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Auditor Report of Lakshmi Machine Works Ltd.

Mar 31, 2014

We have audited the accompanying financial statements of M/s Lakshmi Machine Works Limited (''the Company'') which comprise the Balance Sheet as at 31 March 2014, 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 flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of section 211 of the Companies Act, 1 956 ("the Act") read with the General Circular 15/2013 dated 13th September 201 3 of the Ministry of Corporate Affairs in respect of section 1 33 of the Companies Act, 201 3. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility:

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

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

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

Opinion:

In our opinion and to the best of our information and according

I to the explanations given to us, the financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(ii) In the case of the Statement of Profit and Loss, of the profit 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.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued bythe 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 bylaw have been kept by the Company so far as appears from our examination of those books;

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act, 1956 read with the General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 1 33 of the Companies Act, 2013 and

e. On the basis of written representations received from the directors as on 31 March 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1 956.

ANNEXURE TO THE AUDITORS'' REPORT

The Annexure referred to in our report to the members of M/s Lakshmi Machine Works Limited ("the Company") for the year ended 31 March 2014. We report that:

1. In respect of its Fixed Assets:

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

b. The company has physically verified fixed assets during the year in accordance with a regular and phased programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and nature of its assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c. The company has not disposed off any substantial part of fixed assets during the year that affects the going concern assumption.

2. In respect of its inventories:

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

b. In our opinion and according to the information and explanations given to us, the procedures of 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. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification as compared to the book records.

3. (a) The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) During the year the company has not given any unsecured loans to parties covered in the register maintained under Section 301 of the Companies Act, 1956. However, in respect of loans given in an earlier year the maximum amount outstanding during the year was Rs.650 Lakhs and the year end balance was Rs.450 Lakhs.

(c) In our opinion, the rate of interest and other terms and conditions on which loans have been given are not prima facie, prejudicial to the interests of the company and the repayment of principal amount and payment of interest are regular as stipulated and there are no overdue amounts.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. We have not observed any major weaknesses in internal control systems during the course of our audit.

5. In respect of contracts or arrangements referred to in Sec. 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, particulars of such contracts or arrangements have been entered in the register required to be maintained under Sec. 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, 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.

6. The company has not accepted any deposits from the public and as such clause 4(vi) of the Order is not applicable.

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Sec. 209(1 )(d) of the Companies Act, 1956, as applicable to the company, and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. According to the information and explanations given to us in respect of the statutory dues:

a. The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during theyear. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2014 for a period of more than six months from the date they became payable.

b. The details of disputed statutory dues are as under:

Name of the Statute Nature of the Amount Amount paid/ dues [Rs.in Lakhs] adjusted

Central Excise Act, 1944 Excise Duty 472.63 NIL

Income Tax Act, 1961 Income Tax and 653.26 329.14 Interest



Name of the Statue Forum where dispute is pending

Central Excise Act, 1944 Appellate authorities upto Commissioner''s Level Rs 309.17 Lakhs

CESTAT Rs 141.76 Lakhs

High Court Rs 21.70 Lakhs

Income Tax Act, 1961 Commissioner of Income Tax (Appeals) T 543.20 Lakhs

ITAT Rs. 110.06 Lakhs

10. The company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. The company has no borrowings from financial institutions, banks and debenture holders and as such reporting under clause (xi) of the Order is not applicable to the company.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/ society and as such reporting under clause (xiii) of the Order is not applicable to the company.

14. The company is not dealing or trading in shares, securities, debentures and other investments and as such clause (xiv) of the Order is not applicable to the company.

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

16. To the best of our knowledge and belief and according to the information and explanations given to us, no term loans were availed by the company during the year.

17. The company has not raised any funds on short term basis.

18. The company has not made any preferential allotment of shares during theyear.

19. The company has not issued any debentures during theyear.

20. The company has not raised any money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year that causes the financial statements to be materially misstated.

For M.S.JAGANNATHAN & VISVANATHAN For SUBBACHAR & SRINIVASAN

Firm Regn.No: 001209S Firm Regn. No: 004083S

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANTS

[M J .VIJAYARAGHAVAN] [T. S.V. RAJAGOPAL]

Partner Partner

Membership No: 7534 Membership No:200380

Place: Coimbatore

Date: 23rd May, 2014


Mar 31, 2013

Report on the Financial Statements:

We have audited the accompanying financial statements of M/s Lakshmi Machine Works Limited (''the Company'') which comprise the Balance Sheet as at 31 March 2013, 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 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 misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion:

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

(i) In the case of the Balance Sheet, of the state of affairs of the Company as at 31 March 2013;

(ii) In the case of the Statement of Profit and Loss, of the profit 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.

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 Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

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

Annexure to the Independent Auditors'' Report

The Annexure referred to in our report to the members of M/s Lakshmi Machine Works Limited (''the Company'') for the year ended 31st March 2013. We report that:

1. In respect of its Fixed Assets:

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

b. The company has physically verified fixed assets during the year in accordance with a regular and phased programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and nature of its assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c. The company has not disposed off any substantial part of fixed assets during the year that affects the going concern assumption.

2. In respect of its inventories:

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

b. In our opinion and according to the information and explanations given to us, the procedures of 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. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification as compared to the book records.

3. a The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b During the year the company has not given any unsecured loans to parties covered in the register maintained under Section 301 of the Companies Act, 1956. However, in respect of one loan given in an earlier year the maximum amount outstanding during the year was Rs. 850 lakhs and the year end balance was Rs. 650 lakhs.

c In our opinion, the rate of interest and other terms and conditions on which loans have been given are not prima facie, prejudicial to the interests of the company and the repayment of principal amount and payment of interest are regular as stipulated and there are no overdue amounts.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. We have not observed any major weaknesses in internal control systems during the course of our audit.

5. In respect of contracts or arrangements referred to in Sec. 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, particulars of such contracts or arrangements have been entered in the register required to be maintained under Sec. 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, 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.

6. The company has not accepted any deposits from the public and as such clause 4(vi) of the Order is not applicable.

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies(Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Sec. 209(1 )(d) of the Companies Act, 1956, as applicable to the company, and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. According to the information and explanations given to us in respect of the statutory dues:

a. The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Wealth tax, Service Tax, Sales Tax, Customs duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2013 for a period of more than six months from the date they became payable.

b. The details of disputed statutory dues are as under:

Name of the Nature of the Amount Amount paid/ Forum where dispute is pending Statute dues [Rs. In lakhs] adjusted

Central Excise Act, 1944 Excise Duty 443.99 NIL Appellate authorities

Upto Commissioner''s

Level -- Rs. 357.10 lakhs

CESTAT -- Rs. 65.20 lakhs

High Court-- Rs. 21.69 lakhs

Income Tax Act, 1961 Income tax and 513.05 NIL Commissioner of Income Tax Interest (Appeals) -- Rs. 477.60 lakhs

ITAT -- Rs. 35.45 lakhs

10. The company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. The company has no borrowings from financial institutions, banks and debenture holders and as such reporting under clause (xi) of the Order is not applicable to the company.

12. In our opinion and according to the information and explanations given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/Society and as such reporting under clause (xiii) of the Order is not applicable to the company.

14. The company is not dealing or trading in shares, securities, debentures and other investments and as such reporting under clause (xiv) of the Order is not applicable to the company.

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

16. To the best of our knowledge and belief and according to the information and explanations given to us, no term loans were availed by the company during the year.

17. The company has not raised any funds on short term basis.

18. The company has not made any preferential allotment of shares during the year.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year that causes the financial statements to be materially misstated.

For SUBBACHAR & SRINIVASAN For M.S.JAGANNATHAN & VISVANATHAN

Firm Regn.No: 004083S Firm Regn. No: 001209S

Chartered Accountants Chartered Accountants

[T.S.V.RAJAGOPAL] [M.V. JEGANATHAN]

Partner Partner

Membership No: 200380 Membership No:214178

Coimbatore

22-May-2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of LAKSHMI MACHINE WORKS LIMITED as at 31st March 2012, the Statement of Profit & Loss and also 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 Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we 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 those books

c) The Balance Sheet, Statement of Profit & 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 & Loss and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in Section 211 (3C) of the Companies Act, 1956.

e) On the basis of the written representations received from the Directors, as on 31 st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors is, prima facie, disqualified as on 31 st March, 2012 from being appointed as a Director in terms of Clause (g) of subsection (1) of Section 274 of the Companies Act, 1956.

f) In our opinion and to the best of our information and according to the explanations given to us, they said accounts read with the statement of significant accounting policies and the notes to the accounts, give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

1) in the case of the Balance Sheet of the state of affairs of the Company as at 31 st March 2012 and

2) in the case of Statement of Profit & Loss, of the Profit of the Company for the year ended on that date.

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

1. In respect of its Fixed Assets:

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

b. The company has physically verified fixed assets during the year in accordance with a regular and phased programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and nature of its assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c. The company has not disposed off any substantial part of fixed assets during the year that affects the going concern assumption.

2. In respect of its inventories:

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

b. In our opinion and according to the information and explanations given to us, the procedures of 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. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification as compared to the book records.

3. a) The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) During the year the company has given an unsecured loan of Rs1,000 Lakhs to one party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount outstanding during the year in respect of this loan and the loans to two other parties given in the earlier years, was Rs2,500 Lakhs and their yearend balance was Rs1,100 Lakhs.

c) In our opinion, the rate of interest and other terms and conditions on which loans have been given are not prima facie, prejudicial to the interests of the company and the repayment of principal amount and payment of interest are regular as stipulated and there are no overdue amounts.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. We have not observed any major weaknesses in internal control systems during the course of our audit.

5. In respect of contracts or arrangements referred to in Sec. 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, particulars of such contracts or arrangements have been entered in the register required to be maintained under Sec. 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, 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.

6. The company has not accepted any deposits from the public and as such clause 4(vi) of the Order is not applicable.

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

8. We have broadly reviewed the cost records maintained by the company pursuant to the Companies(Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Sec. 209(1 )(d) of the Companies Act, 1956, as applicable to the company, and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. According to the information and explanations given to us in respect of the statutory dues:

a. The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs Duty, Excise Duty, Cess and any other Statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2012 for a period of more than six months from the date they became payable.

b. The details of disputed statutory dues are as under:

Name of the Nature of Amount Amount paid / Forum where dispute Statute the dues (Rs. in adjusted is pending Lakhs)

Central Excise Act, 1944 Excise Duty 385.59 NIL Appellate authorities

Upto Commissioner's Level - Rs279.58 Lakhs CESTAT - Rs84.67 Lakhs High Court-Rs21.34 Lakhs

Income Tax Act Income tax and Interest 274.51 NIL Commissioner of Income Tax

(Appeals) Rs274.51 Lakhs

10. The company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/society and as such reporting under clause (xiii) of the Order is not applicable to the company.

14. The company is not dealing or trading in shares, securities, debentures and other investments and as such clause (xiv) of the Order is not applicable to the company.

1 5. 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. To the best of our knowledge and belief and according to the information and explanations given to us, no term loans were availed by the company during the year.

17. The company has not raised any funds on short terms basis.

18. The company has not made any preferential allotment of shares during the year.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year that causes the financial statements to be materially misstated.

For M.S.Jagannathan & Visvanathan For Subbachar & Srinivasan

Firm Regn.No: 001209S Firm Regn. No: 004083S

Chartered Accountants Chartered Accountants

[M.J. Vijayaraghavan] [T.S.V. Rajagopal]

Partner Partner

Membership No: 7534 Membership No:200380

Coimbatore

23rd May, 2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of LAKSHMI MACHINE WORKS LIMITED as at 31st March 2011, the Profit & Loss Account and also the Cash Flow Statement 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 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 Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub- section (4A) of section 227 of the Companies Act, 1956, we 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 those books

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

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956.

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

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

1) in the case of the Balance Sheet of the state of affairs of the Company as at 31 st March 2011 and

2) in the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date.

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

ANNEXURE TO THE AUDITORS' REPORT [Referred to in Para 3 of our Audit Report of even date]

1. In respect of its Fixed Assets:

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

b. The company has physically verified fixed assets during the year in accordance with a regular and phased programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and nature of its assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c. The company has not disposed off any substantial part of fixed assets during the year that affects the going concern assumption.

2. In respect of its inventories:

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

b. In our opinion and according to the information and explanations given to us, the procedures of 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. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification as compared to the book records.

3. a. The company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b. During the year the company has not given any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956. In respect of loans to three parties already given in previous years the maximum amount outstanding during the year was Rs. 191,400,000 and the year end balance was Rs. 186,000,000.

c. In our opinion, the rate of interest and other terms and conditions on which loans have been given are not prima facie, prejudicial to the interests of the company and the repayment of principal amount and payment of interest are regular as stipulated and there are no overdue amounts.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. We have not observed any major weaknesses in internal control systems during the course of our audit.

5. In respect of contracts or arrangements referred to in Sec. 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, particulars of such contracts or arrangements have been entered in the register required to be maintained under Sec. 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, 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.

6. The company has not accepted any deposits from the public and as such clause 4(vi) of the Order is not applicable.

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

8. We have broadly reviewed the books of account and records maintained by the company as applicable to it pursuant to Sec. 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of these records.

9. According to the information and explanations given to us in respect of the statutory dues:

a. The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and protection Fund, Employees' State insurance, Income tax, Wealth tax, Service Tax, Sales Tax, Customs duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2011 for a period of more than six months from the date they became payable.

b. The details of disputed statutory dues are as under:

Name of the Nature of Amount Amount paid/ Forum where Statute the dues [Rs. In lakhs] adjusted dispute is pending

Central Excise Excise Duty 440.58 Nil Appellate Authorities Act, 1944 Upto Commissioner's Level Rs. 345.80 lakhs CESTAT Rs. 68.73 lakhs High Court Rs. 26.05 lakhs

Income Tax Act, 1961 Income tax and 342.56 88.24 Commissioner of Income Tax interest (Appeals)Rs.342.56 lakhs

10. The company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a Chit Fund or a N id hi/Mutual Benefit Fund/society and as such reporting under clause (xiii) of the Order is not applicable to the company.

14. The company is not dealing or trading in shares, securities, debentures and other investments and as such clause (xiv) of the Order is not applicable to the company.

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

16. To the best of our knowledge and belief and according to the information and explanations given to us, no term loans were availed by the company during the year.

17. The company has not raised any funds on short terms basis.

18. The company has not made any preferential allotment of shares during the year.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year that causes the financial statements to be materially misstated.

For M.S. Jagannathan & Visvanathan For Subbachar & Srinivasan

Firm Regn. No: 001209S Firm Regn. No: 004083S

Chartered Accountants Chartered Accountants

M.J. Vijayaraaghavan T.S.V. Rajagopal

Partner Partner

Membership No: 7534 Membership No: 200380

Place: Coimbatore

Date: 20th May, 2011










Mar 31, 2010

1. We have audited the attached Balance Sheet of LAKSHMI MACHINE WORKS LIMITED as at 31st March 2010, the Profit & Loss Account and also 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 have 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 Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we 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 ouraudit.

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, Profit & Loss Account and Cash Flow Statement dealt with by this report are in agreement with the books of account.

d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the mandatory Accounting Standards referred to in Section 211(3C)oftheCompaniesAct, 1956.

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

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

1) in the case of the Balance Sheet of the state of affairs of the Company as at 31 st March 2010and

2) in the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date.

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

ANNEXURE TO THE AUDITORS REPORT

[Referred to in Para 3 of our Audit Report of even date]

1. In respect of its Fixed Assets:

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

b. The company has physically verified certain fixed assets during the year in accordance with a regular programme of verification, which in our opinion provides for physical verification of all the fixed assets at reasonable intervals having regard to the size of the company and nature of its assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.

c. The company has not disposed off any substantial part of fixed assets during the year that affects the going concern assumption.

2. In respect of its inventories:

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

b. In our opinion and according to the information and explanations given to us, the procedures of 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. In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification as compared to the book records.

3. (a) The company has not taken any loans,

secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(b) During the year the company has given a secured loan of Rs. 9,000,000 to one party and an unsecured loan of Rs. 125,000,000 to one party covered in the register maintained under Section 301 of the Companies Act, 1956. The

maximum amount outstanding during the year in respect of the above parties was Rs. 170,000,000 and the year end balance was Rs. 166,400,000.

(c) In our opinion, the rate of interest and other terms and conditions on which loans have been given are not prima facie, prejudicial to the interests of the company.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business for the purchase of inventory, fixed assets and also for the sale of goods and services. We have not observed any major weaknesses in internal control systems during the course of our audit.

5. In respect of contracts or arrangements referred to in Sec. 301 of the Companies Act, 1956:

a. In our opinion and according to the information and explanations given to us, particulars of such contracts or arrangements have been entered in the register required to be maintained under Sec. 301 of the Companies Act, 1956.

b. In our opinion and according to the information and explanations given to us, 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.

6. The company has not accepted any deposits from the public and as such clause (vi) of the Order is not applicable.

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

8. We have broadly reviewed the books of account and records maintained by the company as applicable to it pursuant to Sec. 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of these records.

9. According to the information and explanations given to us in respect of the statutory dues:

a. The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Wealth Tax, Service Tax, Sales Tax, Customs

Duty, Excise Duty, Cess and any other statutory dues with the appropriate authorities during the year. According to the information and explanations given to us, no undisputed amounts payable in respect of the aforesaid dues were outstanding as at 31st March 2010 for a period of more than six months from the date they became payable.

b. The details of disputed statutory dues are as under:

Name of Nature of Amount Amount paid/ Forum where dispute is pending

the Statute the dues [Rs. In lakhs] adjusted

Appellate authorities Upto Commissioners Central Excise Excise Duty 584.96 NIL Level -- Rs. 495.75 lakhs

Act, 1944 & Penalty CESTAT --Rs. 67.86 lakhs

High Court--Rs. 21.35 lakhs

10. The company has no accumulated losses and has not incurred any cash losses during the financial year covered by our audit and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues to financial institutions, banks and debenture holders.

12. In our opinion and according to the information and explanation given to us, no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a Chit Fund or a Nidhi/Mutual Benefit Fund/society and as such reporting under clause (xiii) of the Order is not applicable to the company.

14. The company is not dealing or trading in shares, securities, debentures and other investments and as such clause (xiv) of the Order is not applicable to the company.

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

16. To the best of our knowledge and belief and according to the information and explanations given to us, no term loans were availed by the company during the year.

17. The company has not raised any funds on short terms basis.

18. The company has not made any preferential allotment of shares during the year.

19. The company has not issued any debentures during the year.

20. The company has not raised any money by public issue during the year.

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company was noticed or reported during the year that causes the financial statements to be materially misstated.



For M S Jagannathan & Visvanathan

Chartered Accountants, Auditors Firm Registration No. : 001209S

per M J Vijayaraaghavan

(Partner) Membership No.7534

Chennai

24th May, 2010

For Subbachar & Srinivasan

Firm Registration No. : 004083S Chartered Accountants, Auditors

per T S V Rajagopal

(Partner) Membership No. 200380

 
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