Act, 1956** Appellate Deputy Commissioner (Commercial Taxes) – I

* Excludes amount paid under protest of Rs. 61.13 Lakhs

** Excludes amount paid under protest aggregatng to Rs.31.55 Lakhs

for B S R and Company Chartered Accountants Firm's Regn. No. 128900W

S Sethuraman

Chennai Partner

Date: May 20, 2011 Membership No. 203491

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Hinduja Foundries 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 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 thebasisofthe 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 accountsgivethe information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

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

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

Annexure referred to in paragraph 3 of our report of even date to the Members of Hinduja Foundries Limited for the year ended March 31, 2010

(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. As informed, no material discrepancies were noticed on such verification.

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

(ii) (a) 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) (b) 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) (f) and (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. During the course of our audit, we have not observed any continuing failure to correct major weakness in internal control system of the company.

(v) According to the information and explanations provided by the management, we are of the opinion that there are no contracts or arrangements that need to be entered into the register maintained under Section 301 during the year.

(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) The Company is regular in depositing with appropriate authorities 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 applicable to it.

(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, value added tax, wealth-tax, service 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, income-tax, customs duty, wealth-tax, excise duty and cess on account of any dispute, are as follows:

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

Central Excise Act, 1944 Excise duty including 22.64 1998-99 penalty*

Cenvat Credit Rules, 2004 Service tax credit 14.74 2007-08

Cenvat Credit Rules, 2004 Service tax credit 153.48 October 2008 to September 2009

Cenvat Credit Rules, 2004 Service tax credit *** 384.47 June 2006 to September 2007

Central Sales Tax Act, 1956 Sales tax# 15.40 2003-04 and 2004-05

Income Tax Act, 1961 Income tax 67.70 2007-08



Name of the Statue Forum where dispute is pending

Central Excise Act, 1944 Honble High Court of Madras

Cenvat Credit Rules, 2004 ** Refer note below

Cenvat Credit Rules, 2004 **Refer note below

Cenvat Credit Rules, 2004 Customs, Excise and Service Tax Appellate Tribunal

Central Sales Tax Act, 1956 Appellate Deputy Commissioner

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

* Net of Rs 61.13 lakhs being deposit paid under protest.

** Appeal yet to be filed as the time limit for filing the appeal has not elapsed.

*** The Company has obtained a stay from Customs Excise and Service Tax Tribunal.

# Net of Rs 31.55 lakhs being deposit paid under protest.

(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 and banks. The Company has not issued any debentures.

(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 the information and explanations given to us, the Company has not issued any debentures.

(xx) The Company has not raised any money by public issues during the year as defined under SEBI (Disclosure and Investor Protection) Guidelines, 2000. However, as described in detail in Note No 3.2 to the financial statements, the Company is in the process of completing a Rights 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.

As per our report of date

For Fraser & Ross For S.R.Batliboi & Associates

Chartered Accountants Chartered Accountants

Firms Regn No:000829S Firms Regn No:101049W

Bhavani Balasubramanian S Balasubrahmanyam Partner Partner

Membership No.022156 Membership No. 053315

Chennai April 30, 2010