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Auditor Report of India Nippon Electricals Ltd.

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the 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 judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the rules made thereunder.

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

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

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

Opinion

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

Report on other Legal and Regulatory Requirements:

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 Companies Act 2013, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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 purpose of our audit;

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

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

d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act read with rule 7 of the companies (accounts) Rules 2014.

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

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

i. The Company has disclosed the impact of pending litigation on its financial position in its financial statements - Refer Note 34 to the financial statements disclosing contingent liabilities;

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

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

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

The provisions of the following clauses of Companies (Auditor's Report) Order, 2015 are not applicable to the company for the year.

a) Clause 3(v) with regard to acceptance of deposits from the public since the company has not accepted any deposits.

b) Clause 3(viii) with regard to accumulated losses since the company's net-worth is positive and the company has not incurred cash losses during the year or in the preceding financial year.

c) Clause 3(ix) with regard to default in repayment of dues to a financial institution or Bank or Debenture Holders since the company has not borrowed any amounts during the year.

d) Clause 3(x) with regard to guarantee given for loans taken by others from banks or financial institutions as the company has not given any guarantees.

e) Clause 3(xi) with regard to term loans and applications of funds obtained since the company has not obtained any such loans.

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

(b) The company has a regular programme of physical verification of its fixed assets at reasonable intervals. As explained to us, the fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of two years, which in our opinion, is reasonable having regard to the size of the group 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.

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

(c) On the basis of the examination of the records of the inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not material and have been properly dealt with in the books of accounts.

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

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

(v) On the basis of the records, we are of the opinion that prima facie cost records and accounts specified by the Central Government of India under sub-section (1) of Section 148 of the Companies Act, 2013 have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(vi) (a) According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and cess. There were no dues in arrears for a period of more than six months as on 31st March, 2015.

(b) Based on the audit procedures and on the information and explanations given by the management, we furnish below the details of dues of Service Tax / Duty of Excise / Local area Development Tax / Income Tax which have not been deposited on account of disputes.

Statute Nature of dues Period to which relates (Financial Year)

Service tax under Disallowance of Service 2005-06 and Finance Act ,1994 Tax credit availed. 2006-07

Service tax under Disallowance of Service 2006-07 Finance Act ,1994 Tax credit availed.

Service tax under Disallowance of Service 2007-08 Finance Act ,1994 Tax Credit availed.

Central Excise Act Disallowance of CENVAT 2001-02 to 1944 credit on capital goods 2004-05 and non-reversal of CENVAT credit.

Central Excise Act Non-reversal of CENVAT credit. 2005-06 1944

Central Excise Act Short reversal of CENVAT 2006-07 1944 on Capital Goods.

Local Area Local Area Development 2003-04 and Development Tax Tax Assessment demand 2004-05 of Haryana state.

Service tax under Disallowance of Service 2011-12 Finance Act ,1994 Tax credit availed.

The Income Tax Disallowance 2010-11 Act, 1961. under Section 14A Apportionment of R&D Expenditure and Disallowance of Royalty

The Income Tax Disallowance 2011-12 Act, 1961. under Section 14A Apportionment of R&D Expenditure and Disallowance of Royalty



Statute Amount due(Rs.) Forum where dispute is pending

Service tax under 12,48,611 CESTAT Finance Act ,1994

Service tax under 27,142 Commissioner of Central Excise Finance Act ,1994 (Appeals).

Service tax under 1,49,985 Office of the Superintenden Finance Act ,1994 Central Excise

Central Excise Act 1,26,601 Assistant Commissioner of 1944 Central Excise

Central Excise Act 12,39,367 Joint Commissioner Central 1944 Excise

Central Excise Act 1,47,653 Deputy Commissioner Central 1944 Excise

Local Area 41,300 Joint Excise Taxation Development Tax Commissioner of Haryana state.

Service tax under 14,41,089 Additional Commissioner Finance Act ,1994 Central Excise

The Income Tax 79,47,960 Commissioner of Income Act, 1961. Tax (Appeals)

The Income Tax 80,52,340 Commissioner of Income Act, 1961. Tax (Appeals)

(c ) The Company has, with respect to the amounts required to be transferred to the Investor Education and Protection Fund, transferred such funds within time in accordance with the relevant provisions of the Companies Act 1956 and rules made thereunder.

(vii) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For BRAHMAYYA & CO.,

Chartered Accountants, Registration no.: 000511S

P S KUMAR Bengaluru Partner 25th May 2015 Membership No.15590




Mar 31, 2014

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

Managements 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.

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 judgement, including the assessment of the risks of material misstatements of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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 Statements 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 March31, 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.

1. The provisions of the following clauses of Companies (Auditor''s Report) Order, 2003 as amended are not applicable to the company for the year.

a) Clause 4(vi) with regard to acceptance of deposits from the public since the company has not accepted any deposits.

b) Clause 4(x) with regard to accumulated losses since the company''s net-worth is positive and the company has not incurred cash losses during the year.

c) Clause 4(xii) with regard to the loans granted against pledge of securities since no loans have been granted by the company.

d) Clause 4(xiii) with regard to the special statutes applicable to the chit funds and nidhis since the company has not carried on such business.

e) Clause 4(xiv) with regard to trading in securities since the company did not carry on such activities.

f) Clause 4(xv) with regard to guarantee given for loans taken by others from bank or financial institutions as the company has not given any guarantees.

g) Clause 4(xvi) with regard to term loans and applications of funds obtained since the company has not obtained any such loans.

h) Clause 4(xvii) with regard to funds obtained on short term basis used for long term investment since the company has not raised such fund during the year.

i) Clause 4(xviii) with regard to the preferential allotment of shares to specified parties since no allotment of shares was made during the year.

j) Clause 4(xix) with regard to securities to be created in respect of debentures since no debentures were issued during the year;

k) Clause 4(xx) with regard to money raised by public issue since no money was raised by public issue during the year.

2. The company has maintained proper records showing full particulars including quantitative details and the situation of fixed assets. The company has a regular programme of physical verification of its fixed assets at reasonable intervals. In accordance with this programme, the fixed assets were verified during the year. No material discrepancies were noticed on such verification. In our opinion the frequency of verification is reasonable.

3. The company has not during the year disposed off substantial part of the fixed assets, which would give rise to the question of impairment of the status of the company as a going concern.

4. The management has conducted physical verification of inventory at reasonable intervals.

5. The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

6. On the basis of the examination of the records of the inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not material and have been properly dealt with in the books of accounts.

7. The Company has not taken any loans from companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956.

8. The company has placed an unsecured short term deposit with a company covered in the register maintained under section 301 of the Act. The amount involved is Rs. 10 crores which is also the maximum outstanding during the year. In our opinion, the rate of interest and other terms and conditions of the deposit placed by the company, are not prima facie prejudicial to the interest of the company. The payment of interest is also regular. There are no overdue amounts on the deposit.

9. In our opinion and according the information given to us, there is adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

10. Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered.

11. In our opinion and according the information and explanation given to us, the transactions made in the pursuance of the contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of Five lakh rupees in respect of any party during the year have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time.

12. In our opinion, the company has an internal audit system commensurate with the size and the nature of the business.

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

14. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors'' Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty. There were no arrears as on 31st March, 2014.

15. Based on the audit procedures and on the information and explanations given by the management, we furnish below the details of dues of Sales Tax / Service Tax / Excise Duty / Cess/Local area Development Tax, which have not been deposited on account of disputes.

Statute Nature of dues Period to which

relates (Financial Year)

Service tax under Disallowance of Service 2005-06 and

Finance Act , 1994 Tax credit availed. 2006-07

Service tax under Disallowance of Service 2006-07

Finance Act , 1994 Tax credit availed.

Service tax under Disallowance of Service 2007-08

Finance Act , 1994 Tax Credit availed. 2012-13

Central Excise Act Disallowance of CENVAT 2001-02 to

1944 credit on capital goods 2004-05

and non-reversal of

CENVAT credit.

Central Excise Act Non-reversal of CENVAT 2005-06 1944 credit.

Central Excise Act Short reversal of CENVAT 2006-07 1944 on Capital Goods.

Local Area Local Area Development 2003-04 and

Development Tax Tax Assessment demand 2004-05 of Haryana state.

Service tax under Disallowance of Service 2011-12 Finance Act , 1994 Tax credit availed.

Tamil Nadu VAT Disallowance of VAT credit 2008-09 to

Act, 2006. availed 2013-14

Statute Amount Forum where dispute is

pending due (Rs.)

Service tax under Finance Act, 1994 11,49,084 CESTAT

Service tax under Finance Act, 1994 27,142 Commissioner of Central Excise (Appeals).

Service tax under Finance Act, 1994 2,52,091 Office of the Superintendent Central Excise

Central Excise Act,1944 1,26,601 Assistant Commissioner of Central Excise

Central Excise Act,1944 12,39,367 Joint Commissioner Central Excise

Centra Excise Act,1944 1,47,653 Deputy Commissioner Central Excise

Local Aria Development Tax of Haryana state 41,300 Joint Excise Taxation Commissioner

Service Tax under Finance Act, 1994 14,41,089 Additional Commissioner Central Excise

Tamil Nadu VAT Act, 2006 24,139 Assistant Commissioner of Commercial Tax.

16. Based on our verification and according to the information and explanations given by the management, the Company did not have any dues to financial institutions nor were there any borrowings from banks. The Company has not issued any debentures during the year.

17. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For BRAHMAYYA & CO.,

Chartered Accountants,

Registration no.: 000511S

P S Kumar

Chennai Partner

23rd May 2014. Membership No.:15590


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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 flow 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.

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 judgement, including the assessment of the risks of material misstatements 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 uses 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 policies generally accepted in India:

(a) in the case of the Balance Sheet, of the 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 Statements, 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 Statements 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.

1. The provisions of the following clauses of Companies (Auditor''s Report) Order, 2003 as amended are not applicable to the company for the year.

a. Clause 4(vi) with regard to acceptance of deposits from the public since the company has not accepted any deposits.

b. Clause 4(x) with regard to accumulated losses since the company''s net-worth is positive and the company has not incurred cash losses during the year.

c. Clause 4 (xii) with regard to the loans granted against pledge of securities since no loans have been granted by the company.

d. Clause 4 (xiii) with regard to the special statutes applicable to the chit funds and nidhis since the company has not carried on such business.

e. Clause 4 (xiv) with regard to trading in securities since the company did not carry on such activities.

f. Clause 4(xv) with regard to guarantee given for loans taken by others from bank or financial institutions as the company has not given any guarantees.

g. Clause 4(xvi) with regard to term loans and applications of funds obtained since the company has not obtained any such loans.

h. Clause 4(xvii) with regard to funds obtained on short term basis used for long term investment since the company has not raised such fund during the year.

i. Clause 4(xviii) with regard to the preferential allotment of shares to specified parties since no allotment of shares was made during the year.

j. Clause 4(xix) with regard to securities to be created in respect of debentures since no debentures were issued during the year;

k. Clause 4(xx) with regard to money raised by public issue since no money was raised by public issue during the year.

2. The company has maintained proper records showing full particulars including quantitative details and the situation of fixed assets. The company has a regular programme of physical verification of its fixed assets at reasonable intervals. In accordance with this programme, the fixed assets were verified during the year and no material discrepancies were noticed on such verification.

3. The company has not during the year disposed off substantial part of the fixed assets, which would give rise to the question of impairment of the status of the company as a going concern.

4. The management has conducted physical verification of inventory at reasonable intervals.

5. The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

6. On the basis of the examination of the records of the inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not material and have been properly dealt with in the books of accounts.

7. The company has made an unsecured, inter- corporate deposit with a company in which a director of the company is interested as director. The amount involved is Rs.3 crores which was the opening balance and also the maximum amount of deposit during the year. In our opinion the rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the company. This deposit has been returned to the company during the year and interest was paid regularly.

8. The company has not taken any loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

9. In our opinion and according to the information given to us, there is adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

10. Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered.

11. In our opinion and according to the information and explanation given to us, the transactions made in the pursuance of the contracts or arrangements entered in the register maintained under section 301 and exceeding the value of Five lakh rupees in respect of any party during the year have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time.

12. In our opinion, the company has an internal audit system commensurate with the size and the nature of the business.

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

14. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors'' Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty. There were no arrears as on 31st March, 2013.

15. Based on the audit procedures and on the information and explanations given by the management, we furnish below the details of dues of sales Tax / Service Tax / Excise Duty / Cess / Local area Development Tax, which have not been deposited on account of disputes.

Financial Sl. Name of the Nature of dues Year to which No Statute relates

1. Service tax Disallowance of Service Tax credit 2005-06 availed. and 2006-07

2. Service tax Disallowance of Service Tax credit 2006-07 availed.

3. Service tax Disallowance of Service Tax credit 2007-08 availed.

4. Service tax Disallowance of Service Tax credit 2011-12 availed.

5. Excise Duty Disallowance of CENVAT credit on 2001-02 to capital goods and non-reversal of 2004-05 CENVAT credit.

6. Excise Duty Non-reversal of CENVAT credit. 2005-06

7. Excise Duty Short reversal of CENVAT on Capital 2006-07 Goods.

8. Local Area Local Area Development Tax 2003-04 Development Assessment demand and Tax 2004-05

Name Amount Forum where dispute due (Rs.) is pending

Service tax 11,49,084 CESTAT

Service tax 27,142 Commissioner of Central Excise (Appeals).

Service tax 1,49,985 Office of the Superintendent Central Excise

Service tax 14,41,089 Additional Commissioner Central Excise

Excise Duty 1,26,601 Assistant Commissioner of Central Excise

Excise Duty 2,39,367 Joint Commissioner Central Excise

Excise Duty 1,47,653 Deputy Commissioner Central Excise

Local Area 41,300 Joint Excise Taxation Commissioner.

16. Based on our verification and according to the information and explanations given by the management, the Company did not have any dues to financial institutions nor were there any borrowings from banks. The Company has not issued any debentures during the year.

17. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For BRAHMAYYA & CO.,

Chartered Accountants,

Registration No.: 000511S

P S KUMAR

Chennai Partner

28th May 2013 Membership No.:15590


Mar 31, 2012

1. We have audited the attached Balance Sheet of India Nippon Electricals Limited, as at 31st March 2012, and also the Profit and Loss account and the Cash Flow Statement for the year ended on the date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 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 it 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 accounts;

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. As Informed to us and based on the verification of records, we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956;

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

a. In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2012;

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.

1. The provisions of the following clauses of Companies (Auditor's Report) Order, 2003 as amended are not applicable to the company for the year.

a. Clause 4(vi) with regard to acceptance of deposits from the public since the company has not accepted any deposits.

b. Clause 4(x) with regard to accumulated losses since the company's net-worth is positive and the company has not incurred cash losses during the year.

c. Clause 4(xii) with regard to the loans granted against pledge of securities since no loans have been granted by the company.

d. Clause 4(xiii) with regard to the special statutes applicable to the chit funds and nidhis since the company has not carried on such business.

e. Clause 4(xiv) with regard to trading in securities since the company did not carry on such activities.

f. Clause 4(xv) with regard to guarantee given for loans taken by others from bank or financial institutions as the company has not given any guarantees.

g. Clause 4(xvi) with regard to term loans and applications of funds obtained since the company has not obtained any such loans.

h. Clause 4(xvii) with regard to funds obtained on short term basis used for long term investment since the company has not raised such fund during the year.

i. Clause 4(xviii) with regard to the preferential allotment of shares to specified parties since no allotment of shares was made during the year.

j. Clause 4(xix) with regard to securities to be created in respect of debentures since no debentures were issued during the year;

k. Clause 4(xx) with regard to money raised by public issue since no money was raised by public issue during the year,

2. The company has maintained proper records showing full particulars including quantitative details and the situation of fixed assets. The company has a regular programme of physical verification of its fixed assets at reasonable intervals. In accordance with this programme, the fixed assets were verified during the year and no material discrepancies were noticed on such verification.

3. The company has not during the year disposed off substantial part of the fixed assets, which would give rise to the question of impairment of the status of the company as a going concern.

4. The management has conducted physical verification of inventory at reasonable intervals.

5. The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

6. On the basis of the examination of the records of the inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not material and have been properly dealt with in the books of accounts.

7. The company has made an unsecured, inter- corporate deposit with a company in which a director of the company is interested as director. The amount involved is Rs 3 crores which is also the closing balance and the maximum amount due during the year, In our opinion the rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the company. The principal amount is not due for repayment and interest is being paid regularly.

8. The Company has not taken any loans from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

9. In our opinion and according to the information given to us, there is adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

10.Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered.

11.In our opinion and according to the information and explanation given to us, the transactions made in the pursuance of the contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of Five lakh rupees in respect of any party during the year have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time.

12.In our opinion, the company has an internal audit system commensurate with the size and the nature of the business.

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

14.According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors' Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty . There were no arrears as on 31st March, 2012.

15.Based on the audit procedures and on the information and explanations given by the management, we furnish below the details of dues of Sales Tax / Service Tax / Excise Duty / Cess/Local area Development Tax, which have not been deposited on account of disputes.

S. Name of the Nature of dues Period of No. Statute which relates (financial year)

1 Service Tax Interest on reversal of Service tax 2004-05 credit availed

2 Service Tax Non-payment of service tax on Royalty 2000-01 to and technical know-how 2003-04

3 Service Tax Disallowance of Service Tax credit 2007-08 to availed, 2009-10

4 Service tax Disallowance of Service Tax credit 2005-06 availed, and 2006-07

5 Service tax Disallowance of Service fax credit 2005-06 to availed. 2008-09

6 Service Tax Disallowance of Service Tax Credit 2007-08 availed.

7 Excise Duty Disallowance of CENVAT credit on 2001-02 to capital goods and non-reversal of 2004-05 CENVAT credit. and 2009-10

8 Excise Duty Non-reversal of CENVAT credit. 2005-06

9 Excise Duty Short reversal of CENVAT on Capital 2006-07 Goods.

10 Local Area Local Area Development Tax 2003-04 Development Assessment demand and Tax 2004-05

S. Name of the Amount Forum where dispute No. Statute is pending

1 Service Tax 7,820 Commissioner of Central Excise (Appeals)

2 Service Tax 11,16,582 Assistant Commissioner of Central Excise

3 Service Tax 3,58,962 Assistant Commissioner of Central Excise

4 Service tax 1,10,208 CESTAT

5 Service tax 10,66,018 Commissioner of Appeals (Central excise) S. Name of the Amount Forum where dispute No. Statute is pending

6 Service Tax 1,49,985 Office of the Superintendent Central Excise

7 Excise Duty 1,53,861 Assistant Commissioner of Central Excise

8 Excise Duty 12,39,367 Joint Commissioner Central Excise

9 Excise Duty 1,47,653 Deputy Commissioner Central Excise

10 Local Area 41,300 Joint Excise Taxation Commissioner Development Tax

16. Based on our verification and according to the information and explanations given by the management, the Company did not have any dues to financial institutions nor were there any borrowings from banks. The Company has not issued any debentures during the year.

17. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For BRAHMAYYA & CO.,

Chartered Accountants,

Registration No.: 000511S

P S KUMAR

Chennai, Partner

30th May 2012 Membership No.: 15590


Mar 31, 2011

1. We have audited the attached Balance Sheet of India Nippon Electricals Limited, as at 31st March 2011, and also the Profit and Loss account and the Cash Flow Statement for the year ended on the date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 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 reauired by law have been kept by the company so far as it 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 accounts;

Iv. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting StanOarOs referred to in sub- section (3C) of section 211 of the Companies Act, 1956.

v. As Informed to us and based on the verification of records, we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956;

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

a. In the case of the Balance Sheet, of the state of affairs of the company as at 31 st March 2011;

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

1. The provisions of the following clauses of Companies (Auditor's Report) Order, 2003 as amended are not applicable to the company for the year.

a. Clause 4(vi) with regard to acceptance of deposits from the public since the company has not accepted any deposits.

b. Clause 4(x) with regard to accumulated losses since the company's net-worth is positive and the company has not incurred cash losses during the year.

c. Clause 4(xii) with regard to the loans granted against pledge of securities since no loans have been granted by the company

d. Clause 4(xiii) with regard to the special statutes applicable to the chit funds and nidhis since the company has not carried on such business.

e. Clause 4(xiv) with regard to trading in securities since the company did not carry on such activities.

f. Clause 4(xv) with regard to guarantee given for loans taken by others from bank or financial institutions as the company has not given any guarantees.

g. Clause 4(xvi) with regard to term loans and applications of funds obtained since the company has not obtained any such loans.

h. Clause 4(xvii) with regard to funds obtained on short term basis used for long term investment since the company has not raised such fund during the year,

i. Clause 4(xviii) with regard to the preferential allotment of shares to specified parties since no allotment of shares was made during the year.

j. Clause 4(xix) with regard to securities to be created in respect of debentures since no debentures were issued during the year;

k. Clause 4(xx) with regard to money raised by public issue since no money was raised by public issue during the year.

2. The company has maintained proper records showing full particulars including auantitative details and the situation of fixed assets. The company has a regular programme of physical verification of its fixed assets at reasonable intervals. In accordance with this programme, the fixed assets were verified during the year and no material discrepancies were noticed on such verification,

3. The company has not during the year disposed off substantial part of the fixed assets, which would give rise to the question of impairment of the status of the company as a going concern.

4. The management has conducted physical verification of inventory at reasonable intervals.

5. The procedure of physical verification of inventories followed by the management is reasonable and adeauate in relation to the size of the company and the nature of its business.

6. On the basis of the examination of the records of the inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not material and have been properly dealt with in the books of accounts.

7. The company has made an unsecured, inter- corporate deposit with a company in which a director of the company is interested as director. The amount involved is Rs.3 crores which is also the closing balance and the maximum amount due during the year. In our opinion the rate of interest and other terms and conditions are prima facie not prejudicial to the interest of the company. The principal amount is not due for repayment and interest is being paid regularly.

8. The Company has not taken any loans from companies, firms or other parties covered in the register maintained under section 301 of The Companies Act, 1956.

9. In our opinion and according to the information given to us, there is adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls,

10. Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered.

11. In our opinion and according to the information and explanation given to us,the transactions made in the pursuance of the contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of Five lakh rupees in respect of any party during the year have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time.

12. In our opinion, the company has an internal audit system commensurate with the size and the nature of the business.

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

14. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors' Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and the Cess applicable to it. There were no arrears as on 31st March, 2011.

15. Based on the audit procedures and on the information and explanations given by the management, we furnish below the details of dues of Sales Tax / Income Tax / Custom Duty / Wealth Tax / Service Tax / Excise Duty / Cess which have not been deposited on account of disputes.

SI. Nature of the Nature of dues which relates No. Statute (Financial Year)

1 Service Tax Interest on reversal of 2004-05 Service tax credit availed

2 Service Tax Non-payment of service tax 2000-01 to on Royalty and technical 2003-04 know-how

3 Service Tax Disallowance of Service Tax 2007-08 to credit availed. 2009-10

4 Service tax Disallowance of Service 2005-06 Tax credit availed. and 2006-07

5 Service tax Disallowance of Service 2005-06 to tax credit availed. 2008-09

6 Service Tax Disallowance of Service 2007-08 Tax Credit availed,

7 Excise Duty Disallowance of CENVAT on 2001-02 to credit capital goods and 2004-05 non-reversal of and CENVAT credit. 2009-10

8 Excise Duty Non-reversal of 2005-06 CENVAT credit.

9 Excise Duty Short reversal of CENVAT 2006-07 on Capital Goods,

10 Excise Duty Disallowance of CENVAT 2006-07 Credit. to 2009-10

11 Local Area Local Area Development 2003-04 Development Tax Assessment demand and Tax 2004-05



Nature of the Amount Forum where dispute Statute Due (Rs) is pending

Service Tax 7,820 Deputy Commissioner of Central Excise

Service Tax 11,16,582 Assistant Commissioner of Central Excise

Service Tax 4,30,384 Assistant Commissioner of Central Excise

Service Tax 4,27,588 CESTAT

Service Tax 10,78,217 Commissioner of Appeals (Central excise)

Service Tax 1,49,985 Office of the Superintendent Central Excise

Excise Duty 1,53,861 Assistant Commissioner of Central Excise

Excise Duty 12,39,367 Joint Commissioner Central Excise

Excise Duty 1,47,653 Deputy Commissioner Central Excise

Excise Duty 85,27,920 Office of the Superintendent Central Excise

Local Area 41,300 Joint Excise Taxation Development Commissioner Tax

16. Based on our verification and according to the information and explanations given by the management, the Company did not have any dues to financial institutions nor were there any borrowings from banks. The Company has not issued any debentures during the year.

17. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For BRAHMAYYA & CO., Chattered Accountants, Registration No.: 0005US

P S KUMAR Partner Membership No.: 15590

Chennai, 27.05.2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of India Nippon Electricals Limited, as at 31st March 2010, and also the Profit and Loss Account and the Cash Flow Statement for the year ended on the 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 the auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 the 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 it 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 accounts;

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. As Informed to us and based on the verification of records, we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the Companies Act, 1956;

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

a. In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2010;

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

1. The provisions of the following clauses of Companies (Auditors Report) Order, 2003 as amended are not applicable to the company for the year.

a. Clause 4(iii) with regard to loans granted or taken to/from parties covered in the register maintained under section 301 of the Companies Act, 1956 as there were no such transactions.

b. Clause 4(vi) with regard to acceptance of deposits from the public since the company has not accepted any deposits.

c. Clause 4(x) with regard to accumulated losses since the companys net-worth is positive and the company has not incurred any cash losses during the year.

d. Clause 4(xii) with regard to the loans granted against pledge of securities since no loans have been granted by the company.

e. Clause 4(xiii) with regard to the special statutes applicable to the chit funds and nidhis since the company has not carried on such business.

f. Clause 4(xiv) with regard to trading in securities since the company did not carry on such activities.

g. Clause 4(xv) with regard to guarantee given for loans taken by others from bank or financial institutions as the company has not given any guarantees.

h. Clause 4(xvi) with regard to term loans and applications of funds obtained since the company has not obtained any such loans.

i. Clause 4(xvii) with regard to funds obtained on short term basis used for long term investment and vice-versa since the company has not raised such fund during the year.

j. Clause 4(xviii) with regard to the preferential allotment of shares to specified parties since no allotment of shares was made during the year.

k. Clause 4(xix) with regard to securities to be created in respect of debentures since no debentures were issued during the year;

l. Clause 4(xx) with regard to money raised by public issue since no money was raised by public issue during the year.

2. The company has maintained proper records showing full particulars including quantitative details and the situation of fixed assets.

3. The company has a regular programme of physical verification of its fixed assets by which fixed assets are verified during the year. In accordance with this programme, the fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets.

4. The company has not during the year disposed off any substantial part of the fixed assets, which would give rise to the question of impairment of the status of the company as a going concern.

5. The management has conducted physical verification of inventory at reasonable intervals.

6. The procedure of physical verification of inventories followed by the management is reasonable and adequate in relation to the size of the company and the nature of its business.

7. On the basis of the examination of the records of the inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stock and the book records were not material and have been properly dealt with in the books of accounts.

8. In our opinion and according to the information given to us, there is adequate internal control procedure commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, no major weakness has been noticed in the internal controls.

9. Based on the audit procedures applied by us and according to the information and explanation provided by the management, we are of the opinion that the transactions that need to be entered into the register maintained under section 301 have been so entered.

10. In our opinion and according to the information and explanation given to us, the transactions made in pursuance of the contracts or arrangements entered in the registers maintained under section 301 and exceeding the value of five lakh rupees in respect of any party during the year have been made at the prices which are reasonable having regard to the prevailing market prices at the relevant time.

11. In our opinion, the company has an internal audit system commensurate with the size and the nature of the business.

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

13. According to the records of the company, the company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investors Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty and the Cess applicable to it.

14. Based on the audit procedures and on the information and explanations given by the management, we furnish below the details of dues of sales tax / Income Tax / Custom Duty / Wealth Tax / Service Tax / Excise Duty / Cess which have not been deposited on account of disputes.

S. Amount Forum where dispute

Nature of the Statute Nature of dues

No. Due (Rs) is pending

1 TNGST Act for 1999-2000 Disallowance of Form XVII issued for Deep 16,575.00 Sales tax Appellate Tribunal

Freezer - Chennai

2 Central Sales Tax Act for Disallowance of Credit Notes and Turn Over 109,795.00 Assistant Commissioner Of 2003-2004 to 2004-2005 Discounts & Penalty Appellate Tribunal

3 TNGST Act for 2004-2005 Interstate Sale of Car, Taxable at 12% 12,388.00 Assistant Commissioner Of

Appellate Tribunal

4 Service Tax for 2004-2005 Interest on reversal of Service tax credit availed 7,820.00 Deputy

Commissioner of

on Mobile/Residence telephones Central Excise

5 Service Tax for 2001-2002 to Service Tax on royalty and technical know-how 1,116,582.00 Asst. Commissioner

-Central 2003-2004 Excise (Service tax Cell)

6 Service Tax for 2006-2007 Disallowance of Service Tax credit availed on 317,380.00 Appellate Tribunal

(Service Freight Outwards Tax Cell)

7 Service Tax up to June 2005 Disallowance of Service Tax credit availed on 12,179.00 Commissioner of

Appeals Freight

outwards (Central Excise)

8 Service Tax for 2006-2007 to Disallowance of Service Tax credit availed on Rent- 362,445.00 Assistant

Commissioner- 2007-2008 a-cab, Air Travel, Vehicle Repair , Group Medical Central Excise

(Service Tax

Insurance for Employees for October 2007 Cell)

9 Service Tax for 2005-2006 & Disallowance of Service Tax credit availed on 110,208.00 CESTAT 2006-2007 Catering

10 Service Tax for 2005-2006 to Disallowance of Service Tax Credit availed on Rent 1,223,334.00 Commissioner

of Appeals 2007-2008 a Cab/Housekeeping /Creche/Freight Outwards (Central Excise)

11 Service Tax for 2007-2008 Disallowance of Service Tax Credit on Freight 149,985.00 Superintendent

Central

Outward/Cab/Catering ( 2007-2008 ) Excise - Rewari

12 Excise Duty for 2005-2006 Non-reversal of Cenvat credit on Turnover 126,601.00 Assistant

Commissioner of

Discount Central Excise

13 Excise Duty for Apr 2001 to Non-reversal of Cenvat credit on Turnover 1,239,367.00 Joint

Commissioner of Central Sep 2005 Discount Excise

14 Excise Duty for 2006-2007 Short reversal of Cenvat on Capital Goods 147,653.00 Deputy

Commissioner of Central Excise

15 Service Tax for 2009-2010 Disallowance of Service tax credit on Rent a Cab 30,519.00 Assistant

Commissioner of

and Service bills Central

Excise

15. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the company has been noticed or reported during the year.

For BRAHMAYYA & CO.,

Chartered Accountants,

Registration No.: 000511S

Chennai, P S KUMAR

26th May 2010. Partner

Membership No.:15590





 
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