Auditor Report of Nicco Uco Alliance Credit Ltd.

Mar 31, 2014

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

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 15th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the 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 qualified audit opinion.

Basis for Qualified Opinion

a) Note No. 2.21 regarding cancellation of certificate of registration of the company to carry out non-banking financial activities by Reserve Bank of India (RBI) vide its order dated 31stMarch 2005, against which the company has preferred an appeal before the Appellate Authority for Non-Banking Finance Company (NBFC), Joint Secretary, Ministry of Finance, Govt. of India, New Delhi, which, as stated, is pending.

As the decision with regard to appeal against cancellation of license is pending for reasons as stated in the note above, the accounts of the company have been prepared on going concern assumption on the basis of legal opinion obtained. In the event of adverse decision/ development the financial statements may require necessary adjustments in the value of its assets and liabilities.

b) Note No. 2.3.x regarding default made by the Company in repayment of its Fixed Deposits liability as per order of Company Law Board (CLB) against which legal proceedings have been initiated by Serious Fraud Investigation Office. Please refer Clause 6(c) of annexure to the Auditors Reports.

c) Note No. 2.3.ix regarding non-confirmation of balances by Banks and Financial Institutions (FI''s) in whose Books the account of Company has turned Non Performing Assets (NPAs).

d) Non ascertainment of impairment of assets as required by Accounting Standard (AS)-28 issued by The Companies (Accounting Standards) Rules, 2006. Refer Note No. 2.24.

The impact of above paragraphs on the "Loss After Tax" and "Shareholder''s Funds" of the company is unascertainable. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, 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 March 31,2014;

(b) in the case of the Statement of Profit and Loss, of the loss 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.

Emphasis of matter

Attention is invited to the following points :

(i) Note no. 2.3 and 2.5 regarding application filed by different banks forming the consortium of bankers with Debt Recovery Tribunal for and by International Finance Corporation, Washington with hon''ble Calcutta High Court for recovery of their dues.

(ii) Note no. 2.11 regarding Serious Fraud Investigation against the company on recommendation of Registrars of Companies.

(iii) Note No. 2.36 regarding writ petition pending before Hon''ble High Court at Calcutta challenging the decision of Ministry of Corporate Affairs in regard to extension of term of appointment of Mr. L. N. Kaul, Managing director.

All the above notes are self-explanatory.

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 subsection (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 said Order.

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

a. we have obtained all the information and explanations, subject to our observations made in the above Para which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion, subject to our observations made in the above Para, 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 Reportare in agreement with the books of account;

d. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 read with General Circular 15/2013 dated 15th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013.

e. In view of default in repayment of fixed deposits and interest thereon, all the directors of the company are disqualified as on 31st March, 2014 from being appointed as directors in other public companies in terms of clause (g) of subsection (1) of section 274 of The Companies Act, 1956.

Annexure to the Auditors'' Report

The Annexure referred to in paragraph 1 of Our Report of even date to the members of Nicco Uco Alliance Credit Limited on the financial statements of the company for the year ended 31st March, 2014.

1. (a) Consequent upon the destruction of relevant records due to a fire at office premises the company is not yet been able to

update it records in regard to its fixed assets. However we have been given to understand that the necessary action is in process.

(b) No part of fixed assets has been disposed off during the year.

2. (a) There is no live agreement for lease and hire purchase stock as on date. All such assets have turned Non-performing and necessary provision has been made for the same. Physical verification for the same has not been done during the year. However as explained to us by the management, there is little scope for doing the same.

(b) Since the company has not conducted the physical verification of its inventories the question of following proper procedure does not arise.

3. (a) According to the information and explanations given to us by the management, the company has not given any loan secured or unsecured during the year to Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956 except interest free unsecured advances (net) given to its subsidiary company, the maximum amount outstanding at any time during the year and closing balance as on 31.03.2014 were Rs. 0.40 Lacs and Rs. 0.40 Lacs respectively. As explained to us the above advance is repayable on demand. Accordingly clauses 4(III) (b) to (d) of the order are not applicable.

(e) According to the information and explanations given to us by the management, the company has not taken any loan secured or unsecured during the year from Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956. Accordingly clause 4(NI)(f) and (g) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, considering the financial position, size and the nature of the business of the company, we observed certain areas which requires improvement in internal control.

5. According to the information and explanations provided by the management, there are no contracts or arrangements the particulars of which need to be entered into the register maintained u/s 301 of the Companies Act 1956. Accordingly, clause 4(v)(b) of the order is not applicable.

6. The Company has not accepted any deposit during the year from the public as per the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules made there under. However the balance of the deposits as on 31st of March, 2014 exceeded the ceiling limit fixed by Reserve Bank of India by Rs. 1510.08 Lacs (refer note no. 2.3.vii) excluding interest payable on that. According to the information and explanations given to us, no order has been passed by National Company Law Tribunal or any court or any other Tribunal on the company except the following orders passed by Reserve Bank of India and Company Law Board :

a) Consequent upon failure of the company to repay its dues to the depositors in terms of CLB orders legal proceedings have been initiated by SFIO against the company for violation of Sec 58(a) of Companies Act, 1956. The total dues including interest as on 31.03.2014 is Rs. 1510.08 lacs.

b) The Company has submitted a scheme for reduction of share capital and issue of shares to the deposit holders in lieu of the principal held by them as on 01.04.2007. The scheme was approved by the deposit holders and shareholders and now pending before Hon''ble High Court at Calcutta for approval. Refer Note No. 2.3.v.

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

8. As per the information and explanations given to us, the Company has given yearly maintenance job of its Wind Mills to outside agencies on contract. As explained to us, there are no other costs for which cost records are to be maintained.

9. (a) According to the records of the company, during the year the company has generally been regular in depositing with the appropriate authorities, undisputed statutory dues including provident fund, investor education and protection fund, employee state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues whichever applicable, except for default in deposit of brought forward balances of Service Tax amounting to Rs. 1,06,306/-, Profession tax amounting to Rs. 8,020/-, Tax Deducted at Source (TDS) amounting to Rs. 24,071/-. Regarding unclaimed Fixed Deposits refer Note No. 2.7 (a) & (b) and Para No. (d) of our main audit report.

(b) According to the records of the company, the dues of sales tax, custom duty, wealth tax, income tax, excise duty, service tax and cess which have not been deposited on account of any dispute and the forum where the disputes are pending are as under :

Name of the Statute Nature of Dues Amount Forum where pending

(Rs. in lacs)*

Central and States Sales Central and 27.50 W.B.Commercial Tax Laws State Sales Tax Taxes Appellate and Revisional Board

Karnataka Sales Tax Act, State Sales Tax 26.53 Karnataka High 1957 Court

Finance Act, 1994 Service Tax 29.33 Supreme Court

Total 83.36

* The above figures are as per the information made available to us.

10. The accumulated losses of the company are more than its net worth. The company has incurred cash losses during the current financial year covered by our audit and also in the immediately preceding financial year.

11. Consequent upon withdrawal of the petition filed u/s 391(1) and 391(6) of the Companies Act, 1956 interest on working capital and term loans aggregating to Rs. 37,608.26 Lacs provided for the period January, 2004 to March, 2014 remain unpaid. Working capital loan, term Loan to the tune of Rs. 12,312.86 Lacs and securitization installment payable to the extent of Rs. 992.95 Lacs also remain unpaid.

12. 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.

13. The Company is not a chit fund or a Nidhi/ Mutual Benefit fund / Society.

14. The company has maintained records of transactions and contracts in respect of shares, securities, debentures and other investments. We also report that the company has held shares, securities, debentures and other investments in its own name.

15. The company has not given any guarantee for loans taken by others from banks or Financial Institutions.

16. Based on the information and explanations given to us by the management, no term loan was obtained by the company during the year.

17. On the basis of our overall examination of the balance Sheet, the company raised no fund on short-term basis during the year. However the loss incurred by the company which is technically long term outflow of fund is observed to have been predominantly financed by erosion of short/long term resources.

18. 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.

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

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

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For G. BASU & CO.

Chartered Accountants Firm Regn. No. 301174E

3, Chowringhee Approach G. Guha Kolkata - 700 072 Partner Dated, The 30th day of May, 2014 Membership No. 054702

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Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Nicco Uco Alliance Credit Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, and the Statement of Profit and Loss and Cash Row Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility tor 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as weH 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 qualified audit opinion.

Basis for QualMlsd Opinion

a) Note No. 2.21 regarding cancellation of certificate of registration of the company to carry out non-banking financial activities by Reserve Bank of India (RBI) vide its order dated 31stMarch 2005, against which the company has preferred an appeal before the Appellate Authority for Non-Banking Finance Company (NBFC), Joint Secretary, Ministry of Finance, Govt, of India, New Delhi, which, as stated, is pending.

As the decision with regard to appeal against cancellation of license is pending for reasons as stated in the note above, the accounts of the company have been prepared on going concern assumption on the basis of legal opinion obtained.

In the event of adverse decision/ development the financial statements may require necessary adjustments in the value of its assets and liabilities.

b) Note No. 2.3.x regarding default made by the Company in repayment ot its Fixed Deposits liability as per order of Company Law Board (CLB).

c) Note No.2.3.ix regarding non-confirmation of balances by Banks and Financial Institutions (Fl''s) in whose Books the account of Company has turned Non Performing Assets (NPAs). Non-confirmation is in respect of loan accounts, interest payable on such loan accounts. Due to such nofHionfirmation we are unable to comment on the amount of loans & interest payable on such loan accounts.

d) Note No. 2.7 (a) & (b) regarding the reasons for Non transferring of amounts in respect of ''Unclaimed Fixed Deposits (including interest accrued thereon till the maturity date)" to "Investors Education and Protection Fund", even after the expiry of more than seven years, as required by Sec 205(c) of the Companies Act 1956.

e) Non ascertainment of impairment of assets as required by Accounting Standard (AS)-28 issued by The Companies (Accounting Standards) Rules, 2006. Refer Note No. 2.24.

The impact of above paragraphs on the toss After Tax" and "Shareholder''s Funds" of the company is unascertainable.

QusHflod Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matters described in the Basis for Qualified Opinion paragraph, 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 March 31, 2013;

(b) in the case of the Statement of Profit and Loss, of the loss 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.

Emphasis of matter

i) Note No. 2.5(1), UCO bank, the leader of the consortium of bankers moved an application in the Debt Recovery Tribunal (DRT) on 29.11.2005 to recover the outstanding dues against the company, which the company has contested. The learned DRT has passed an order on 01.12.2005 appointing two receivers for making an inventory and taking a symbolic possession of secured properties of the company but at the same time directing that till disposal of the prayer for interim relief, the company will not deal with or transfer or dispose of any of fts secured properties. However, the company shall carry on its business as usual.

(if) Note No. 2.3.iv.a to 2.3.iv.d regarding applications filed by various banks and financial institutions to DRT and DRT 1 to recover their dues.

(Hi) Note No. 2.3.iv.e regarding suit initiated by International Finance Corporation, Washington in Hon''ble High Court at Calcutta.

(iv) Note number 2.3.iv.f regarding measures taken by UCO bank u/s 13(4) of theSARFESI act against the company.

(v) Note No. 2.11(d) regarding Serious Fraud Investigation against the company on recommendation of Registrar of Companies (ROC).

(vi) As per the information and explanations given to us, the land and building held by the company in excess of its own use amounting to Rs 292.85 Lacs and investments in unquoted shares of companies (other than subsidiary and company in the same group) amounting to Rs 6.80 Lacs is In violation of Para 19 of Non-Banking Financial (Deposit accepting or holding) Companies, Prudential Norms, (Reserve Bank) directions, 2007 in regards to "Restrictions on investments in land and building and unquoted shares".

Moreover as per requirement such land and buildings or unquoted shares acquired in satisfaction of debts are to be disposed off within a period of 3 years from the date of acquisition. In absence of the information regarding acquisition of such land & building and unquoted shares in satisfaction of debts and the period of holding of such assets, we are unable to comment on the same.

However we have been given to understand that most of such assets are charged with Banks and Financial Institutions and cannot be liquidated to bring the same within limits of prudential norms as mentioned above (Refer note no. 2.35).

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 said Order.

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

a. we have obtained all the information and explanations, subject to our observations made in the above Para which to the best of our knowledge and belief were necessary for the purpose of our audit;

b. in our opinion, subject to our observations made In the above Para, 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. Except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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. In view of default in repayment of fixed deposits and interest thereon, all the directors of the company are disqualified as on 31st March, 2013 from being appointed as directors in other public companies in terms of clause (g) of subsection (1) of section 274 of The Companies Act, 1956.

Annexure to the Auditors''Report

The Annexure referred to in paragraph 1 of Our Report of even date to the members of Nicco Uco Alliance Credit Limited on the financial statements of the company for the year ended 31 st March, 2013.

1. (a) The Companyhas notmaintainedproper records showingfullparticulars.includingquantitative details and situation of ils fixed Assets. Due to fire which took place in Eastern Divisional Office (EDO) in an earlier year, fixed asset register was destroyed; however the same is yet to be prepared. Refer note no. 2.33.

Further, in the absence of Fixed Asset register, the Company is unable to identify the assets lost due to fire in 2009/sold during the year. Accordingly the same has not been accounted for.

(b) According to the information and explanations given to us, physical verification of Fixed Assets has not been carried out during the year; hence shortage, excesses, if any, has not been ascertained. Consequently we are unable to comment on the discrepancies if any.

(c) Substantial part of Fixed Assets has not been disposed off during the year so as to affect the going concern assumption.

2. (a) There is no live agreement for lease and hire purchase stock as on date. All such assets have turned Non-performing and necessary provision has been made for the same. Physical verification for the same has not been done during the year. However as explained to us by the management, there is little scope for doing the same.

(b) Since the company has not conducted the physical verification of its inventories the question of following proper procedure does not arise.

(c) All Assets under Hire Purchase have turned Non Performing Assets in the books of the company and necessary provision has been made for the same. List of such inventories submitted to us was not complete. We are unaware of any record available with the company in this regard in the light of the fire which took place in the office as mentioned in Para 1(a) above.

3. (a) According to the information and explanations given to us by the management, the company has not given any loan secured or unsecured during the year to Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956 except interest free unsecured advances (net) given to its subsidiary company, the maximum amount outstanding at any time during the year and closing balance as on 31.03.2013 were Rs.0.40 Lacs and Rs.0.40 Lacs respectively. As explained to us the above advance is repayable on demand. Accordingly clauses 4(111) (b) to (d) of the order are not applicable.

(e) According to the information and explanations given to us by the management, the company has not taken any loan secured or unsecured during the year from Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956. Accordingly clause 4(lll)(f) and (g) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, considering the financial position, size and the nature of the business of the company, we observed weakness in the system of internal control in respect of non-furnishing of details/non reconciliation of certain accounts, repayment of fixed deposits, etc., which needs improvement. Refer Para 1, 2, 9 and 14 in this regard. Also, refer Note No. 2.5 vi(a), 2.9(a),(c) & (d).

5. According to the information and explanations provided by the management, there are no contracts or arrangements the particulars of which need to be entered into the register maintained u/s 301 of the Companies Act 1956. Accordingly, clause 4(v)(b) of the order is not applicable.

6. The Company has not accepted any deposit during the year from the public as per the directives issued by the Reserve Bank of India and the provisions of Section S8A and S8AA or any other relevant provisions of the Companies Act, 1956 and the rules made there under. However the balance of the deposits as on 31st of March 2013 exceeded the ceiling limit fixed by Reserve Bank of India by Rs.943.38 Lacs (refer note no 2.3.vii) excluding interest payable on that. According to the information and explanations given to us, no order has been passed by National Company Law Tribunal or any court or any other Tribunal on the company except the following orders passed by Reserve Bank of India and Company Law Board :

a) Not to accept fixed deposits w.e.f. 14.06.04 and do renewal of fixed deposits from 01.07.04 which, as stated, the company has duly complied with.

b) Reserve Bank of India (RBI) vide order dated 31.03.05 has cancelled the Certificate of Registration of the company to cany on the business of a Non-banking Finance Company(NBFC) against which the company has preferred an appeal before Appellate Authority for NBFC, Joint Secretary Ministry of Finance, Government of India, New Delhi, which, as stated, is pending. Refer Note No.2.21.

c) Honorable Company Law Board Eastern Region Bench has passed an order vide order dated 22nd March, 2005 against Company''s Petition No. 641 (58AA)/ERB/2004 for rescheduling the repayment of Company''s Fixed Deposit liability including interest accrued thereon u/s 45QA of the RBI Act 1934. As at 31.03.2013 there was default of Rs.943.38 Lacs in repayment of fixed deposit dues vis-a-vis the amount supposed to be paid as per Company Law Board (CLB) schedule. Refer Note No. 2.3.x & xi.

d) The Company has submitted a scheme for reduction of share capital and issue of shares to the deposit holders in lieu of the principal held by them as on 01.04.2007. The scheme was approved by the deposit holders and shareholders and now pending before Hon''ble High Court at Calcutta for approval. Refer Note No. 2.3.V.

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

8. As per the information and explanations given to us, the Company has given yearly maintenance job of its Wind Mills to outside agencies on contract. As explained to us, there are no other costs for which cost records are to be maintained.

9. (a) According to the records of the company, during the year the company has generally been regular in depositing with the appropriate authorities, undisputed statutory dues including provident fund, investor education and protection fund, employee state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues whichever applicable, except for default in deposit of brought forward balances of Service Tax amounting to Rs. 1,06,306/-, Profession tax amounting to Rs.8,020/-, Tax Deducted at Source (TDS) amounting to Rs.24,071/-. Regarding unclaimed Fixed Deposits refer Note No. 2.7 (a) & (b) and Para No. (d) of our main audit report.

(b) According to the records of the company, the dues of sales tax, custom duty, wealth tax, income tax, excise duty, service tax and cess which have not been deposited on account of any dispute and the forum where the disputes are pending are as. under:

* The above figures are as per the information made available to us.

10. The accumulated losses of the company are more than its net worth. The company has incurred cash losses during the current financial year covered by our audit and also in the immediately preceding financial year.

11. Consequent upon Withdrawal of the petition filed u/s 391(1) and 391(6) of the Companies Act, 1956 interest on working capital and term loans aggregating to Rs. 30,969.92 Lacs provided for the period January, 2004 to March, 2013 remain unpaid. Working capital loan, term Loan to the tune of Rs. 12,194.43 Lacs and securitisation installment payable to the extent of Rs.992.95 Lacs also remain unpaid.

12. 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.

13. The Company is not a chit fund or a Nidhi/ Mutual Benefit fund/ Society.

14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, and other investments. The company has maintained records of transactions and contracts in respect of shares, securities, debentures and other investments however the same is not updated. We also report that the company has held shares, securities, debentures and other investments in its own name. During the year there has been increase/change in no. of certain shares, the value of which could not be ascertained and accounted for. Refer Note No. 2.9(a). 2.9(c) & (d).

15. The company has not given any guarantee for loans taken by others from banks or Financial Institutions.

16. Based on the information and explanations given to us by the management, no term loan was obtained by the company during the year.

17. On the basis of our overall examination of the balance Sheet, the company raised no fund on short-term basis during the year. However the loss incurred by the company which is technically long term outflow of fund is observed to have been predominantly financed by erosion of short/long term resources.

18. 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.

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

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

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

FOR SINGHI & CO.

Chartered Accountants

Firm Regn. No. 302049E

1B, Old Post Office Street ML. Shukla

Kolkata - 700 001 Partner

Dated, The 28th day of May, 2013 Membership No. 051505

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Mar 31, 2011

We have audited the attached Balance Sheet of NICCO UCO ALLIANCE CREDIT LIMITED as at 31st March, 2011, the Profit & 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.

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 (Auditor's Report) Order, 2003 as amended by the Companies (Auditor's 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:

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

2. In our opinion, subject to our observations made in para 6 below proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

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

4. In our opinion, the Balance Sheet, the Profit and Loss Account and the 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 except for AS-28 relating to the "Impairment of Assets" prescribed by The Institute of Chartered Accountants of India, refer note no. 9 of schedule 15B and subject to our observation mentioned in para 6 below.

5. In view of default in repayment of fixed deposits and interest thereon, all the directors of the company are disqualified as on 31st March, 2011 from being appointed as directors in other public companies in terms of clause (g) of subsection (1) of section 274 of The Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to,

a) (i) Note No. 10 in Schedule 15B regarding cancellation of certificate of registration of the company to carry out non-banking financial activities by Reserve Bank of India (RBI) vide its order dated 31st March 2005, against which the company has preferred an appeal before the Appellate Authority for Non-Banking Finance Company (NBFC), Joint Secretary, Ministry of Finance, Govt. of India, New Delhi which is pending.

As the decision with regard to appeal against cancellation of license is pending for reasons as stated in the note above, the accounts of the company have been prepared on going concern assumption on the basis of legal opinion obtained.

In the event of adverse decision/ development the financial statements may require necessary adjustments in the value of its assets and liabilities.

(ii) Note No. 11 (a) in schedule 15B, UCO bank, the leader of the consortium of bankers moved an application in the Debt Recovery Tribunal (DRT) on 29.11.2005 to recover the outstanding dues against the company, which the company has contested. The learned DRT has passed an order on 01.12.2005 appointing two receivers for making an inventory and taking a symbolic possession of secured properties of the company but at the same time directing that till disposal of the prayer for interim relief, the company will not deal with or transfer or dispose of any of its secured properties. However, the company shall carry on its business as usual.

(iii) Note No. 11(b) to 11 (e) regarding applications filed by various banks and financial institutions to DRT and DRT 1 to recover their dues.

(iv) Note No. 11(f) regarding suit initiated by International Finance Corporation in High Court at Calcutta.

(v) Note number 11(g) in Schedule 15 B regarding measures taken by UCO bank u/s 13(4) of the SARFESI act against the company.

b) Note No. 14 of schedule 15B regarding default made by the Company In repayment of Its Fixed Deposits liability as per order of Company Law Board (CLB).

c) Note No. 12(a) of schedule 15B regarding non-confirmation of balances by Banks and Financial Institutions (Fl's) in whose Books the account of Company has turned Non Performing Assets. (NPA) Non-confirmation is in respect of loan accounts,

Interest payable on such loan accounts.

Current account balances with consortium and other banks include an amount of Rs. 209.25 Lacs, realisability of which appears to be negligible. No provision for the same has been made In the accounts. We are therefore unable to ascertain the actual position of these accounts with such Banks. Refer Note No. 12(b) & (c) of Schedule 1SB.

d) Note No. 21 regarding Serious Fraud Investigation against the company on recommendation of Registrar of Companies (ROC).

e) Non transferring of Rs. 16.48 Lacs regarding unclaimed Fixed Deposits (including interest accrued thereon till the maturity date) to "Investors Education and Protection Fund", even after the expiry of more than seven years, as required by Sec 205(c) of the Companies Act 1956. Refer Note No. 15 (b) of Schedule 15B.

f) Non ascertainment of impairment of assets as required by AS-28.

and read with other notes and in particular note no 3(b) and 11(h) in Schedule 15(b) give the information required under 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, 2011;

(b) In the case of the Profit and Loss Account, of the Loss 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.

Annexure to the Auditors' Report (Referred to In Paragraph 3 of our report of even date)

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets in respect of its Southern Divisional Office (SDO). Due to fire taken place in Eastern Divisional Office (EDO), fixed asset register was damaged; however the same is yet to be prepared.

Further, in the absence of Fixed Asset register, the Company is unable to identify the assets lost due to fire in 2009/sold during the year. Accordingly the same has not been accounted for.

(b) According to the information and explanations given to us, physical verification of Fixed Assets has not been carried out during the year; hence shortage, excesses if any has not been ascertained. Consequently we are unable to comment on the discrepancies if any.

(c) Substantial part of Fixed Assets has not been disposed off during the year so as to affect the going concern.

2. (a) There is no live agreement for lease and hire purchase stock as on date. All such assets have turned Non-performing and necessary provision has been made for the same. Physical verification for the same has not been done during the year. However as explained to us, there is little scope for doing the same.

(b) Since the company has not conducted the physical verification of its inventories the question of following proper procedure does not arise.

(c) All Assets under Hire Purchase have turned Non Performing Assets in the books of the company and necessary provision has been made for the same. List of such inventories submitted to us was not complete. We are unaware of any record available with the company in this regard in the light of the fire which took place in the office as mentioned in Para 1(a) above.

3. (a) According to the information and explanations given to us by the management, the company has not given any loan secured or unsecured during the year to Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956 except unsecured advances given to its subsidiary company, the maximum amount of which outstanding at any time during the year and closing balance as on 31.03.2011 was Rs. 5.12 Lacs and Rs. 0.35 Lacs respectively. As explained to us the above advance is repayable on demand. Accordingly clause 4(lll) (b) to (d) of the order are not applicable.

(b) According to the information and explanations given to us by the management, the company has not taken any loan secured or unsecured during the year from Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956. Accordingly clause 4(lll)(f) and (g) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, considering the financial position, size and the nature of the business of the company, we observed weakness in the system of internal control in respect of non-reconciliation of certain accounts, repayment of Fixed deposits, etc, which needs improvement. Refer para 1, 2, 9 and 14 in this regard.

5. According to the information and explanations provided by the management, there are no contracts or arrangements the particulars of which need to be entered into the register maintained u/s 301 of the Companies Act 1956. Accordingly, clause 4(vXb) of the order is not applicable.

6. The Company has not accepted any deposit during the year from the public as per the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules made thereunder. However the balance of the deposits as on 31st of March 2011 exceeded the ceiling limit fixed by Reserve Bank of India by Rs. 1982.04 Lacs (refer note no 15(a) of Schedule 15B) excluding interest payable on that. According to the information and explanations given to us, no order has been passed by National Company Law tribunal or any court or any other Tribunal on the company except the following orders passed by Reserve Bank of India and Company Law Board:

a) Not to accept fixed deposits w.e.f. 14.06.04 and do renewal of fixed deposits from 01.07.04 which, as stated, the company has duly complied with.

b) Reserve Bank of India (RBI) vide order dated 31.03.05 has cancelled the Certificate of Registration of the company to carry on the business of a Non-banking Finance Company (NBFC) against which the company has preferred an appeal before Appellate Authority for NBFC, Joint Secretary Ministry of Finance, Government of India, New Delhi, which is pending. Refer Note No. 10 of Schedule 15B.

c) Honourable Company Law Board Eastern Region Bench has passed an order vide order dated 22nd March, 2005 against Company's Petition No. 641(58AA)/ERB/2004 for rescheduling the repayment of Company's Fixed Deposit liability including interest accrued thereon u/s 45QA of the RBI Act 1934. As at 31.03.2011 there was default of Rs. 1982.04 Lacs in repayment of fixed deposit dues vis-a-vis the amount supposed to be paid as per Company Law Board (CLB) schedule. Refer Note No. 14 (a) & (d) of Schedule 15B.

d) The Company has submitted a scheme for reduction of share capital and issue of shares to the deposit holders in lieu of the principal held by them as on 01.04.2007. The scheme was approved by the deposit holders and shareholders and now pending before Hon'ble High Court at Calcutta for approval. Refer Note No. 14(b) of Schedule 15B.

e) The Company has not complied with prescribed liquidity requirement of Reserve Bank of India.

8. The Company has given yearly maintenance job of its Wind Mills to outside agencies on contract. As explained to us, there are no other costs for which cost records are to be maintained.

9. (a) According to the records of the (company, during the year the company has generally been regular in depositing with the appropriate authorities, undisputed statutory dues including provident fund, investor education and protection fund, employee state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues whichever applicable, except for default in deposit of Service Tax amounting to Rs. 1,06,306/-, Profession tax amounting to Rs. 8,020/-, Tax Deducted at Source (TDS) amounting to Rs. 26,311/- and unclaimed Fixed Deposits OS referred to in Para no. 6 (e) of our audit report in this regard.

(b) According to the records of the company, the dues of sales tax, custom duty, wealth tax, income tax, excise duty, service tax, and cess which have not been deposited on account of any dispute and the forum where the disputes are pending are as under:

Name of the Statute Nature of Dues Amount Forum where pending (Rs. in lacs)*

Central and States Sales Central and State Sales Tax 27.50 W.B. Commercial Taxes Tax Laws Appellate and Revisional Board.

Karnataka Sales Tax Act, State Sales Tax 26.53 Karnataka High Court. 1957

Total 54.03

* The above figures are as per the information made available to us.

10. The accumulated losses of the company are more than its net worth. The company has incurred cash losses during the current financial year covered by our audit and also in the immediately preceding financial year.

11. Consequent upon withdrawal of the petition filed u/s 391(1) and 391(6) of the Companies Act, 1956 interest on working capital and term loans aggregating to Rs. 20518.53 Lacs provided for the period February, 2004 to March, 2011 remain unpaid. Working capital, term Loan to the tune of Rs. 12013.68 Lacs and securitisation installment payable to the extent of Rs. 992.95 Lacs also remain unpaid.

12. 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.

13. The Company is not a chit fund or a Nidhi/ Mutual Benefit fund/ Society.

14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities, and other investments. The company has maintained records of transactions and contracts in respect of shares, securities, debentures and other investments however the same is not updated. We also report that the company has held shares, securities, debentures and other investments in its own name except in a few cases where transfer is pending in the name of the company.

15. The company has not given any guarantee for loans taken by others from banks or Financial Institutions.

16. Based on the information and explanations given to us by the management, no term loan was obtained by the company during the year.

17. On the basis of our overall examination of the balance Sheet, the company raised no fund on short-term basis during the year. However the loss incurred by the company which is technically long term outflow of fund is observed to have been predominantly financed by erosion of short/long term resources.

18. 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.

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

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

21. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

FOR SINGHI & CO. Chartered Accountants Firm Regn. No. 302049E

L. N. Dey Partner M.No.- 3569

1B, Old Post Office Street Kolkata - 700 001

The 27th day of May, 2011

---

Mar 31, 2010

We have audited the attached Balance Sheet of NICCO UCO ALLIANCE CREDIT LIMITED as at 31st March, 2010, and also the Profit & 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.

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:

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

2. In our opinion, subject to our observations made in para 6 below proper books of account as required by law have been kept by the company so far as appears from our examination of those books;

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

4. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 except for AS-28 relating to the "Impairment of Assets" prescribed by The Institute of Chartered Accountants of India, refer note no. 9 of schedule 15B and subject to our observation mentioned in para 6 below.

5. In view of default in repayment of fixed deposits and interest thereon, all the directors of the company are disqualified as on 31st March, 2010 from being appointed as directors in other public companies in terms of clause (g) subsection (1) of section 274 of The Companies Act, 1956.

6. In our opinion and to the best of our information and according to the explanations given to us, the said accounts subject to,

a) (i) Note No. 10 in Schedule 15B regarding cancellation of certificate of registration of the company to carry out non-banking financial activities by Reserve Bank of India (RBI) vide its order dated 31st March 2005, against which the company has preferred an appeal before the Appellate Authority for Non-Banking Finance Company (NBFC), Joint Secretary, Ministry of Finance, Govt, of India, New Delhi which is pending.

(ii) Note No. 11 (a) in schedule 15B, UCO bank, the leader of the consortium of bankers moved an application in the Debt Recovery Tribunal (DRT) on 29.11.2005 to recover the outstanding dues against the company, which the company has contested. The learned DRT has passed an order on 01.12.2005 appointing two receivers for making an inventory and taking a symbolic possession of secured properties of the company but at the same time directing that till disposal of the prayer for interim relief, the company will not deal with or transfer or dispose of any of its secured properties. However, the company shall carry on its business as usual.

(iii) Note number 11(g) in Schedule 15 B regarding measures taken by UCO bank u/s 13(4) of the SARFESI act against the company.

As the decision with regard to appeal against cancellation of license is pending for reasons as stated in the note above, the accounts of the company have been prepared on going concern assumption on the basis of legal opinion obtained.

In the event of adverse decision/ development,the financial statements may require necessary adjustments in the value of its assets and liabilities.

b) Note No. 14 of schedule 15B regarding default made by the Company in repayment of its Fixed Deposits liability as per order of Company Law Board (CLB).

c) Note No. 3 (b) of schedule 1.5B regarding managing directors excess remuneration awaiting approval from Central Government for the financial year 2007-08. Further, for FY 2008-09 & 2009-10 company has received approval from Central Government tor paying Rs. 8.26 lakhs per annum; however, actual payment crossed the above limit in the above mentioned years by Rs.0.47 Lacs and Rs. 0.29 Lacs respectively.

d) Note No. 12 of schedule 15B regarding non-confirmation of balances by Banks and Financial Institutions (Fls) in whose Books the account of Company has turned Non Performing Assets (NPA). Non-confirmation is in respect of loan accounts, interest payable on such loan accounts; fixed deposit accounts & Current accounts held by the company with them. Fixed deposits and current account balances with lender Banks include an amount of Rs. 192.78 lacs, realisability of which appears to be negligible. No provision for the same has been made in the accounts. We are therefore unable to ascertain the actual position of these accounts with such Banks and Fls.

e) Note No. 19 of Schedule 15B regarding non ascertainment and accounting of losses arising out of fire on fixed assets etc. at the registered office of the company.

f) Note No. 21 regarding Serious Fraud Investigation against the company on recommendation of Registrar of Companies (ROC).

g) Non transferring of Rs. 10.57 lacs regarding unclaimed Bonds (including interest accrued thereon till the maturity date) and Rs. 3.13 lacs regarding unclaimed Fixed Deposits (including interest accrued thereon till the maturity date) to "Investors Education and Protection Fund", even after the expiry of more than seven years, as required by Sec 205(c) of the Companies Act 1956.

and read with other notes in Schedule 15 give the information required under the Companies Act, 1956 in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

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

(b) In the case of the Profit and Loss Account, of the Loss 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.

Annexure to the Auditors Report (Referred to in Paragraph 3 of our report of even date)

1. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets in respect of its Southern Divisional Office (SDO). Due to fire taken place in Eastern Divisional Office (EDO), substantial part of fixed asset register was damaged; however the same is being recreated now.

(b) According to the information and explanations given to us, physical verification of Fixed Assets has not been carried out by the management/ other agencies during the year; hence we are unable to comment on the discrepancies if any.

(c) Substantial part of Fixed Assets has not been disposed off during the year so as to affect the going concern.

2. (a) There is no live agreement for lease and hire purchase stock as on date. All such assets have turned Non-performing and necessary provision has been made for the same. As such there is little scope for physical verification and accordingly the same has not been done during the year.

(b) Since the company has not conducted the physical verification of its inventories the question of following proper procedure does not arise.

(c) The company is maintaining proper records of the stocks on hire under Hire Purchase Contracts.

3. (a) According to the information and explanation given to us by the management, the company has not given any loan secured or unsecured during the year to Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956 except expenditure incurred on behalf of its subsidiary company, the maximum amount of which outstanding at any time during the year and closing balance as on 31.03.2010 was Rs. 0.06 lacs. As explained to us the above advance is repayable on demand. Accordingly clauses 4(lll)(b) to (d) of the order are not applicable.

(b) According to the information and explanation given to us by the management, the company has not taken any loan secured or unsecured during the year from Companies, firms or other parties covered in the Register maintained u/s 301 of the Companies Act, 1956. Accordingly clauses 4(lll)(f) and (g) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us, there is an internal control system which is commensurate with the size of the Company and nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services. During the year some weaknesses were noticed in the system as mentioned below:

(i) in respect of reconciliation of subsidiary ledger of interest payable on fixed deposits with such figure as appearing in the control ledger.

(ii) regarding repayment of fixed deposits.

However, the company is taking necessary steps to remove the weaknesses noticed in the system for repayment of fixed deposits.

5. As per the information and explanations given to us, the particulars of contracts and arrangements, which need to be entered into the register of contracts, maintained u/s 301 of the Companies Act.1956 have been so entered. As the amount of such transactions is not more than Rs. 5 lacs, Para 5(b) of the order is not applicable.

6. The Company has not accepted any deposit during the year from the public as per the directives issued by the Reserve Bank of India and the provisions of Section 58A and 58AA or any other relevant provisions of the Companies Act, 1956 and the rules made thereunder. However the balance of the deposits as on 31st of March 2010 exceeded the ceiling limit fixed by Reserve Bank of India by Rs. 2363.60 lakhs excluding interest payable on that. According to the information and explanations given to us, no order has been passed by National Company Law Tribunal or any court or any other Tribunal on the company except the following orders passed by RBI and Company Law Board:

a) Not to accept fixed deposits w.e.f. 14.06.04 and do renewal of fixed deposits from 01.07.04 which the company has duly complied with.

b) Reserve Bank of India (RBI) vide order dated 31.03.05 has cancelled the Certificate of Registration of the company to carry on the business of a Non-banking Finance Company(NBFC) against which the company has preferred an appeal before Appellate Authority for NBFC, Joint Secretary Ministry of Finance, Government of India, New Delhi, which is pending.

c) Honorable Company Law Board Eastern Region Bench has passed an order vide order dated 22nd March, 2005 against Companys Petition No. 641 (58AA)/ERB/2004 for rescheduling the repayment of Companys Fixed Deposit liability including interest accrued thereon u/s 45QA of the RBI Act 1934. As at 31.03.2010 there was default of Rs, 2015.85 lacs in repayment of fixed deposit dues vis-a-vis the amount supposed to be paid as per Company Law Board (CLB) schedule.

The Company has submitted a scheme for reduction of share capital and issue of shares to the deposit holders in lieu of the principal held by them as on 01.04.2007. The scheme was approved by the deposit holders and shareholders and now pending before Honble High Court at Calcutta for approval.

d) The Company has not complied with prescribed liquidity requirement of Reserve Bank of India.

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

8. The Company has given yearly maintenance job of its Wind Mills to outside agencies on contract. There are no other costs for which cost records are to be maintained.

9. (a) According to the records, of the company, the company has generally been regular in depositing with the appropriate authorities, undisputed statutory dues including provident fund, investor education and protection fund, employee state insurance, income tax, sales tax, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues whichever applicable, during the year except for default in deposit of Service Tax (of SDO) amounting to Rs. 1,06,306/- , Profession tax (of SDO) amounting to Rs. 5,077/- and regarding deposit of unclaimed Bonds amounting to Rs. 10,57,756/- and regarding unclaimed Fixed Deposits amounting to Rs. 3,12,628/- which were due for more than six months as on 31st March 2010. Also refer para no 6 (g) of audit report in this regard.

(b) According to the records of the company, the dues of sales tax, custom duty, wealth tax, income tax, excise duty, service tax and cess which have not been deposited on account of dispute and the forum where the disputes are pending are as under;

Nature of Contingent liability Status of case As at 31.03.2010 As at 31.03.2009 (Rs. in lacs) (Rs. in lacs)

Contingent liability w.r.t Central The disputed demand is pending 27.50 27.50 and States Sales Tax before W.B. Commercial Taxes

(A.Y. 1995-1996 to 2002-2003) Appellate and Revisional Board

Karnataka Sales Tax Act, 1957, Matter is pending with 26.53 26.53 Karnataka High Court karnataka High Court.

Contingent Liability w.r.t. Income Disputed demand is pending - 114.01 Tax Act, 1961 (A.Y. 2000-01, before C.I.T. (Appeals) - VI 2001-02 & 2003-04)

Service Tax applic- able on Lease & Disputed demand is pending 29.33 - Hire Purchase Transactions at SDO before Supreme Court

Total 83.36 168.04

10. The accumulated losses of the company are more than its net worth. The company has incurred cash losses during the current financial year covered by our audit and also in the immediately preceding financial year.

11. Consequent upon withdrawal of the petition filed u/s 391(1) and 391(6) of the Companies Act, 1956 interest on working capital and term loans aggregating to Rs. 16,289.22 lakhs provided for the period February, 2004 to March, 2010 remain unpaid. Term Loan to the tune of Rs. 1,348.97 lakhs and securitisation instalment payable to the extent of Rs. 992.95 lakhs also remain unpaid.

12. 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.

13. The Company is not a chit fund or a Nidhi/Mutual Benefit fund/ Society.

14. According to the information and explanations given to us, the company is not dealing or trading in shares, securities and other investments. The company has maintained proper records of transactions and contracts in respect of shares, securities, debentures and other investments and timely entries have been made therein. We also report that the company has held shares, securities, debentures and other investments in its own name except in a few cases where transfer is pending in the name of the company.

15. The company has not given any guarantee for loans taken by other companies from banks or Financial Institutions.

16. Based on the information and explanations given to us by the management, no term loan was obtained by the company during the year.

17. On the basis of our overall examination of the balance Sheet, the company raised no fund on short-term basis during the year. However the loss incurred by the company which is technically long term outflow of fund is observed to have been predominantly financed by erosion of short/long term resources.

18. 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.

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

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

21. We have been informed by the management regarding the fraud perpetrated on the company by a few employees of the company in the F.Y 2008-09 and there after which has been stated in Note No. 20 in Schedule 15B. As investigation is in progress so exact amount can be quantified only on completion of investigation.



FOR SINGHI & CO.

Chartered Accountants

Firm Regn. No. 302049E

L. N. Dey

M.No.- 3569

Partner

1B, Old Post Office Street

Kolkata - 700 001

The 31st day of May, 2010