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Auditor Report of Indo Tech Transformers Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Indo Tech Transformers Limited (the "Company"), which comprise the balance sheet as at March 31,2015, the statement of profit and loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s responsibility for the financial statements

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

Auditor''s responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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 31,2015, and its loss and its cash flows for the year ended on that date.

Emphasis of matter

We draw attention to note 2(a) to the financial statements which more fully discusses the going concern related matters. Based on the current business plans, commitment by the holding company to provide financial and other assistance as is necessary to enable the Company to continue in operational existence for the foreseeable future and at least for a period of 12 months from the balance sheet date and availability of banking limits, 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. Our opinion is not modified in respect of this matter.

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 Companies Act, 2013, we enclose in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the said 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 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, 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) The going concern matter described under the Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

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

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

i The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27 to the financial statements.

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

iii There has been a delay of 113 days in transferring the amount of Rs. 93,104, required to be transferred to the Investor Education and Protection Fund by the Company.

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

(b) The Company has a regular programme of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of two 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. No material discrepancies were noticed on such verification.

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

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

(c) On the basis of our examination of the records of inventory, we are of the opinion that the Company has maintained proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material and have been properly dealt with in the books of account

(iii) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register required under Section 189 of the Companies Act, 2013. Accordingly, paragraph 3(iii) of the Order is not applicable.

(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 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. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 148(1) of the Companies Act, 2013 in respect of power transformers and 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, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have generally been deposited regularly during the year by the Company with the appropriate authorities. As explained to us, the Company did not have any dues on account of wealth tax.

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, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues were in arrears as at March 31, 2015 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 relating to income tax, sales tax, and duty of customs that have not been deposited by the Company with the appropriate authorities on account of disputes are given below.

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

The Customs Act, 1962 Customs duty 1,417,317* FY 2004-05

The Central Sales Tax Central sales 441,618 FY 1996-97 Act, 1956 tax

The Central Sales Tax Central sales 362,608A FY 2005-06 Act, 1956 tax FY 2006-07

Tamil Nadu General Penalty 15,607 FY 1996-97 Sales Tax Act, 1959

Tamil Nadu Value Sales tax 1,411,682@ AY 2006-07, 2007-08, Added Tax Act, 2006 -2008 09 and 2009-10

Central Excise Act, Excise duty 15,668,936 FY 2008-09, April 1944 2012 to December 2012 and March 2014 to June 2014

Income-tax Act, 1961 Income tax 20,848,024 AY 2005-06, 2007-08, 2008- 09, 2009-10, 2010-11 and 2011-12

Name of the Statute Forum where the dispute is pending

The Customs Act, 1962 Custom Excise and Service Tax Appellate Tribunal, Chennai

The Central Sales Tax Madras High Court Act 1956

The Central Sales Tax Act, Assistant Commissioner of Commercial 1959 Taxes, Chennai

Tamil Nadu General Sales Tax Appellate Assistant Commission Act 1959

Tamil Nadu Value Added Tax Appellant Deputy Commissioner of Act 2006 Commercial Taxes

Central Excise Act, 1944 Custom Excise and Service Tax Appellate Tribunal, Chennai

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

* net of Rs. 1,272,500 paid under protest a net of Rs. 2,500,000 paid under protest @ net of Rs. 554,793 paid under protest

(c) According to the information and explanations given to us, there has been a delay of 113 days in transferring the amount of Rs. 93,104, required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder.

(viii) The accumulated losses of the Company, as at the year end are more than fifty percent of its net worth. The Company has incurred cash losses in the financial year and in the immediately 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. The Company did not have any outstanding dues to any financial institutions or debentureholders during the year.

(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) The Company did not have any term loans outstanding during the year.

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

for B S R & Co. LLP Chartered Accountants ICAI Firm Registration Number: 101248W/W-100022

Amar Sunder Partner Membership No. 078305

Place: Chennai Date : May 27, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Indo Tech Transformers Limited (the "Company"), which comprise the balance sheet as at March 31, 2014, the statement of profit and loss and the cash flow statement for the nine 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'') read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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, 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 financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Emphasis of matter

We draw attention to note 2(a) to the financial statements which more fully discusses the going concern related matters. Based on the approved business plans, independent impairment testing and availability of banking limits, 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. Our opinion is not qualified in respect of this matter.

Report on other legal and regulatory requirements

1. 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.

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

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

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

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

(d) In our opinion, the balance sheet, statement of profit and loss, and cash flow statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act. 2013;and

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

Annexure to the Independent Auditors'' Report to the Members of Indo Tech Transformers Limited for the Nine months period ended March 31, 2014

(Referred to in our report of even date)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation 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 two 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. No material discrepancies were noticed on such verification.

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

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

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

(c) On the basis of our examination of the records of inventory, we are of the opinion that the Company has maintained proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) The Company has neither granted nor taken any loan, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Thus, paragraph 4(iii) of the Order is not applicable.

(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 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, 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 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 its size and the nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of power transformers and 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, excise duty, customs duty, service tax, and other material statutory dues have generally been regularly deposited during the period by the Company with the appropriate authorities except in respect of income tax deducted at source where the Company has delays ranging from 26-28 days and income tax deductible at source estimated at Rs. 2.22 million which has not been deducted / paid. As explained to us, the Company did not have any dues on account of wealth tax and investor education and protection fund.

According to the information and explanations given to us, except for tax deduction at source amounting to Rs. 0.54 million, which is outstanding for more than six months as at the period end, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, cess and other material statutory dues were in arrears as at March 31, 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 relating to income tax, sales tax, and customs duty that have not been deposited by the Company on account of disputes are given in Appendix I.

(x) The accumulated losses of the Company, as at the period end are more than fifty percent of its net worth. The Company has incurred cash losses in the financial period and in the immediately preceding financial period.

(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. The Company did not have any outstanding dues to any financial institution or debenture holders during the period.

(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) The Company did not have any term loans outstanding during the period.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company,we are of the opinion that the funds raised on short-term basis estimated at Rs. 709.52 million have been used for long-term purposes.

(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 Act.

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

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

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

Appendix I to the Independent Auditors'' Report to the Members of Indo Tech Transformers Limited for the nine months period ended March 31, 2014 (continued)

(Referred to in our report of even date)

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

The Customs Act, 1962 Customs duty 1,417,317*

The Central Sales Tax Act, Central sales tax 441,618 1956

Tamil Nadu General Sales Tax Penalty 15,607 Act, 1959

The Central Sales Tax Act, Central sales tax 362,608^ 1956

Income-tax Act, 1961 Income tax 3,669,548

Income-tax Act, 1961 Income tax 20,848,024

Tamil Nadu VAT Act, 2006 Sales tax 1,411,682@



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

The Customs Act, 1962 FY 2004-05 Custom Excise and Service Tax Appellate Tribunal, Chennai The Central Sales Tax Act, 1956 FY 1996-97 Madras High Court

Tamil Nadu General Sales Tax Act, 1959 FY 1996-97 Appellate Assistant Commission

The Central Sales Tax Act, 1956 FY 2005-06 Assistant Commissioner of FY 2006-07 Commercial Taxes, Chennai

Income-tax Act, 1961 AY 2005-06 Income-tax Appellate Tribunal

Income-tax Act, 1961 AY 2005-06, 2007-08, Commissioner of Income 2008-09, 2009-10, 2010-11, Tax (Appeals) 2011-12

Tamil Nadu VAT Act, 2006 AY 2006-07, 2007-08, Appellant Deputy 2008-09, 2009-10 Commissioner of Commercial Taxes

* net of Rs. 1,272,500 paid under protest

^ net of Rs.2,500,000 paid under protest

@ net of Rs. 554,793 paid under protest

for B S R and Co

Chartered Accountants

Firm registration No. – 128510W

Rajesh Mehra

Partner

Membership No.: 103145

Place: Mumbai

Date : May 30, 2014


Jun 30, 2013

Report on the financial statements

We have audited the accompanying financial statements of Indo Tech Transformers Limited (the "Company"), which comprise the balance sheet as at June 30, 2013, the statement of profit and loss and the cash flow statement for the fifteen 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.

Opinion

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

(a) in the case of the balance sheet, of the state of affairs of the Company as at June 30, 2013;

(b) in the case of the statement of profit and loss, of the !oss foi the fifteen months period ended on that date; and

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

Emphasis of matter

We draw attention to note 2(a) to the financial statements which more fully discusses the going font em related matters. Based on the current business plans, independent impairment testing and availability of banking limits, the Company believe:, thai it would be able to meet its financial requirements and no adjustments would be required in respect of the cairying value of assets/liabilities. Accordingly, the financial statement have been prepared on a going concern basis.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report! Order, 2003 ("the Order"), as amended, issued by the Ceniral 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.

2. As required by section 2271 ''>) of the Ac I, we repoil thai:

(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 bv law have been kept by the Company so far as appeais from our examination of those books;

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

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

(e) On the basis of written representations received from the directors as at June 30, 2013, and taken on record by the board of directors, we report that none oi the directors is disqualified as at )une 30, 201 3, from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 19.56;

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation 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 two 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. No material discrepancies were noticed on such verification.

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

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

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

(c) On the basis of our examination of the records of inventory, we are of the opinion that the Company has maintained proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material and have been properly dealt with in the books of account.

(iii) The Company has neither granted nor taken any loan, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Thus, paragraph 4(iii) of the Order is not applicable.

(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 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, 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 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 its size and the nature of its business.

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1 956 in respect of power transformers and 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, excise duty, customs duty, service tax, and other material statutory dues have generally been regularly deposited during the period by the Company with the appropriate authorities except in respect of income tax deducted at source where the Company has delays ranging from 1-23 days and income tax deductible at source estimated at Rs. 12.96 million which has not been deducted / paid. As explained to us, the Company did not have any dues on account of wealth tax and investor education and protection fund.

According to the information and explanations given to us, except for tax deduction at source amounting to Rs.11.15 million, which is outstanding for more than six months as at the period end, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, cess and other material statutory dues were in arrears as at June 30, 201 3-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 relating to income tax, sales tax, and customs duty that have not been deposited by the Company on account of disputes are given in Appendix I.

(x) The accumulated losses of the Company, as at the period end are more than fifty percent of its net worth. The Company has incurred cash losses in the financial period and in the immediately preceding financial year.

(xi) In our opinion and according to the information and Explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institution or debenture holders during the period.

(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) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we arc ol the opinion that the funds raised on .short-term basis estimated at Rs. 594 million have been used for long-term purposes.

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

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

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit. for B S R and Co Chartered Accountants Firm registration No. - 128510W

Zubin Shekary

Partner

Membership No.: 048814

Place:

Date: August 14, 2013


Mar 31, 2012

1. We have audited the attached balance sheet of Indo Tech Transformers Limited ("the Company") as at March 31,2012, the statement of profit and loss 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 auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

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

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 oi account;

d. in our opinion, the balance sheet, statement of profit and loss and cash flow statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e. on the basis of written representations received from the directors as on March 31,2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956; and

f. 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, 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, 2012;

ii. in the case of the statement of profit and loss, of the loss for the year ended on that date; and

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

Annexure to the Auditors' Report to the Members of Indo Tech Transformers Limited for the year ended March 31, 2012

(Referred to in our report of even date)

i. a) The Company has maintained records showing full particulars and situation of fixed assets. The Company has initiated the process of strengthening the records so as to include comprehensive details of quantitative information.

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 two 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. No material discrepancies were noticed on such verification.

c) Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption.

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

b) In our opinion, the procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of the records of inventory, we are of the opinion that the Company has maintained proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material and have been properly dealt with in the books of account.

iii. The Company has neither granted nor taken any loan, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Thus, paragraph 4(iii) of the Order is not applicable.

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 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, 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 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 its size and the nature of its business.

viii. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 in respect of power transformers and 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, excise duty, customs duty, service tax, and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities except in respect of income tax deductible at source estimated at Rs. 7.89 million which has not been deducted/paid. As explained to us, the Company did not have any dues on account of wealth tax and investor education and protection fund.

According to the information and explanations given to us, except for tax deduction at source amounting to Rs. 5.42 million, which is outstanding for more than six months as at the year end, no undisputed amounts payable in respect of provident fund, employees' state insurance, income-tax, sales tax, service tax, customs duty, excise duty, cess and other material statutory dues were in arrears as at March 31, 2012 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 following dues of income tax, sales tax, and customs duty have not been deposited by the Company on account of disputes:

Name of the Statute Nature of the dues Amount (In Rs.)

The Customs Act, 1962 Customs Duty 1,417,317*

The Central Excise Act, 1944 Excise Duty 151,772

The Central Sales Tax Act, 1956 Central Sales Tax 441,618

TNGST, 1959 Penalty 15,607

The Central Sales Tax Act, 1956 Central Sates Tax 170,332*

The Central Sales Tax Act, 1956 Central Sales Tax 191,276*

Income-tax Act, 1961 Income tax 5,548,581

Income-tax Act, 1961 Income tax 6,334,963

Income-tax Act, 1961 Income tax 5,129,608

Income-tax Act, 1961 Income tax 7,487,500

The Customs Act, 1962 Penalty 25,421,484*

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

The Customs Act, 1962 FY 2004-05 Custom Excise and Service Tax Appellate Tribunal, Chennai

The Central Excise Act, 1944 FY 2008-09 Assistant Commissioner of Central Excise, Chennai

The Central Sales Tax Act, 1956 FY 1996-97 Madras High Court

TNGST, 1959 FY 1996-97 Appellate Assistant Commission

The Central Sales Tax Act, 1956 FY 2005-06 Assistant Commissioner of Commercial Taxes, Chennai

The Central Sales Tax Act, 1956 FY 2006-07 Assistant Commissioner of Commercial Taxes, Chennai

Income tax Act, 1961 AY 2005-06 Commissioner of Income Tax (Appeals)

Income tax Act, 1961 AY 2006-07 Commissioner of Income Tax (Appeals)

Income tax Act, 1961 AY 2008-09 Commissioner of Income Tax (Appeals)

Income tax Act, 1961 AY 2009-10 Commissioner of Income Tax (Appeals)

The Customs Act, 1962 2003 to 2005 Joint Director Ceneral of Foreign Trade, Chennai

* net of amount paid under protest.

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

xi. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institution or debenture holders 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. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis estimated at Rs. 104,494,700 have been used for long-term purposes.

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

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

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

For B S R and Co

Chartered Accountants

Firm registration No.-128510W

Zubin Shekary

Partner

Membership No.: 048814

Place: Bangalore

Date :May 14,2012


Mar 31, 2011

1. We have audited the attached balance sheet of Indo Tech Transformers 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 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:

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, 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 comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

0 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, 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, 2011;

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

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

ANNEXURE TO THE AUDITORS REPORT To The Members INDO TECH TRANSFORMERS LIMITED

i. a) The Company has maintained records showing full particulars and situation of fixed assets. However the Company needs to further strengthen its records so as to include comprehensive details of quantitative information.

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 two 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. No material discrepancies were noticed on such verification.

c) Fixed assets disposed off during the year were not substantial and therefore do not affect the going concern assumption.

ii. a) The inventory, except stocks lying with third parties, has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained.

b) In our opinion, the procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

c) On the basis of our examination of the records of inventory, we are of the opinion that the Company has maintained proper records of inventory. The discrepancies noticed on verification between physical stocks and the book records were not material and have been properly dealt with in the books of account.

iii. The Company has neither granted nor taken any loan, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act,1956. Thus, paragraph 4(iii) of the Order is not applicable.

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 Companys specialised requirements and similarly certain goods sold 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, 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 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 its size and the nature of its business.

viii.We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956 in respect of power transformers and 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, excise duty, customs duty, service tax, and other material statutory dues have generally been regularly deposited during the year by the Company with the appropriate authorities except in respect of income tax deductible at source estimated at Rs. 4.6 million which has not been deducted / paid. As explained to us, the Company did not have any dues on account of wealth tax and investor education and protection fund. There were no dues on account of cess under section 441A of the Companies Act, 1956 since the aforesaid section has not yet been made effective by the Central Government.

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, 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 information and explanations given to us, the following dues of income tax, sales tax, and customs duty have not been deposited by the Company on account of disputes:

Name of the Statute Nature of the dues Amount Period to which the Forum where dispute (In Rs.) amount relates is pending

The Customs Act, 1962 Customs Duty 1,417,317* FY 2004-05 Custom Excise and Service Tax Appellate Tribunal, Chennai

The Central Central Sales Tax 441,618 FY 1996-97 Madras High Court Sales Tax Act, 1956

TNGST, 1959 Penalty 15,607 FY 1996-97 Appellate Assis tant Commission

Income-tax Act, 1961 Income tax 5,548,581 AY 2005-06 Commissioner of Income Tax (Appeals)

Income-tax Act, 1961 Income tax 6,334,963 AY 2006-07 Commissioner of Income Tax (Appeals)

Income-tax Act, 1961 Income tax 5,129,608 AY 2008-09 Commissioner of Income Tax (Appeals)

The Customs Act, 1962 Penalty 29,395,120 2003 to 2005 Joint Director General of Foreign Trade, Chennai

* net of amount paid under protest.

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

xi. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its bankers. The Company did not have any outstanding dues to any financial institution or debenture holders 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.ln 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.According to the information and explanations given to us and on an overall examination 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 investments.

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

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

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

For B S R and Co Chartered Accountants Firm registration No. - 128510W

S Sethuraman Partner Membership No.: 203491

Place: Chennai Date :May 13, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of INDO TECH TRANSFORMERS LIMITED ("the Company") as at March 31, 2010, the Profit and Loss Account and also the Cash Flow Statement ("the financial statements") for the year ended on that date, annexed thereto, signed by us under reference to this report. 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. In accordance with the provisions of Section 227 of the Companies Act, 1956, we report that

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

b. In our opinion, proper books of accounts, as required by law, have been kept by the company so far as appears from the examination of those books.

c. The financial statements dealt with by this report are in agreement with the books of accounts.

d. In our opinion, the aforesaid financial statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

e. On the basis of written representations received from the Directors as on March 31, 2010, and taken on record by the Board of Directors of the Company, we report that none of the directors is prima facie 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.

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

5. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements read with the Statement on Significant Accounting Policies in Schedule "A" and Notes on Accounts in Schedule "B", give the information required by the Companies Act, 1956, in the manner so required and also 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 loss for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT

01. FIXED ASSETS:

a. The Company is maintaining proper records showing full particulars including quantitative details and situation of its fixed assets. The Company is in the process of updating the fixed Assets register.

b. As explained to us, the fixed assets have been physically verified by the management, at reasonable intervals and no material discrepancies were noticed on such verification.

c. The Company has not disposed off any substantial part of its fixed assets during the year.

02. INVENTORIES:

a. As explained to us, inventories have been physically verified during the year by the management at reasonable intervals.

b. As per the information given to us, the procedures for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c. The company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

03. LOANS:

a. According to the information and explanations given to us, the company has not granted any loans, secured or unsecured, to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

b. According to the information and explanations given to us, the company has not taken any loans, secured or unsecured, from companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

04. INTERNAL CONTROL SYSTEM:

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 with regard to the purchase of inventory and fixed assets and for sale of goods and services.

Further, on the basis of our examination of the books and records of the Company, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

05. CONTRACTS (or) ARRANGEMENTS:

In our opinion and according to the information and explanations given to us

i. The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section, and

ii. The transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

06. PUBLIC DEPOSITS:

The Company has not accepted any deposits from the public and hence compliance with the directives issued by the Reserve Bank of India and the provisions of Section 58A, 58AA or any other relevant provisions of the Act and the rules framed there under are not applicable.

07. INTERNAL AUDIT SYSTEM:

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

08. COST AUDIT RECORDS:

We have broadly reviewed the books of accounts and records maintained by the company pursuant to the rules prescribed by the Central Government for the maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956, in respect of power transformers and are of the opinion that prima facie the prescribed accounts and records have been maintained. The content of these accounts and records have not been examined by us.

09. STATUTORY DUES:

a. According to the records produced and based on the information and explanations given to us, the company is regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues, as applicable, with the appropriate authorities during the year.

b. As per the books and records produced to us, there were no undisputed statutory dues outstanding for more than 6 months as at March 31, 2010.

c. According to the information and explanations give to us and the records of the Company examined by us, the details of the statutory dues as at March 31, 2010, which have not been deposited on account of dispute, are as under:

Name of the Nature of the dues Amount Forum where dispute Statute (In Rs.) is pending

The Customs Customs Duty 14,17,317 CESTAT Act, 1962

The Service Service Tax, Interest & 1,59,253 Commissioner (Appeals) Tax, 1994 Penalty on GTA Services

The Central Sales Demand for the Financial 4,41,618 High Court Tax Act, 1956 Year 1996-97

The Central Sales Demand for the Financial 2,23,430 Tribunal Authority Tax Act, 1956 Year 2000-01

TNCST Demand for the Financial 15,607 Appellate Assistant Act, 1959 Year 1996-97 Commissioner

Income Tax Demand for the 18,79,032 Commissioner (Appeals) Act, 1961 Assessment Year 2005-06

Income Tax Demand for the 63,34,963 Commissioner (Appeals)

Act, 1961 Assessment Year 2006-07

The Industrial Demand for incentive 1,11,182 High Court Disputes Act, claimed by workers 1947

Customs Penalty for 2000-01 293,95,120 (D-GFT, Chennai Act, 1944

10. ACCUMULATED LOSSES:

The company does not have any accumulated losses as at March 31, 2010. The company has not incurred cash losses in the immediately preceding financial year, however it has incurred cash losses for the current financial year ended March 31, 2010.

11. DUES TO FINANCIAL INSTITUTIONS/BANKS:

The company has not defaulted in repayment of dues to any financial institutions/ bank/ debenture holders during the year.

12. LOANS BY PLEDGE OF SHARES:

According to the information and explanations given to us, 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. CHIT FUND COMPANY:

The provisions of any special statute applicable to a chit fund/nidhi/mutual benefit fund/societies are not applicable to the Company.

14. TRADING IN SHARES-COMPANY:

According to the information and explanations given to us, in our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. The company has invested its surplus funds in mutual funds. According to the information and explanations given to us, proper records have been maintained of the

transactions and contracts and timely entries have been made therein. The investments in mutual funds have been held by the company in its own name.

15. GUARANTEES:

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. TERM LOANS - APPLICATION:

In our opinion and according to the information and explanations given to us, the term loans availed by the Company were prima facie, applied for the purposes for which they were obtained.

17. BORROWED FUNDS-USAGE:

On an overall examination of the financial statements of the company, funds raised on short term basis have, prima facie, not been used during the year for long term investment.

18. PREFERENTIAL ALLOTMENT OF SHARES:

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

19. DEBENTURES:

The company has not issued any debentures during the year.

20. PUBLIC ISSUE:

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

21. FRAUD AND INTENTIONAL MISREPRESENTATION:

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, which have been relied upon by us, we report that no fraud on or by the company has been noticed or reported during the course of our audit for the year.

For G. BALU ASSOCIATES

Chartered Accountants

RAJAGOPALAN, B.

Partner

Membership No. : 217187

Firm Registration No. 000376 S

Place: Chennai

Date : 14th May, 2010

 
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