Auditor Report of Leel Electricals Ltd.

Mar 31, 2018

Report on the Standalone Indian Accounting Standards (IND AS) Financial Statements

We have audited the accompanying standalone Ind AS financial statements of LEEL ELECTRICALS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2018, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Ind AS Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and 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 standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

We have taken into account the provisions of the Act and the Rules made thereunder including 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 of the standalone Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 standalone Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. 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 standalone Ind AS financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS 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, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matter

The standalone Ind AS financial statements of the Company for the year ended March 31, 2017, were audited by other firm of chartered accountants under the Companies Act, 2013 who, vide their report dated May 30, 2017, expressed an unmodified opinion on those financial statements. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

(c) The Balance Sheet, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flow and the Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, as applicable.

(e) On the basis of the written representations received from the directors as on 31st March, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

(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 knowledge and belief and according to the information and explanations given to us:

(i) The company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its standalone Ind AS financial statements - refer note 36.

(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 no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.

(iv) The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018

2. As required by the Companies (Auditor''s Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act ("the Order"), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

Annexure A to the Independent Auditors'' Report

Referred to in paragraph 1(f) of the report on other legal and regulatory requirements of the Independent Auditors'' Report of even date to the members of LEEL Electricals Limited on the standalone Ind AS financial statements as of and for the year ended March 31, 2018.

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act.

We have audited the internal financial controls with reference to financial statements of LEEL ELECTRICALS LIMITED ("the Company") as of March 31, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system with reference to financial statements.

Meaning of Internal financial controls with reference to financial statements

A company''s internal financial controls with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial controls with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Limitations of Internal financial controls with reference to financial statements

Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial controls with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Annexure B to the Independent Auditors'' Report

Referred to in paragraph 2 of the report on other legal and regulatory requirements of the Independent Auditors'' Report of even date to the members of LEEL Electricals Limited on the standalone Ind AS financial statements as of and for the year ended March 31, 2018, we report that:

(i) In respect of the Company''s Property, plant and equipment:

(a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets (Property, plant and equipment and other Intangible assets).

(b) The Property, plant and equipment are physically verified by the Management according to a phased programme designed to cover all the items over a period of one year which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the Property, plant and equipment has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) According to the information and explanations given to us, the records examined by us and based on the examination of the conveyance deeds provided to us, we report that, immovable properties of land that have been taken on lease and disclosed as Property, plant and equipment in the standalone Ind AS financial statements, the lease agreements are in the name of the Company. The Company does not have any freehold land.

(ii) The physical verification of inventory excluding stocks with third parties have been conducted at reasonable intervals by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. The discrepancies noticed on physical verification of inventory as compared to books and records were not material and have been appropriately dealt with in the books of accounts.

(iii) The Company has granted unsecured loans to two subsidiary companies, covered in the register maintained under Section 189 of the Act. The Company has not granted any secured/unsecured loans to firms /LLPs/ other parties covered in the register maintained under Section 189 of the Act:

(a) The terms and conditions of the grant of such loans are, in our opinion, prima facie, not prejudicial to the Company''s interest.

(b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations for one subsidiary. The other subsidiary has filed insolvency and the company has fully provided allowance for doubtful outstanding loan and interest thereon.

(c) There is no overdue amount remaining outstanding as at the year-end.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, in respect of loans and investments made, and guarantees and securities provided by it.

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

(vi) Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, 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 the records with a view to determine whether they are accurate or complete.

(vii) According to the information and explanations given to us, in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Value Added Tax, Customs Duty, Excise Duty, Cess, Goods and Service Tax (with effect from July 1, 2017), and other material statutory dues, as applicable, with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Service Tax, Value Added Tax, Customs Duty, Excise Duty, Cess, Goods and Service Tax (with effect from July 1, 2017), and other material statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable.

(c) Details of dues of Customs Duty and Excise Duty which have not been deposited as at March 31, 2018 on account of dispute are given below:

Nature of the statute	Nature of dues	Forum where Dispute is Pending	Period to which the Amount Relates	Amount Rs. Crores
Customs Act,1962	Customs Duty	CESTAT, Allahabad	2014-15	0.11
Customs Act,1962	Customs Duty	Deputy Commissioner, Custom, Noida	2015-16	0.04
Central Excise Act, 1944	Excise Duty	CESTAT, Jaipur	2017-18	1.93
Customs Act,1962	Customs Duty	CESTAT, Mumbai	2015-16	46.23
Central Excise Act, 1944	Excise Duty	Commissioner (Appeals) Jaipur	2017-18	0.81

(viii) According to the records of the Company examined by us and information and explanations given to us, the Company has not defaulted during the year in repayment of loans and borrowings to any financial institution or bank. The Company does not have any dues to debenture holders or outstanding loans or borrowings from government during the year.

(ix) In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied for the purposes for which they were obtained. During the year, the Company has not raised moneys by way of initial public offer or further public offer (including debt instruments).

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules,2014 are not applicable to it, the provisions of clause 3 (xii) of the Order are not applicable to the Company.

(xiii) The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Indian Accounting Standards (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act.

(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly paid convertible debentures. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or persons connected to its directors. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company.

For Goel Garg & Co.

Chartered Accountants

Firm''s Registration Number 000397N

Ashok Kumar Agarwal

Place of Signature: New Delhi Partner

Date: May 30, 2018 Membership Number 084600

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Mar 31, 2017

Report on the Standalone Indian Accounting Standards (IND AS) Financial Statements

We have audited the accompanying standalone IND AS financial statements of LEEL Electricals Limited (Formerly known as Lloyd Electric & Engineering Limited) (‘the Company’), which comprise the balance sheet as at 31st March, 2017, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the IND AS Standalone Financial Statements

The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation and presentation of these standalone IND AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the (IND AS) prescribed under Section 133 of the Act, read with the Companies (Accounts) Rules, 2014 and the Companies (Indian Accounting Standard) Rules, 2015, as amended. 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 standalone IND AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone IND AS 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 standalone IND AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone IND AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the standalone IND AS 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 standalone IND AS financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 standalone IND AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone IND AS 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, including IND AS, of the financial position of the Company as at 31st March, 2017 and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.

Emphasis of Matter

The Company had, with the approval of Board of Directors in its Board Meeting held on February 18, 2017 and shareholders’ approval by way of postal ballot, the result of which was declared on March 24, 2017, sold its Consumer Durables Business alongwith its Brand ‘LLOYD’ as a going concern on a slump sale basis to Havells India Limited. The aforesaid transaction was concluded on May 8, 2017 for a consideration of Rs.1,550 Crores subject to closing adjustments. The sale of the Consumer Durables Business will not have any impact on the Company’s existing B2B air conditioning business. Our opinion is not modified in respect of the matter.

Pursuant to aforesaid sale, the Company has also changed its name from ‘Lloyd Electric & Engineering Ltd.’ to ‘LEEL Electricals Ltd.’ with the approval of Central Government on May 23, 2017.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 3 and 4 of the order.

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

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

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

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

(d) In our opinion, the aforesaid standalone IND AS financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the Directors as on 31st March, 2017 and taken on record by the Board of Directors, none of the Directors is disqualified as on 31st March, 2017 from being appointed as a Director in terms of Section 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

(g) With respect to the other matters to be included in the Auditors’ 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 standalone IND AS financial statements have disclosed the impact of pending litigations on the financial position of the Company as referred to in Note No. 36;

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

iii. The Company was not required to transfer funds to the Investor Education and Protection Fund during the financial year under review.

iv. The Company has provided requisite disclosures in its standalone IND AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016 and those are in accordance with the books of accounts maintained by the Company. Refer Note 48 of the standalone IND AS financial statements.

Annexure - A to the Auditors’ Report

The Annexure referred to in Independent Auditors’ Report to the members of the Company on the standalone IND AS financial statements for the year ended 31st March, 2017, we report that:

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

(b) The fixed assets were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of the fixed assets at reasonable intervals. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

2. a) The inventory has been physically verified during the year by the management at reasonable intervals.

b) The procedures of the physical verification of the inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of the Business.

c) The Company is maintaining proper records of the inventory. The discrepancies noticed on physical stocks and the book records were not material.

3. a) The Company has granted loans, secured or unsecured to companies, firm or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

b) The loans granted to the bodies corporate listed in the register maintained under section 189 of the Act, the borrowers have been regular in the payment of the interest as stipulated. The terms of arrangements do not stipulate any repayment schedule in the loans are repayable on demand. Accordingly, paragraph 4(iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount.

c) There are no overdue amounts in respect of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to the loans and investments made.

5. According to the information and explanations given to us, the Company has not accepted any deposit, in terms of the directive issued by the Reserve Bank of India and the provisions of the Section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed thereunder.

6. We have broadly reviewed the cost records maintained by the Company prescribed by the Central Government under Section 148(1) of the Companies Act, 2013 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.

7. a) According to the records of the Company, the Company is regular in depositing undisputed Statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Excise, Valued Added Tax, cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Service Tax, Excise Duty and Cess were outstanding, at the financial reporting period ending on 31st March, 2017 for a period of more than six months from the date they became payable.

b) As on 31st March, 2017 according to the records of the Company the following are the particulars of disputed dues on account of Excise duty, Custom duty, HP State Electricity Board & Income Tax and have not been deposited.

Particulars	Financial Year	Amount (Rs. In Crores)	Dispute Pending
HP Electricity Board	2009-2010	0.11	Divisional Commissioner Court Shimla Camp at Nahan
Central Excise &	2014-2015	2.97	Commissioner of Customs (Appeals), New Delhi
Customs Matters*	2014-2015	0.11	CESTAT, Allahabad
	2014-2015	0.19	Deputy Commissioner of Customs, ICD TKD, New Delhi
	2015-2016	0.04	Deputy Commissioner, Customs, Noida
Income Tax Matters	2008-2009	0.15	Assessing officer, New Delhi
(Pending rectification)	2010-2011	0.25	Assessing officer, New Delhi
	2011-2012	0.04	Central Processing Centre
	2012-2013	0.82	Assessing officer, New Delhi
	2014-2015	1.69	Central Processing Centre

*In addition to the above, during the period under review, the Company has received total demand of Rs.46.23 Cr. under show cause notices from custom department. The Company has made suitable reply of the same.

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

9. In our opinion and according to the information and explanations given to us, the term loans have been applied for the purposes for which they were obtained. The Company did not raise any money by way of initial public offer or further public offer (including debt instruments) during the year.

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

11. According to the information and explanations give to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

13. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

14. During the financial year the Company has issued and alloted 41.27 Equity Shares of Rs.10 each at a premium of Rs.142 each to promoter group entities on preferential basis upon conversion of equivalent number of warrants. Consequent to the allotment, the Paid-up Equity Share Capital of the Company increased to Rs.40,33,22,600 divided into 4,03,32,260 Equity Shares of face value Rs.10 each. The said shares were duly listed and admitted to trade on BSE Ltd. vide its trading approval no. DCS/PREF/TP/MD/3598/2016-17 dated October 07, 2016 and on National Stock Exchange of India Ltd. vide its trading approval no. NSE/LIST/89739 dated 10th October, 2016. On Balance 9.88 lacs warrants, the warrant holders did not exercise their right to convert warrants as conversion of such number of warrants would have increased their shareholding beyond the permissible creeping limit of 5% in a financial year as stipulated in Regulation 3(2) of the SEBI (Substantial Acquisition of Shares & Takeovers) Regulations, 2011. Accordingly, 9.88 lacs warrants stand cancelled and the upfront subscription money aggregating to Rs.3.75 Crores received on said warrants at the time of their subscription was forfeited. Consequent upon the above allotments and forfeiture of warrants, there are no pending warrants due for conversion as on 31st March, 2017.

15. According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with Directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

For Suresh C. Mathur & Co.

Chartered Accountants

Firm Regn. No. 000891N

(Brijesh C. Mathur)

Place: New Delhi Partner

Dated: May 30, 2017 M. No. 083540

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Mar 31, 2016

Report on the Standalone Financial Statements

We have audited the accompanying standalone fnancial statements of Lloyd Electric & Engineering Limited (''the Company''), which
comprise the balance sheet as at 31 March 2016, the statement of proft and loss and the cash fow statement for the year then
ended, and a summary of signifcant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act")
with respect to the preparation and presentation of these standalone fnancial statements that give a true and fair view of the
fnancial position, fnancial performance and cash fows of the Company in accordance with the accounting principles generally
accepted in India, including the Accounting Standards specifed 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 fnancial controls, that were operating effectively
for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the
fnancial 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 standalone fnancial 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 specifed 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
fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the fnancial
statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material
misstatement of the fnancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers
internal fnancial control relevant to the Company''s preparation of the fnancial statements that give a true and fair view in
order to design audit procedures that are appropriate in the circumstances. 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 fnancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone
fnancial 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 31 March 2016
and its proft and its cash fows for the year ended on that date.

Emphasis of Matter

We draw attention to Note No. 40 of the Standalone fnancial Results regarding writing off Rs. 45.80 Crores as an exceptional item
which relate to fre loss occurred on August 24, 2013 at Company''s warehouse in Kalkaji, New Delhi resulted in loss of stocks and
warehouse. The Insurance Company has declined the insurance claim on certain technical grounds including post claim endorsement.
The Management of the Company has decided to write off the same as a matter of prudence. However, the Company is perusing its
entitlement and has initiated appropriate legal recourse. Our opinion is not modifed in respect of the matter.

1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms
of sub-section (11) of section 143 of the Act, we give in the Annexure A, a statement on the matters specifed in the paragraph 3
and 4 of the order.

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

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

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

(c) The balance sheet, the statement of proft and loss and the cash fow statement dealt with by this Report are in agreement with
the books of account;

(d) In our opinion, the aforesaid standalone fnancial statements comply with the Accounting Standards specifed under Section 133
of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the directors as on 31 March 2016 and taken on record by the Board
of Directors, none of the directors is disqualifed as on 31 March 2016 from being appointed as a director in terms of Section 164
(2) of the Act;

(f) With respect to the adequacy of the internal fnancial controls over fnancial reporting of the Company and the operating
effectiveness of such controls, refer to our separate report in "Annexure B"; and

(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 fnancial statement have disclosed the impact of pending litigations on the fnancial position of the Company as referred
to in Note No. 30;

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

The Annexure referred to in Independent Auditors'' Report to the members of the Company on the standalone fnancial statements for
the year ended 31 March 2016, we report that:

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

(b) The fxed assets were physically verifed during the year by the Management in accordance with a regular programme of
verifcation which, in our opinion, provides for physical verifcation of the fxed assets at reasonable intervals. According to the
information and explanations given to us, no material discrepancies were noticed on such verifcation.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company,
the title deeds of immovable properties are held in the name of the Company.

2. a) The inventory has been physically verifed during the year by the management at reasonable intervals.

b) The procedures of the physical verifcation of the inventories followed by the management are reasonable and adequate in
relation to the size of the Company and the nature of the Business.

c) The Company is maintaining proper records of the inventory. The discrepancies noticed on physical stocks and the book records
were not material.

3. a) The Company has granted loans, secured or unsecured to companies, frm or other parties covered in the register maintained
under section 189 of the Companies Act, 2013.

b) The loans granted to the bodies corporate listed in the register maintained under section 189 of the Act, the borrowers have
been regular in the payment of the interest as stipulated. The terms of arrangements do not stipulate any repayment schedule in
the loans are repayable on demand. Accordingly, paragraph 4(iii)(c) of the Order is not applicable to the Company in respect of
repayment of the principal amount.

c) There are no overdue amounts in respect of the loans granted to the bodies corporate listed in the register maintained under
section 189 of the Act.

4. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of
section 185 and 186 of the Act, with respect to the loans and investments made.

5. According to the information and explanations given to us, the Company has not accepted any deposit, in terms of the
directive issued by the Reserve Bank of India and the provisions of the Section 73 to 76 or any other relevant provisions of the
Companies Act and the rules framed there under.

6. We have broadly reviewed the cost records maintained by the Company prescribed by the Central Government under Section 148(1)
of the Companies Act, 2013 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.

7. a) According to the records of the Company, the Company is regular in depositing undisputed Statutory dues including
Provident

Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Excise, valued added tax, cess and any
other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed
amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Service Tax, Excise Duty and Cess were
outstanding, at the fnancial reporting period ending on 31st March 2016 for a period of more than six months from the date they
became payable.

b) As on 31st March, 2016 according to the records of the Company the following are the particulars of disputed dues on account
of Excise duty, HP State Electricity Board & Income Tax and have not been deposited.

Particulars Financial Amount Dispute Pending
Year (Rs. in
Crores)

HP Electricity
Board 2009-2010 0.11 Divisional Commissioner Court
Shimla Camp at Nahan

Central Excise
& Customs 2006-2007 0.22 CESTAT New Delhi
Matters*
2014-2015 2.97 Commissioner of Customs
(Appeals), New Delhi

2014-2015 0.11 CESTAT, Allahabad

2014-2015 0.19 Deputy Commissioner of Customs,

ICD TKD, New Delhi

2015-2016 0.04 Deputy Commissioner, Customs,
Noida

Income Tax
Matters 2004-2005 0.04 Assessing offcer, New Delhi
(Pending
rectifcation) 2008-2009 0.15 Assessing offcer, New Delhi

2009-2010 0.40 CIT(Appeals), New Delhi

2010-2011 0.25 CIT(Appeals), New Delhi

2011-2012 0.05 CIT(Appeals), New Delhi

2011-2012 2.61 Assessing offcer, New Delhi

*In addition to the above, during the period under review,the Company has received total demand of Rs. 46.23 Cr. under show cause
notices from custom department. The Company has made suitable reply of the same.

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

9. In our opinion, and according to the information and explanations given to us, the term loans have been applied for the
purposes for which they were obtained. The Company did not raise any money by way of initial public offer or further public offer
(including debt instruments) during the year.

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

11. According to the information and explanations give to us and based on our examination of the records of the Company, the
Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Act.

12. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi Company.
Accordingly, paragraph 3(xii) of the Order is not applicable.

13. According to the information and explanations given to us and based on our examination of the records of the Company,
transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such
transactions have been disclosed in the fnancial statements as required by the applicable accounting standards.

14. According to the information and explanations give to us and based on our examination of the records of the Company, the
Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during
the year. However, during the period under review, the Company has allotted 8,85,000 equity shares to promoters group entities
upon conversion of equivalent number warrants after receiving balance 75% consideration.

15. According to the information and explanations given to us and based on our examination of the records of the Company, the
Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of
the Order is not applicable.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal fnancial controls over fnancial reporting of Lloyd Electric & Engineering Limited ("the Company") as
of 31 March 2016 in conjunction with our audit of the standalone fnancial statements of the Company for the year ended on that
date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal fnancial controls based on the internal control
over fnancial reporting criteria established by the Company considering the essential components of internal control stated in
the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered
Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal
fnancial controls that were operating effectively for ensuring the orderly and effcient conduct of its business, including
adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely preparation of reliable fnancial information, as required under the
Companies Act, 2013.

Auditors'' Responsibility

Our responsibility is to express an opinion on the Company''s internal fnancial controls over fnancial reporting based on our
audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial
Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10)
of the Companies Act, 2013, to the extent applicable to an audit of internal fnancial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance
Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal fnancial controls over fnancial reporting was established and maintained and if such controls operated
effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal fnancial controls system
over fnancial reporting and their operating effectiveness. Our audit of internal fnancial controls over fnancial reporting
included obtaining an understanding of internal fnancial controls over fnancial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of
the fnancial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is suffcient and appropriate to provide a basis for our audit opinion on the
Company''s internal fnancial controls system over fnancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company''s internal fnancial control over fnancial reporting is a process designed to provide reasonable assurance regarding the
reliability of fnancial reporting and the preparation of fnancial statements for external purposes in accordance with generally
accepted accounting principles. A Company''s internal fnancial control over fnancial reporting includes those policies and
procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly refect the
transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as
necessary to permit preparation of fnancial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the
Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or
disposition of the Company''s assets that could have a material effect on the fnancial statements.

Because of the inherent limitations of internal fnancial controls over fnancial reporting, including the possibility of collusion
or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also,
projections of any evaluation of the internal fnancial controls over fnancial reporting to future periods are subject to the risk
that the internal fnancial control over fnancial reporting may become inadequate because of changes in conditions, or that the
degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal fnancial controls system over fnancial reporting
and such internal fnancial controls over fnancial reporting were operating effectively as at 31 March 2016, based on the internal
control over fnancial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.

For Suresh C. Mathur & Co.

Chartered Accountants

Firm Regn. No. 000891N

(Brijesh C. Mathur)

Place: New Delhi Partner

Dated: 30.05.2016 M. No. 083540

---

Mar 31, 2015

We have audited the accompanying standalone financial statements of LLOYD ELECTRIC & ENGINEERING LIMITED ("the Company") which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss Account and the Cash Flow Statement for the year 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 matter stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation & presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting 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 control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provision of the Act and 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 the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

An audit involves performing procedures to obtain audit evidence about the amount and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risk 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 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 the effectiveness of the Company's internal control. An audit also includes evaluating the appropriateness of the 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 on the financial statements.

Opinion

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

Report on Other Legal and Regulatory Requirements

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

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 it appears from our examination of those books.

c) The Balance Sheet, the 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 aforesaid standalone financial statements comply with the Accounting Standards under Section 133 of the Act, read with the Rule 7 of the Companies (Accounts) Rules, 2014.

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

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

i) The financial statements have disclosed the impact of pending litigations on the financial positions of the Company as referred in Note 29.

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

REFERRED TO IN PARAGRAPH 1 UNDER 'REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS' SECTION OF OUR REPORT OF EVEN DATE OF LLOYD ELECTRIC & ENGINEERING LIMITED FOR THE YEAR ENDED 31ST MARCH, 2015

1. a) The company has maintained proper records showing full particulars including quantitative details and situation of the Fixed Assets.

b) Fixed Assets have been physically verified by the management during the year.

In our opinion the frequency of such verification is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such physical verification.

2. a) The inventory has been physically verified during the year by the management at reasonable intervals

b) The procedures of the physical verification of the inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of the Business.

c) The Company is maintaining proper records of the inventory. The discrepancies noticed on physical stocks and the book records were not material.

3. a) The Company has taken loans from wholly owned subsidiary Lloyd Coils Europe of Euro 3 Million (equivalent to INR 21.10 crores).

b) In the case of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act, the borrowers have been regular in the payment of the interest as stipulated. The terms of arrangements do not stipulate any repayment schedule in the loans are repayable on demand. Accordingly, paragraph 4(iii)(c) of the Order is not applicable to the Company in respect of repayment of the principal amount.

c) There are no overdue amounts of more than rupees one lakh in respect of the loans granted to the bodies corporate listed in the register maintained under section 189 of the Act.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit we have not observed any continuing failure to correct major weakness in the internal controls system.

5. According to the information and explanations given to us, the Company has not accepted any deposit, in terms of the directive issued by the Reserve Bank of India and the provisions of the Section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

6. We have broadly reviewed the cost records maintained by the Company prescribed by the Central Government under Section 148(1) of the Companies Act, 2013and 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.

7. a) According to the records of the Company, the Company is regular in depositing undisputed Statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Duty of Excise, valued added tax cess and any other statutory dues with the appropriate authorities, however there is some delay in depositing Govt. dues due to financial difficulties. According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Customs Duty, Service Tax, Excise Duty and Cess were outstanding, at the financial reporting period ending on 31st March 2015 for a period of more than six months from the date they became payable.

b) As on 31st March, 2015 according to the records of the Company the following are the particulars of disputed dues on account of Excise duty, HP State Electricity Board and Sales Tax and have not been deposited.

Particulars Financial Year Amount Dispute (Rs.in Lacs) Pending

Excise Duty 2006-2007 21.75 Appellate Tribunal

HP State Electricity Board 2009-2010 10.55 Supreme Court

Sales Tax Authority 2009-2010 83.88 High Court

Further, the company, has received show cause notices from custom department post the balance sheet date. The total demand under show cause notices received is Rs. 46.23 crore.

c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provision of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

8. The company does not have accumulated losses at the end of the financial year. The Company has not incurred any cash loss during the financial year covered by our audit and the immediate preceding financial year.

9. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues of financial institutions, banks and debenture holders.

10. In our opinion and according to the information and explanation given to us, the terms & conditions of the guarantees given by the Company for loan taken by the subsidiary Companies from bank are prima facie not prejudicial to the interest of the company.

11. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purposes for which they were obtained.

12. As per information and explanation given to us no fraud on or by the Company has been noticed or reported during the course of our Audit.

for SURESH C. MATHUR & CO.

Chartered Accountants,

(Firm Registration No. 000891N)

Place : New Delhi (BRIJESH C. MATHUR)

Dated: 28.05.2015 PARTNER

Membership No.-083540

---

Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of LIOYD ELECTRIC & ENGINEERING LIMITED (''''the Company'''') which comprise the Balance Sheet as at 31st March, 2013, the Statement of Profit and Loss Account and the Cash Flow Statement for the year then ended which are revised statements of the original statements of Balance Sheet , the statement of Profit and Loss Account and the cash Flow Statement covered by the audit report of Lloyd Electric & Engineering Limited dated 30th May 2013 and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s 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 Section 211(3C) 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 misstatements, whether due to fraud or error.

The Board of Directors of the Company has reopened and revised the aforesaid Accounts to give effect of operation of Heat Exchanger undertaking of Perfect Radiators & Oil Coolers Pvt. Ltd., which has been demerged and transferred to Lloyd Electric & Engineering Limited as per orders of Hon''ble High Courts of Delhi and Rajasthan dated 8th April 2013 and 31st May 2013 respectively and become effective from 11th June 2013 on filling of the same with the Registrar of Companies , with appointed date as 1st April 2011.

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 ICAI. Those Standards require that we comply with the ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatements.

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

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

Emphasis on the matter

We have considered the earlier auditor''s report dated 30th May 2013 on the original accounts for the yearn ended 31st March, 2013 and have examined the changes made as under :

We draw attention to Note no. 32 to the financial statement and report that the financial statements have been reopened and revised by the Company''s Management pursuant to the orders of the Hon''ble High Courts of Delhi and Rajasthan dated 8th April, 2013 and 31st May, 2013 respectively, approving the Scheme of arrangement which became effective on 11th June 2013 upon filing the said orders with the Registrar of Companies. Pursuant to the order, the Heat exchanger undertaking of Perfect Radiators & Oil Coolers Pvt. Ltd. (PROC) stands demerged and transferred to Lloyd Electric & Engineering Limited (LEEL) with appointed date as 1st April 2011.

Opinion

In our opinion and to the best of the information and according to the explanations given to us, the said account read with Note No. 32 to notes to accounts in the aforesaid financial statements give the information required by the Act in the manner so required and give 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 of the Company for the year ended on that date and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government in terms of Section 227(4A) 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 it appears from our examination of those books.

c) The Balance Sheet, the 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, the statement of Profit & Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

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

REFERRED TO IN PARAGRAPH 1 UNDER ''REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS'' SECTION OF OUR REPORT OF EVEN DATE OF LLOYD ELECTRIC & ENGINEERING LIMITED FOR THE YEAR ENDED 31ST MARCH, 2013

1. a) The Company has maintained proper records showing full particulars including quantitative details and situation of the Fixed Assets.

b) Fixed Assets have been physically verified by the management during the year.

In our opinion the frequency of such verification is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such physical verification.

c) The fixed assets disposed off during the year were not substantial. According to the information and explanation given to us, we are of the opinion that the disposal of the fixed assets has not affect the going concern status of the Company.

2. a) The inventory has been physically verified during the year by the management at reasonable intervals.

b) The procedures of the physical verification of the inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of the Business.

c) The Company is maintaining proper records of the inventory. The discrepancies noticed on physical stocks and the book records were not material.

3. The Company has neither granted nor taken any loans secured or unsecured to/from Companies, Firms and other parties covered in the register maintained u/s 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for the purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit we have not observed any continuing failure to correct major weakness in the internal controls system.

5. In respect of Contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of the knowledge and belief and according to the information and explanation given to us:

a) The particulars of Contracts or arrangements referred to in Section 301 of the Companies act, 1956 that need to be entered in the Register maintained under the said Section have been so entered.

b) Where each of such transaction is in excess of Rupees five lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market price at the relevant time.

6. The Company has not accepted any deposits from the public therefore the provision of Section 58A and 58AA of the Companies Act, 1956 are not applicable to the Company.

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

8. We have broadly reviewed the cost records maintained by the Company and are of 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 records of the Company and Information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. This disputed matter pending before authority is as under:as under:

Particulars Financial Year Amount Dispute (Rs. in Lacs) Pending

Excise Duty 2006-2007 21.75 Appellate Tribunal

Sales Tax 1994-1995 4.76 Rajasthan Tax Board

Income Tax (Penalty) 2006-2007 46.06 CIT (Appeals), N.Delhi

10. The Company does not have accumulated Losses at the end of the financial year. The Company has not incurred any cash loss during the financial year covered by our audit and the immediate preceding financial year.

11. The Company has not defaulted in repayment of dues of financial institution / bank and debenture holders.

12. In our opinion and according to the information and explanations given to us the Company has not granted loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit fund/nidhi/mutual benefit fund. Therefore the provision of the clause 4(xiii) of the Companies (Auditors report) Order, 2003 (as amended) are not applicable to the Company.

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

15. In our opinion and according to the information and explanation given to us, the terms & conditions of the guarantees given by the Company for loan taken by others from banks and financial institutions are prima facie not prejudicial to the interest of the Company.

16. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purposes for which they were obtained.

17. According to the information and explanation given to us, and, on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investments.

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

19. The Company has not issued any Debentures during the year.

20. During the year the Company has not raised any money by way of public issue.

21. As per information and explanation given to us no fraud on or by the Company has been noticed or reported during the course of our Audit.

for SURESH C. MATHUR & CO.

Chartered Accountants,

(Firm Registration No. 000891N)

PLACE : NEW DELHI (BRIJESH C. MATHUR)

DATED : 29thAugust, 2013 PARTNER

Membership No.-083540

---

Mar 31, 2012

We have audited the attached Balance Sheet of LLOYD ELECTRIC & ENGINEERING LIMITED as at 31st March, 2012 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government 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.

3. Further to our comments in the Annexure referred to in the Paragraph 2 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 it 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 & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

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

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

ii) in the case of the Profit & Loss Account, 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.

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITOR’S REPORT OF EVEN DATE ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2012 OF LLOYD ELECTRIC & ENGINEERING LIMITED

On the basis of such checks as we considered appropriate and in terms on the information and explanations given to us, we state that

1. The company has maintained records showing full particulars including quantitative details and situation of the Fixed Assets. As per information given to us, the management has verified the Fixed Assets physically. We understand that no discrepancies were noticed on such physical verification. The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

2. The inventory has been physically verified during the year by the management and in our opinion the frequency of verification is reasonable. According to the information and explanations given to us, in our opinion, the procedures of physical verification of stock followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of stocks as compared to the book records were not material and have been properly dealt with in the books of account.

3. According to the informations given to us the Company has not taken any loans, secured or unsecured from Companies, firms, or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. The Company has granted net Rs.2,872.71 lakhs to Company, Firms listed in the register maintained u/s 301 of the Companies Act.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale goods. During the course of our audit no major weakness has been noticed in the internal controls.

5. In our opinion and according to the information and explanations given to us, there are transactions made in pursuance of contracts of arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakh in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public therefore the provision of Section 58A and 58AA of the Companies Act, 1956 are not applicable to the company.

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

8. We have broadly reviewed the cost records maintained by the Company and are of 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 records of the company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees’ State Insurance, Income-tax, Sales-tax, Wealth-tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. The disputed matter pending before authority is as under:

Particulars Financial Year Amount Dispute (Rs.in Lacs) Pending

Excise Duty 2006-2007 21.75 Appellate Tribunal

Sales Tax 1994-1995 6.34 Rajasthan Tax Board

Income Tax (Penalty) 2007-2008 46.06 CIT(Appeals), N.Delhi

10. The company does not have accumulated Losses at the end of the financial year and has not incurred any cash loss during the financial year covered by our audit and in the immediate preceding financial year.

11. The company has not defaulted in repayment of dues of financial institution / bank as at the Balance Sheet date.

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

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

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

15. In our opinion and according to the information and explanation given to us, the terms & conditions of the guarantees given by the Company for loan taken by the associate/subsidiary Companies from bank are prime facie not prejudicial to the interest of the company.

16. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purposes for which they were obtained.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa.

18. During the year the Company has not raised any money by way of public issue.

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

20. During the year, the Company has not raised any money by way of public issue.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the company, noticed or reported during the year, nor have been informed of such case by management.

for SURESH C. MATHUR & CO.

Chartered Accountants,

(Firm Registration No. 000891N)

PLACE : NEW DELHI (BRIJESH C. MATHUR)

DATED : 8th August, 2012 PARTNER

Membership No.-083540

---

Mar 31, 2011

We have audited the attached Balance Sheet of LLOYD ELECTRIC & ENGINEERING LIMITED as at 31st March, 2011 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government 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.

3. Further to our comments in the Annexure referred to in the Paragraph 2 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 it 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 & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of 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 disqualified as on 31st March, 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

ii) in the case of the Profit & Loss Account, 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.

Annexure to the Auditors’ Report

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITOR’S REPORT OF EVEN DATE ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2011 OF LLOYD ELECTRIC & ENGINEERING LIMITED

On the basis of such checks as we considered appropriate and in terms of the information and explanations given to us, we state that

1. The company has maintained records showing full particulars including quantitative details and situation of the Fixed Assets. As per information given to us, the management has verified the Fixed Assets physically. We understand that no discrepancies were noticed on such physical verification. The Company has not disposed off any substantial part of its fixed assets so as to affect its going concern status.

2. The inventory has been physically verified during the year by the management and in our opinion the frequency of verification is reasonable. According to the information and explanations given to us, in our opinion, the procedures of physical verification of stock followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of stocks as compared to the book records were not material and have been properly dealt with in the books of account.

3. According to the informations given to us the Company has not taken any loans, secured or unsecured from Companies, firms, or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. The Company has granted net Rs.1498.39 lakhs to Company, Firms listed in the register maintained u/s 301 of the Companies Act.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale goods. During the course of our audit no major weakness has been noticed in the internal controls.

5. In our opinion and according to the information and explanations given to us, there are transactions made in pursuance of contracts of arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakh in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public therefore the provision of Section 58A and 58AA of the Companies Act, 1956 are not applicable to the company.

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

8. The Central Government has not prescribed maintenance of cost records u/s 209(1) (d) of the Companies Act 1956 for the products of the company.

9. According to the records of the company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during theyear.The disputed matter pending before authority is as under:

I Particulars Financial Year Amount Dispute (Rs.in Lacs) Pending

Excise Duty 2006-2007 21.75 Appellate Tribunal

10. The company does not have accumulated Losses at the end of the financial year and has not incurred any cash loss during the financial year covered by our audit and the immediate preceding financial year.

11. The company has not defaulted in repayment of dues of financial institution /bankas at the Balance Sheet date.

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

13. The provisions of any special statute applicable to chit fund/nid hi/mutual benefit fund/societies are not applicable to the company.

14. In our opinion and according to the information and explanations given to us, the Company is not a dealer or trader in securities.

15. In our opinion and according to the information and explanation given to us, the terms & conditions of the guarantees given by the Company for loan taken by the associate/subsidiary Companies from bank are prime facie not prejudicial to the interest of the company.

16. In our opinion and according to the information and explanation given to us, the term loans have been applied for the purposes for which they were obtained.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us,on overall basis,funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa.

18. During the year the company has allotted 500 No's 11.25% Secured Redeemable Non-Convertible Debentures @ Rs.10 Lacs each (Refer Schedule C). According to the information and explanations given to us and the records examined by us, charge has been created in respect of the debentures issued.

19. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained undersection 301 oftheCompaniesAct,1956.

20. During the year,the Company has not raised any money by way of public issue.

21. During the course of our examination of the books and records of the company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instances of material fraud on or by the company, noticed or reported during the year, nor have been informed of such case by management.

ForSURESHC.MATHUR&CO.

Chartered Accountants, (Firm Registration No.000891 N)

(BRIJESHC.MATHUR)

PLACE : NEW DELHI PARTNER

DATED: AUGUST 11,2011 MembershipNo.-083540

---

Mar 31, 2010

We have audited the attached Balance Sheet of LLOYD ELECTRIC & ENGINEERING LIMITED as at 31st March, 2010 and also the Profit and Loss Account and the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from any 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor’s Report) Order, 2003 issued by the Central Government 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.

3. Further to our comments in the Annexure referred to in the Paragraph 2 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 it 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 & Loss Account and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

e) On the basis of 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 disqualified as on 31st March, 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

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

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

ii) in the case of the Profit & Loss Account, 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.

ANNEXURE REFERRED TO IN PARAGRAPH 2 OF OUR AUDITOR’S REPORT OF EVEN DATE ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH, 2010 OF LLOYD ELECTRIC & ENGINEERING LIMITED

On the basis of such checks as we considered appropriate and in terms on the information and explanations given to us, we state that

1. The company has maintained records showing full particulars including quantitative details and situation of the Fixed Assets. As per information given to us, the management has verified the Fixed Assets physically. We understand that no discrepancies were noticed on such physical verification.

2. The inventory has been physically verified during the year by the management and in our opinion the frequency of verification is reasonable. According to the information and explanations given to us, in our opinion, the procedures of physical verification of stock followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of stocks as compared to the book records were not material and have been properly dealt with in the books of account.

3. According to the informations given to us the Company has not taken any loans, secured or unsecured from Companies, firms, or other parties listed in the Register maintained under section 301 of the Companies Act, 1956. The Company has granted net Rs.1383.35 lakhs to Company, Firms listed in the register maintained u/s 301 of the Companies Act.

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

5. In our opinion and according to the information and explanations given to us, there are transactions made in pursuance of contracts of arrangements entered in the register maintained under section 301 of the Companies Act, 1956 and exceeding the value of rupees five lakh in respect of any party during the year have been made at prices which are reasonable having regard to prevailing market prices at the relevant time.

6. The Company has not accepted any deposits from the public therefore the provision of Section 58A and 58AA of the Companies Act, 1956 are not applicable to the company.

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

8. The Central Government has not prescribed maintenance of cost records u/s 209(1) (d) of the Companies Act 1956 for the products of the company.

9. According to the records of the company and information and explanations given to us, the Company has been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth-tax, Service Tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities during the year. The disputed matter pending before authority is as under:

Particulars Financial Year Amount Dispute

(Rs.in Lacs) Pending

Excise Duty 2006-2007 21.75 Appellate

Tribunal

10. The company does not have accumulated Losses at the end of the financial year and has not incurred any cash loss during the financial year covered by our audit and the immediate preceding financial year.

11. The company has not defaulted in repayment of dues of financial institution / bank. The Company does not have any outstanding debenture.

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

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

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

15. In our opinion and according to the information and explanation given to us, the terms & conditions of the guarantees given by the Company for loan taken by the associate/subsidiary Companies from bank are prime facie not prejudicial to the interest of the company.

16. According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long term, investment and no long- term funds have been used to finance short term assets.

17. According to the Cash Flow Statement and records examined by us and according to the information and explanations given to us, on overall basis, funds raised on short term basis have, prima facie, not been used during the year for long term investment and vice versa.

18. During the year, since the Company has not issued any debentures, paragraphs 4(xix) of the order is not applicable.

19. During the year, the company acquired 100% ownership interest in special purpose vehicle (spv) Janka Engineering s.r.o. The acquisition of Janka Engineering s.r.o. was funded through internal accruals. The total equity contribution is INR 3317.10 lacs as at 31st March, 2010.

20. During the year, the Company has not raised any money by way of public issue.

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

For SURESH C. MATHUR & CO.

Chartered Accountants,

(Firm Registration No. 000891N)

(BRIJESH C. MATHUR)

Place: New Delhi PARTNER

Dated: August 31, 2010 Membership No.-083540