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Auditor Report of Minda Industries Ltd.

Mar 31, 2016

We have audited the accompanying financial statements of Minda Industries Limited ("the Company"), which comprise the Balance Sheet as at 31 March 2016,the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

2. Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

3. Auditor''s Responsibility

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

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

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March, 2016, and its profit and its cash flows for the year ended on that date.

5. Report on Other Legal and Regulatory Requirements

(i) 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 paragraphs 3 and 4 of the Order.

(ii) As required by section 143 (3) of the Act, we report that:

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

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

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

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

e. On the basis of written representations received from the directors as on 31 March,2016 taken on record by the Board of Directors, none of the directors is disqualified 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 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 Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note 33 to the financial statements;

ii. the Company did not have any long-term contracts for which there were any material foreseeable losses and has disclosed derivative contracts in its financial statements - Refer note 52 to the financial statements; and

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 Auditor''s Report to the members of Minda Industries Limited on the financial statements for the year ended 31 March 2016

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

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

(c) According to the information and explanations given to us and based on the examination of the records, the Company holds title deeds of the immovable properties as on balance sheet date.

(ii) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, para 3(iii) of the Order is not applicable.

(iv) The Company has not given any loans or provided security as specified under section 185 and 186 of the Companies Act, 2013. In respect of investments made and guarantee provided, the Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013.

(v) According to the information and explanations given to us, the Company has not accepted any deposits as mentioned in the directives issued by the Reserve Bank of India and the provisions of section 73 to 76 or any other relevant provisions of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to rules specified by the Central Government for maintenance of cost records under section 148 (1) of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not carried out a detailed examination of the records with a view to determine whether these are accurate or complete.

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

(b ) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Income-tax, Sales-tax, Service tax, Duty of custom, Duty of Excise, Value Added Tax, Cess and other material statutory dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable, except for change of land use (CLU) charges amounting to Rs.69.18 lacs to Town and Country Planning Chandigarh.

(c) According to the information and explanations given to us, other than the amounts reported below, there are no amounts in respect of Income-tax, Sales-tax, Service tax, duty of custom, Value added tax and cess that have not been deposited by the Company with the appropriate authorities on account of any dispute.

Name of the statute Nature of the dues Amount Period to which Forum where dispute is (in Rs. Lacs) the amount relates pending (Financial year)

Income Tax Act, 1961 Income Tax 169.94 2001-02 & Referred back to AO by Delhi 2006-2007 High Court

Income Tax Act, 1961 Income Tax 416.36 2005-2006 & Income Tax Appellate Tribunal 2009-2010

Name of the statute Nature of the dues Amount Period to which Forum where dispute is (in Rs. Lacs) the amount relates pending (Financial year)

Income Tax Act, 1961 Transfer Pricing- 686.00 2005-2006 Referred back to Dispute Against Section 143(3) Resolution Panel by Income and Section 144C Tax Appellate Tribunal

Cenvat Credit Rules, 2004 Credit on input service 91.82 2008-2009 to Additional Commissioner of 2013-2014 Central Excise

Cenvat Credit Rules, 2004 Credit on input service 32.96 2008-2009 to Commissioner (Appeals) of 2009-2010 Central Excise

Cenvat Credit Rules, 2004 Credit on input service 105.84 2005-2006 to Appeal before CESTAT 2009-2010

Central Excise Act, 1944 Sales Tax Subsidy 35.61 2004-2005 to Appeal before CESTAT 2007-2008

Haryana Value Added Tax Variance on stock 68.35 2011-2012 Appeal before CESTAT Act, 2003 verification

(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of loans or borrowings to banks. The Company did not had any outstanding debentures or dues on account of loans or borrowings to any financial institution or to government during the year.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments), hence reporting under clause (ix) of the Order is not applicable to such extent. Term loans have been applied for the purpose for which it was raised.

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

(xi) According to the information and explanation given 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..

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us, the Company is in compliance with Section 177 and section 188 of the Companies Act, 2013, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) In our opinion and according to the information and explanation given to us, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debenture during the year and hence reporting under clause (xiv) of Order is 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 with him and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

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

For B S R & Co. LLP

Chartered Accountants

Firm Registration

No. 101248W/W-100022

Rajiv Goyal

Place: Gurgaon Partner

Date: 21 May 2016 Membership No. 094549


Mar 31, 2014

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

Managements Responsibility for the Financial Statements

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

Auditors Responsibility

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information

required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

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

Annexure to the Auditors report

(Referred to in our report of even date)

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

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

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

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

(b) In our opinion and according to the information and explanations given to us, the procedures for the physical verification of inventories and of obtaining confirmations for stock lying with third parties followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventories. As informed to us, the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

(iii) (a) The Company had granted loan to a company covered in the register maintained under section 301 of the Companies Act, 1956 in previous years. The maximum amount outstanding during the year was Rs 225 lacs and the year-end balance of such loan is Rs Nil.

(b) In our opinion, the rate of interest and other terms and conditions on which the loan had been granted to the company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(c) There were no stipulations on repayment of principal and interest as the same was repayable on demand. Hence, we are unable to comment on the regularity of payment of principal and the overdue amount as per Para (iii) (c) and (d) of the Order, if any, due to the company covered in the register maintained under Section 301 of the Companies Act, 1956. The loan was however repaid during the current year.

(d) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, forms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, Para (iii) (e) to (g) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventory and fixed assets are for the Company''s specialised requirements and similarly certain goods sold and services rendered are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventories and fxed assets and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that Section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in para (v)(a) above and exceeding the value of Rs. 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for purchases of certain items of inventories and fixed assets which are for the Company''s specialised requirements and similarly for sale of certain goods and services which are for the specialised requirements of the buyers and for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any new deposits during the year. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A, Section 58AA or other relevant provisions of the Companies Act, 1956 and the rules framed there under/ the directives issued by the Reserve Bank of India (as applicable) with regard to deposits accepted from the public in earlier years and outstanding as at 1 April 2013 and repaid during the year. As informed to us, there have been no proceedings before the Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal in this matter and no order has been passed by any of the aforesaid authorities.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1) (d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including

Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax, Wealth tax, Service Tax, Customs duty, Excise duty and other material statutory dues have been generally regularly deposited during the year by the Company with the appropriate authorities, though there has been a delay in a few cases in respect of value added tax, withholding taxes and service tax. As explained to us, the Company did not have any dues on account of Investor Education and Protection Fund.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales tax, Service Tax, Wealth tax, Customs duty, Excise duty and other material statutory dues were in arrears as at 31 March 2014 for a period of more than six months from the date they became payable except for change of land use (CLU) charges to Town and Country Planning, Chandigarh.

(b) According to the information and explanations given to us, there are no dues on account of Income tax, Sales tax, Wealth tax, Customs duty, Excise duty and Service tax which have not been deposited with the appropriate authorities on account of any dispute, except as mentioned in Annexure – 1.

(x) The Company did not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

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

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

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

(xv) The Company has given guarantees for loan taken by others from banks. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks are not prejudicial to the interest of the Company. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from financial institutions.

(xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

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

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

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

Name of the statute Nature of the Dues Amount

(in Lacs)

Income Tax Act,1961 Income tax 7.48

Income Tax Act,1961 Income tax 9.37

Income Tax Act,1961 Income Tax 152

Income Tax Act,1961 Income Tax 162.46

Income Tax Act,1961 Income Tax 55.63

Income Tax Act,1961 Income Tax 33

Income Tax Act,1961 Income Tax 167.49

Income Tax Act,1961 Income Tax 32.99

Income Tax Act,1961 Income Tax 7.97

Income Tax Act,1961 Income Tax 42.48

Income Tax Act,1961 Transfer pricing - Against Section 686

143(3) and Section 144C

Cenvat Credit Rules 2004 Credit on input services 17.59

Cenvat Credit Rules 2004 Credit on input services 18.05

Cenvat Credit Rules 2004 Credit on input services 11.51

Cenvat Credit Rules 2004 Credit on input services 49.94

Cenvat Credit Rules 2004 Credit on input services 11.52

Cenvat Credit Rules 2004 Credit on input services 18.90

Central Excise Act, 1944 Sale Tax Subsidy 35.61

Cenvat Credit Rules 2004 Credit on input services 4.29

Cenvat Credit Rules 2004 Credit on input services 11.44

Uttar Pradesh Vat Act Demand for fling incomplete Form 38 18

Cenvat Credit Rules 2004 Credit on input services 2.75

Cenvat Credit Rules 2004 Credit on input service 3.81

Cenvat Credit Rules 2004 Credit on input services 3.85

Cenvat Credit Rules 2004 Credit on input services 6.62

Cenvat Credit Rules 2004 Credit on input services 15.38

Cenvat Credit Rules 2004 Credit on input services 4.13

Cenvat Credit Rules 2004 Credit on input services 6.97

Cenvat Credit Rules 2004 Credit on input services 3.36

Cenvat Credit Rules 2004 Credit on input services 3.76

Cenvat Credit Rules 2004 Credit on input services 2.48

Haryana Value Added Tax Act, Variance on stock verifcation 68.35 2003

Name of the statue Financial Forum where dispute is pending Year to which matter pertains

Income Tax Act, 1961 2001 - 2002 Referred back to AO by Delhi High Court

Income Tax Act,1961 2002 - 2003 Income tax Appellate Tribunal

Income Tax Act,1961 2005 - 2006 Income tax Appellate Tribunal

Income Tax Act,1961 2006 - 2007 Referred back to AO by Delhi High Court

Income Tax Act,1961 2006 - 2007 Income tax Appellate Tribunal

Income Tax Act,1961 2007 - 2008 Income tax Appellate Tribunal

Imcome Tax Act,1961 2008 - 2009 Commissioner (Appeals) of Income tax

Income Tax Act,1961 2009 - 2010 Commissioner (Appeals) of Income tax

Income Tax Act,1961 2010-2011 Commissioner (Appeals) of Income tax

Income Tax Act,1961 2011-2012 Commissioner (Appeals) of Income tax

Income Tax Act,1961 2005-2006 Referred back to Dispute Resolution Panel by Income tax Appellate Tribunal

Cenvat Credit Rules 2004 2008-2009 Commissioner (Appeals) of Central Excise

Cenvat Credit Rules 2004 2006-2007 Appeal before CESTAT

Cenvat Credit Rules 2004 2008-2009 Commissioner (Appeals) of Central Excise

Cenvat Credit Rules 2004 2009-2010 Appeal before CESTAT

Cenvat Credit Rules 2004 2008-2009 Additional Commissioner of Central Excise

Cenvat Credit Rules 2004 2010-2011 Commissioner (Appeals) of Central Excise

Central Excise Act 1944 2004-2005 to Appeal before CESTAT 2007-2008

Cenvat Credit Rules 2004 2005-2006 to Appeal before CESTAT 2008-2009

Cenvat Credit Rules 2004 2005-2006 to Appeal before CESTAT 2009-2010

Uttar Pradesh Act 2011-2012 Commercial Tax Tribunal

Cenvat Credit Rules 2004 2006-2007 to Commissioner (Appeals) of Central Excise 2008-2009

Cenvat Credit Rules 2004 2006-2007 to Commissioner (Appeals) of Central Excise 2010-2011

Cenvat Credit Rules 2004 2008-2009 to Commissioner (Appeals) of Central Excise 2009-2010

Cenvat Credit Rules 2004 2008-2009 Appeal before CESTAT

Cenvat Credit Rules 2004 2009-2010 Appeal before CESTAT

Cenvat Credit Rules 2004 2010-2011 Appeal before CESTAT

Cenvat Credit Rules 2004 2010-2011to Deputy Commissioner of Central Excise 2013-2014

Cenvat Credit Rules 2004 2011-2012 Commissioner (Appeals) of Central Excise

Cenvat Credit Rules 2004 2012-2013 Commissioner (Appeals) of Central Excise

Cenvat Credit Rules 2004 2011-2012 Appeal before CESTAT

Haryana Value Added Tax,2003 2011-2012 Excise and Taxation Commissioner (Appeals)

For B S R & Co. LLP

Chartered Accountants Firms Registration No.: 101248W

Vikram Advani

Place : Gurgaon Partner

Date : 27 May 2014 Membership No.: 091765


Mar 31, 2013

Report on the Financial Statements

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

Management responsibility for the Financial Statements

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

Auditor''s responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

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

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

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

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

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

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

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

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

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

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

(b) In our opinion and according to the information and explanations given to us, the procedures for the physical verification of inventories and of obtaining confirmations for stock lying with third parties followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventories. As informed to us, the discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of accounts.

(iii) (a) The Company has granted loan to a company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount outstanding during the year was Rs.225 lacs and the year-end balance of such loan is Rs.225 lacs.

(b) In our opinion, the rate of interest and other terms and conditions on which the loan has been granted to the company listed in the register maintained under section 301 of the Companies Act, 1956 are not, prima facie, prejudicial to the interest of the company.

(c) There are no stipulations on repayment of principal and interest as the same is repayable on demand. Hence, we are unable to comment on the regularity of payment of principal and the overdue amount as per Para (iii) (c) and (d) of the Order, if any, due to the company covered in the register maintained under Section 301 of the Companies Act, 1956.

(d) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, para (iii) (e) to (g) of the Order is not applicable to the Company.

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

(v) (a) According to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in para (v)(a) above and exceeding the value of Rs.5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for purchases of certain items of inventories and fixed assets which are for the Company''s specialised requirements and similarly for sale of certain goods and services which are for the specialised requirements of the buyers and for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any new deposits during the year. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A, Section 58AA or other relevant provisions of the Companies Act, 1956 and the rules framed thereunder/ the directives issued by the

Reserve Bank of India (as applicable) with regard to deposits accepted from the public in earlier years. As informed to us, there have been no proceedings before the Company Law Board or National Company Law Tribunal (as applicable) or Reserve Bank of India or any Court or any other Tribunal in this matter and no order has been passed by any of the aforesaid authorities.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

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

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales tax, Service tax, Wealth tax, Customs duty, Excise duty and other material statutory dues were in arrears as at 31 March 2013 for a period of more than six months from the date they became except for Change of land use (CLU) charges to Town and Country Planning, Chandigarh.

(b) According to the information and explanations given to us, there are no dues on account of Income tax, Sales tax, Wealth tax, Customs duty, Excise duty and Service tax which have not been deposited with the appropriate authorities on account of any dispute, except as mentioned in Annexure – 1.

(x) The Company did not have any accumulated losses at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

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

(xii) According to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

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

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

(xv) The Company has given guarantees for loan taken by others from banks. In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from banks are not prejudicial to the interest of the Company. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from financial institutions.

(xvi) According to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

(xviii) According to the information and explanations given to us, the Company has not made any preferential allotment of shares during the year to parties and Companies covered in the register maintained under section 301 of the Companies Act, 1956.

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

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

(xxi) According to the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the course of our audit. Name of the statute Nature of the dues Amount (Rs. in Lacs)

Income Tax Act,1961 Income tax 7.48

Income Tax Act,1961 Income tax 9.37

Income Tax Act,1961 Income tax 152

Income Tax Act,1961 Income tax 162.46

Income Tax Act,1961 Income tax 55.63

Income Tax Act,1961 Income tax 33

Income Tax Act,1961 Income tax 147.94

Income Tax Act,1961 Income tax 0.36

Income Tax Act,1961 Transfer pricing 686 against section 143(3) and section 144C

Cenvat Credit Rules 2004 Credit on input services 96.77

Cenvat Credit Rules 2004 Credit on input services 17.59

Cenvat Credit Rules 2004 Credit on input services 21.06

Cenvat Credit Rules 2004 Credit on input services 11.51

Cenvat Credit Rules 2004 Credit on input services 10.59

Cenvat Credit Rules 2004 Credit on input services 31.43

Cenvat Credit Rules 2004 Credit on input services 31.65

Cenvat Credit Rules 2004 Credit on input services 54.09

Cenvat Credit Rules 2004 Credit on input services 18.90

Central Excise Act, 1944 Excise duty 35.61

Cenvat Credit Rules 2004 Credit on input services 4.29

Cenvat Credit Rules 2004 Credit on input services 11.44

Central Excise Act, 1944 Denial of exemption 273.41 notification no. 50/2003

Cenvat Credit Rules 2004 Credit on input services 5.36

Cenvat Credit Rules 2004 Credit on input services 3.81

Cenvat Credit Rules 2004 Credit on input services 7.64

Haryana VAT Act Demand for filing of 9.90 short Form D-1

Cenvat Credit Rules 2004 Credit on input services 3.85

Cenvat Credit Rules 2004 Credit on input 3.47 services

Cenvat Credit Rules 2004 Denial of Cenvat credit 4.97

Name Financial year Forum where dispute is pending to which matter pertains

Income Tax Act,1961 2001 - 2002 Referred back to AO by Delhi High Court

Income Tax Act,1961 2002 - 2003 Income tax Appellate Tribunal

Income Tax Act,1961 2005 - 2006 Income tax Appellate Tribunal

Income Tax Act,1961 2006 – 2007 Referred back to AO by Delhi High Court

Income Tax Act,1961 2006 – 2007 Income tax Appellate Tribunal

Income Tax Act,1961 2007 – 2008 Income tax Appellate Tribunal

Income Tax Act,1961 2008 – 2009 Commissioner (Appeals) of Income tax

Income Tax Act,1961 2009 – 2010 Commissioner (Appeals) of Income tax

Cenvat Credit Rules 2004 2005 – 2006 Referred back to Dispute Resolution Panel by Income tax Appellate Tribunal

Cenvat Credit Rules 2004 2007-2008 to Appeal before CESTAT 2008-2009

Cenvat Credit Rules 2004 2008-2009 Commissioner (Appeals) of Central Excise

Cenvat Credit Rules 2004 2006-2007 Appeal before CESTAT

Cenvat Credit Rules 2004 2008-2009 Commissioner (Appeals) of Central Excise

Cenvat Credit Rules 2004 2008-2009 Appeal before CESTAT

Cenvat Credit Rules 2004 2010-2011 Additional Commissioner of Central Excise

Cenvat Credit Rules 2004 2010-2011 SCN reply filed to Additional Commissioner

Cenvat Credit Rules 2004 2009-2010 Commissioner (Appeals) of Central Excise

Cenvat Credit Rules 2004 2010-2011 Commissioner (Appeals) of Central Excise

Cenvat Credit Rules 2004 2004-2005 to Commissioner (Appeals) of Central Excise 2007-2008

Cenvat Credit Rules 2004 2005-2006 to Appeal before CESTAT 2008-2009

Cenvat Credit Rules 2004 2005-2006 to Commissioner (Appeals) of Central Excise 2009-2010

Cenvat Credit Rules 2004 2007-2008 to SCN reply filed to Commissioner of Central

Cenvat Credit Rules 2004 2011-2012 Excise 2006-2007 to Commissioner (Appeals) of Central Excise 2007-2008

Cenvat Credit Rules 2004 2006-2007 to Deputy Commissioner of Central Excise 2010-2011

Cenvat Credit Rules 2004 2006-2007 to Commissioner (Appeals) of Central Excise 2010-2011

Cenvat Credit Rules 2004 2008-2009 Joint Commissioner of Central Excise

Cenvat Credit Rules 2004 2008-2009 to Commissioner (Appeals) of Central Excise 2009-2010

Cenvat Credit Rules 2004 2008-2009 to Commissioner (Appeals) of Central Excise 2010-2011

Cenvat Credit Rules 2004 2011-2012 Commissioner (Appeals) of Central Excise

For B S R & Co.

Chartered Accountants

Firm registration no.: 101248W

Vikram Advani

Place: Gurgaon Partner

Date: 24 May 2013 Membership no.: 091765


Mar 31, 2010

We have audited the attached Balance Sheet of Minda Industries Limited as at March 31, 2010 and also the Profit and Loss Account and the Cash flow Statement for the year ended on that date annexed thereto( collectively referred as the Financial Statements). 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.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

(ii) In our opinion, proper books of account as required by the law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branch. The

Branch Auditors report has been forwarded to us and has been appropriately dealt with;

(iii) The Financial Statements dealt with by this report are in agreement with the books of account and with the audited returns from the branch;

(iv) In our opinion, the Financial Statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) On the basis of written representations received from the Directors as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

(vi) In our opinion and to the best of our information and according to the explanation given to us, the said financial statements together with schedule 1 to 16 and to read with notes B (3) and B (4) on schedule 16 with regard to changes in providing depreciation and valuation of inventories and effect thereof on the profit for the year, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(b) In the case of Profit and Loss Account, of the Profit for the year ended on that date; and

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

ANNEXURE REFERRED TO THE AUDITORS REPORT OF EVEN DATE TO THE MEMBERS OF MINDA INDUSTRIES LTD ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2010.

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

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

(b) The fixed assets of the company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years. Pursuant to the programme, physical verification of certain assets was carried out during the year and no material discrepancies between physical inventories and book records were noticed.

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

(ii) (a) The inventories have been physically verified by the management at reasonable intervals. In our opinion the frequency of verification is reasonable.

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

(c) The Company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) (a) During the year, the company has taken unsecured loan from one company and three other parties covered in the register maintained under section 301 of the Companies Act, 1956. The balance at the beginning of the year was Rs. 886.89 Lacs, amount taken during the year is Rs. 280.00 Lacs and paid during the year was Rs. 939.76 Lacs and balance outstanding at the year end is Rs. 227.13 Lacs.

The company has not granted any loan to companies, firms and other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) In our opinion, the rate of interest and other terms and conditions on which the loans have been taken from a company and other related parties covered in the register maintained under section 301 of the Companies Act, 1956 are not prima facie prejudicial to the interest of the company.

(c) The company is regular in repaying the principal amount and interest.

(iv) In our opinion, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchase of inventory, fixed assets and for sale of goods and services. We have not observed any continuing failure to correct major weaknesses in internal controls during the course of audit.

(v) (a) In our opinion, the particulars of the contracts or arrangements referred to in section 301 of the Companies Act,1956 that need to be entered into the register maintained under section 301 of the Companies Act,1956 have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements exceeding value of Rupees Five Lacs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time except in respect of certain items, which are of special nature and suitable alternate sources do not exist for obtaining comparative quotations.

(vi) In our opinion and according to the information and explanations given to us, the directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA of the Companies Act, 1956 or any other related provisions of the Act and Companies (Acceptance of Deposits) Rules, 1975 with regard to deposit accepted from the public, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board or National Company Law Tribunal, Reserve Bank of India or any other court or other tribunal.

(vii) An outside agency has carried out internal audit during the year. In our opinion, the internal audit system of the company is commensurate with its size and nature of its business.

(viii) The Central Government of India has prescribed the maintenance of cost records by the Company under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956. On the basis of the records produced, we are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not carried out a detailed examination of such accounts and records.

(ix) (a) According to the records, information and explanations provided to us, the Company is generally regular in depositing with appropriate authorities undisputed amount of provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable to it and no undisputed amounts payable were outstanding as at 31st March, 2010 for a period of more than six months from the date they became payable;

(b) According to the information and explanation given to us and the records of the company examined by us at March 31, 2010, there have no dues in respect of income tax, sales tax, wealth tax, service tax, custom duty, excise duty and cess that have not been deposited on account of dispute other than certain disputed income tax, excise duty and Service Tax dues, the details of which are as follows :

Nature of Statute Nature of Dues Rs. in Lacs

Income Tax Act Income Tax 7.86

Income Tax Act Income Tax 9.89

Income Tax Act Income Tax 127.30

Income Tax Act Income Tax 41.97

Central Excise Act Central Excise 35.64 duty

Service Tax Service Tax 7.27

Service Tax Service Tax 4.28

Service Tax Service Tax 2.83

Service Tax Service Tax 2.92

Nature of Statue Financial Year Forum where dispute to which is pending matter pertains

Income Tax Act 2000-01 Commissioner (Appeal)

Income Tax Act 2001-02 Commissioner (Appeal)

Income Tax Act 2005-06 Commissioner (Appeal)

Income Tax Act 2006-07 Commissioner (Appeal)

Central Excise Act 2004-05 to Additional Commissioner 2007-08 (Central Excise)

Service Tax 2005-06 to Commissioner 2008-09 Central Excise

Service Tax 2005-06 to Commissioner 2008-09 Central Excise (Appeal)

Service Tax 2006-07 to Assistant Commissioner 2007-08 (Central Excise)

Service Tax 2008-09 Assistant Commissioner (Central Excise)

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to any bank and financial institutions. The company has not issued any debentures.

(xii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities;

(xiii) The Company is not a chit fund/nidhi/mutual benefit fund/society, therefore, clause 4 (xiii) of the Companies (Auditors Report) Order, 2003 (as amended) is not applicable.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditors Report) Order, 2003, (as amended) is not applicable.

(xv) The Company has given guarantee for loan taken by others from banks. The terms and conditions whereof in our opinion are not prima facie prejudicial to the interest of the company.

(xvi) In our opinion, the term loans have been applied for the purpose for which they were raised.

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

(xviii) The Company has made preferential allotment of shares during the year to parties and Companies covered in the Register maintained under section 301 of the Companies Act, 1956 and in our opinion the price at which shares have been issued is not prejudicial to the interest of the company.

(xix) The Company did not have any outstanding debentures during the year, therefore, clause 4(xix) of Companies (Auditors Report) Order, 2003 (as amended) is not applicable.

(xx) The Company has not raised any money by public issues during the year, therefore clause 4(xx) of the Companies (Auditors Report) Order, 2003 (as amended) is not applicable.

(xxi) Based on the audit procedures performed and information and explanations given to us by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For R.N. SARAF & CO. Chartered Accountants

(Regn. No. 002023N)

Place :New Delhi R.N. SARAF, F.C.A.

Date : May 27, 2010 Membership No. 12439

 
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