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Auditor Report of Premier Energy and Infrastructure Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of M/s. PREMIER ENERGY AND INFRASTRUCTURE LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and the Cash Flow Statement for the period then ended and a summary of significant accounting policies and other explanatory information for the year then ended.

2. Management's Responsibility for the Standalone Financial Statements

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

3. Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

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

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

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

4. Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give 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 31st March, 2015 and its profit and its cash flows for the period ended on that date.

5. Emphasis of Matter

We draw attention to the following matters in the Notes to the Standalone financial statements:

1. Note 9(i) and 24 (a) relating to the land at Door No.62 & 63, Luz Church Road, comprised in survey numbers 1652/14, 1652/16 part, Mylapore Village and Triplicane - Mylapore tauk, Chennai district, Chennai - 600 004, purchased during the year 2007-08 (in joint name with another company) has not been registered. The land is shown as a fixed asset and also the liability towards registration charges is not ascertained and provided for.

2. Note 22 regarding non availability of confirmation of balances in respect of certain parties.

3. Note 1(j)(4) and 28 (b) with respect to provision of leave salary based on company's own estimates.

Our opinion is not qualified in respect of the matter mentioned above.

6. Report on Other Legal and Regulatory Requirements

a) As required by the Companies (Auditors' Report) Order, 2015 ('the order') issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we enclose in the Annexure, a statement on the matters specified in paragraphs 3 and 4 of the said Order, to the extent applicable.

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

I. 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;

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

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

IV. In our opinion, aforesaid standalone financial statements comply with the Accounting Standards specified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014, except for AS 15 on Employee Benefits to the extent that the provision for leave salary is based on company's estimates and not in line with the Accounting Standard;

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

VI. With respect to 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:

a. The company has no pending litigations impacting is financial position in its financial statements;

b. The company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the company.

ANNEXURE TO THE REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

(Referred to in Paragraph 1 under 'Report on Other Legal and Regulatory requirements' section of our Report of even date)

The Annexure referred to in our Auditors' Report to the members of the Company on the financial statements for the period ended 31st March, 2015, we report that:

(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 program of physical verification of its fixed assets by which fixed assets are verified in a phased manner at regular intervals. In accordance with this program, certain fixed assets were verified during the period and no material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets.

(ii) The company does not hold any physical inventories. Thus paragraph 3 (ii) of the Order is not applicable.

(iii) According to the information and explanations given to us, the Company has granted unsecured loans to its subsidiaries covered in the register maintained under section 189 of the Companies Act, 2013.

According to the information and explanations given to us, the loans advanced are interest free and are repayable on demand. Thus, we are unable to comment on sub-clause (a) and (b) of clause (iii) to paragraph 3 of the Order.

(iv) According to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, we have not observed any major weakness in the internal control system.

(v) According to the information and explanations given to us, the Company has not accepted any deposits from public.

(vi) In our opinion and according to the information and explanations given to us, the requirements for maintenance of Cost Records pursuant to Companies (Cost Records and Audit) Rules, 2014 specified by the Central Government of India under section 148 of the Companies Act, 2013 are not applicable to the company for the period under audit.

(vii) (a) According to the records of the company and based on the information and explanations given to us, the company is not regular in depositing undisputed statutory dues of service tax, income tax and VAT with the appropriate authorities. Further, as explained to us, undisputed statutory dues of Service Tax of Rs.1,96,29,012,Professional Tax of Rs.23,901, Income tax of Rs. 3,14,58,271 and TDS of Rs.30,68,301 were in arrears as at 31st March, 2015 for a period of more than 6 months from the date they become payable.

(b) According to the information and explanations given to us, there were no amounts that have not been deposited on account of dispute with any statutory authorities.

(c) According to the information and explanations given to us, there were no amounts required to be transferred to investor education and protection fund in accordance with the relevant provisions of the Act, 1956 (1 of 1956) and rules made there under.

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

(ix) According to the information and explanations given to us and based on the audit procedures, there were instances of default in repayment of dues to bank as follows:

Name of the Financial Institution/Bank Amount in Due Date Rs.

Small Industries Development Bank of India 8,33,000 10-11-2014

Small Industries Development Bank of India 8,33,000 10-12-2014

Small Industries Development Bank of India 8,33,000 10-01-2015

Small Industries Development Bank of India 8,33,000 10-02-2015

Small Industries Development Bank of India 8,33,000 10-03-2015

Name of the Financial Institution/Bank Date of Payment

Small Industries Development Bank of India 24-01-2015

Small Industries Development Bank of India 02-03-2015

Small Industries Development Bank of India 31-03-2015

Small Industries Development Bank of India 31-03-2015

Small Industries Development Bank of India 31-03-2015

(x) In our Opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institution.

(xi) In our Opinion and according to the information and the explanations given to us, the term loans have been applied by the company during the period for the purposes for which they were obtained.

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

For S.H. Bhandari & Co., Chartered Accountants FRN : 000438S

SREEDHAR SREEKAKULAM Place: Chennai Partner Date : 30.05.2015 M. No. 026474


Jun 30, 2014

We have audited the accompanying financial statements of PREMIER ENERGY AND INFRASTRUCTURE LIMITED ("the Company"), which comprise the Balance Sheet as at June 30, 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")- This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s Judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing opinion on the effectiveness of the company''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

a) in the case of the Balance Sheet, of the state of affairs of the Company as at June 30, 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 flows for the year ended on that date Emphasis of Matter

We draw attention of the shareholders to:

1. Note 4A of Notes to Financial Statements relating to the land at Luz Church Road purchased during the year 2007-08 (in joint name with another company) which has not been registered and given as a primary security for loan taken from SIDBI amounting to Rs. 10 Crores.

2. Note 26 of Notes to Financial Statements regarding non availability of confirmation of balances in respect of certain trade receivables and trade payables.

3. Note 27 of Notes to Financial Statements regarding cost provision made for a sum of Rs.12.16 Crores.

Our opinion is not qualified in respect of the matter mentioned above.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") issued by the Centra! 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 June 30,2014, and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

f. Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

g. The company has applied for and awaits the approval of the central government as required under section 295 of companies act 1956, for the loan amounting to Rs. 18.92 Crores given in the Financial year2012-2013 to a partnership firm in which a director of the company is a partner (outstanding as on 30.6.2013 is NIL) and the approval from central government has not yet been received.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT OF EVEN DATE TO THE MEMBERS OF PREMIER ENERGY AND INFRASTRUCTURE LIMITED, ON THE FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30f 2014

Based on the audit procedures performed for the purpose of reporting a true and fair view on the financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, we report that:

(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 fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No materia! discrepancies were noticed on such verification.

(c) In our opinion, a substantial part of fixed assets has not been disposed-off during the year.

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

(b) The procedures of 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 is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

(iii) In respect of Loan given:

(a) The company has not granted loans to parties covered in the register maintained under section 301 of the Act and hence clause (iii)(b),(c) and (d) are not applicable .

In respect of Loan taken:-

(e) The Company has taken unsecured loan from one Company, which is covered in the register maintained under Section 301 of the Act. The maximum amount outstanding during the year was Rs.1,30,345/- and year- end balance is Rs. Nil.

(f) In respect of the above loan taken, since such loan was taken without any stipulation as regards repayment of interest, we are unable to comment on whether the rate of interest is prima facie prejudicial to the interests of the company.

(g) In respect of the above loan taken, the terms of repayment have not been stipulated and hence we are unable to comment as to whether repayment of principal amount is as stipulated.

(iv) In our opinion, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of services. On the basis of our examination and according to the information and explanation given to us, there is no continuing failure to correct major weakness in respect of purchase of inventory and fixed assets.

(v) (a) In our opinion, the particulars of ail.contracts or arrangements that need to be entered Into the register maintained under Section 301 of the Act have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements and exceeding the value of rupees five lakhs entered into during the financial year, because of the unique and specialized nature of transaction involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposit from the public within the meaning of sections 58A of the Act and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) The Company did not carry out any internal audit during the year. (viii) In The Central Government has prescribed maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Act, in respect of Company''s activities. We are of the opinion that the Company has maintained such books of accounts and records as prescribed above.

(ix) (a) Undisputed statutory dues towards income-tax, sales-tax, service-tax, custom duty, excise duty, cess and other material statutory dues have not been regularly deposited with the appropriate authorities and there have been delays in large number of cases.

(b) Undisputed amounts payable in respect thereof, which were outstanding, at the year- end for a period of more than six months from the date thev became payable are as follows:

Name of the Nature of dues Amount in Statute Rs

Income Tax TDS 5,90,895 Act

Name of the Statute Period to which Due date it relates

Income Tax Act Up to December Various 2013

(c) There are no dues in respect of, sales tax, wealth tax, service tax, customs duty, excise duty and cess that have not been deposited with the appropriate authorities except income tax.

Name of the Nature of dues Amount in Statute Rs

Income Tax Income tax 47,59,439 Act

Income Tax Income Tax 1,61,07,098 Act

Name of the Statute Period to which IT Order it relates

Income Tax Act Assessment IT Order Dated on Year 2008-09 29-September- 2010

Income Tax Act Assessment Order not yet Year 2013-14 received

(x) In our opinion, the Company does not have any accumulated losses at the end of the year and has not incurred any cash losses in the current year and the immediately preceding financial year.

(xi) Based on our audit procedure and as per the information and explanation given by the management, the company has not defaulted in repayment of dues to financial institutions or bank or debenture holders during the year except that the company has an earlier year''s liability to pay to HUDCO Rs.56, 00,000/- pursuant to a scheme of arrangement approved by the court in February 2007, which is being contested by HUDCO and hence the payment for the same is being rejected by the party.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. Accordingly, the provisions of clause 4(xii) of the Order are not applicable.

(xiii) In our opinion, the Company is not a chit fund or a nidhi /mutual benefit fund / society. Accordingly, the provisions of clause 4(xiii) of the Order are not applicable.

(xiv) In our opinion, the Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Order are not applicable. (xv) In our opinion and according to the information given to us , the terms and conditions on which the Company has given a guarantee for a loan taken by its subsidiary company for a sum of Rs.17,00,00,000/- from a bank is not prima facie prejudicial to the interest of the Company.

(xvi) In our opinion and according to the information and explanation given to us, the Company has availed new term loan during the year. The. loan amount was utilised towards reimbursement against self-financed assets acquired in last one year and inorganic business growth.

{xvii) In our opinion, no funds raised on short-term basis have been used for long-term investment.

(xviii) in our opinion, the company has not made any preferential allotment of shares to parties covered under section 301 registered during the year.

(xix) The Company has neither issued nor had any outstanding debentures during the year. Accordingly, the provisions of clause 4{xix) of the Order are not applicable.

(xx) The Company has not raised any money by public issues during the year. Accordingly, the provisions of clause 4(xx) of the Order are not applicable.

(xxi) No fraud on or by the Company has been noticed or reported during the year covered by our audit.

For Sreedhar, Suresh & Rajagopalan Chartered Accountants Firm Regn No: 003957S

S. SUBRAMANIAM Place: Chennai Partner Date : 06.09.2014 Membership No. 025433


Jun 30, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Premier Energy and Infrastructure Limited ("the Company"), which comprise the Balance Sheet as at June 30, 2013, 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"). 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 modified audit opinion.

Basis for Qualified Opinion

Reference is invited to Note 28 detailing the receipt and payments of approximately Rs 28 crores. In the absence of documentation/agreements we are unableto verify the nature of these transactions. Further, the company has not accrued fee income of Rs 14 lacs onthese transactions.

In the absence of confirmation of closing balances aggregating to Rs.16 crores of receivable we are unable to confirm the recoverability and the consequent impact, which this may have, on the profit for the year and reserves, the effect of which is indeterminable.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to the matter discussed in the Paragraph on "Basis for qualified Opinion" the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(b) in the case of the Statement of Profit and Loss, of the 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 June 30, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on June 30, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

(f) The Company has applied for and awaits the approval of the Central Government as

required under Section 295 of the Companies Act, for the loan amounting to Rs.18.92 crores given in the previous year to a partnership firm in which a Director of the Company is a partner. (Outstanding as of 30th June 2013 Nil. (Previous year-Nil).

(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 program of verifying fixed assets every year which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. All Fixed assets have been physically verified by the management during the year and no material discrepancies were identified on such verification.

(c) The fixed assets disposed / exchanged during the year, in our opinion do not constitute substantial part of the company and such disposal in our opinion, has not affected the going concern status of the company.

(ii) Inventories

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

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the company & the nature of its business.

(c) The Company has maintained proper quantitative records on inventory. Based on the information and explanations given to us, discrepancies noticed on verification between the physical stocks and book records were not material, and have been properly dealt with in the books of account.

(iii) (a) The company has granted interest free

unsecured loans amounting to Rs. 13 lakhs to Ennore Coke Limited a party covered in the register maintained under section 301 of the Companies Act 1956. The amount outstanding from Ennore Coke Limited as on 30th June, 2013 is NIL. In our opinion since such loans were granted without any stipulations as regards repayment of principal or interest, we are unable to comment on whether the rate of interest, repayment terms are prima facie prejudicial to the interest of the company and report on whether they are overdue does not arise.

(b) The company has taken interest free unsecured loans of Rs.39 lacs from Shriram

Auto Finance a party covered in the register maintained under section 301 of the Companies Act 1956. The amount outstanding to Shriram Auto Finance as on 30th June 2013 is NIL. In our opinion since such loans were taken without any stipulations as regards repayment of principal or interest, we are unable to comment on whether the rate of interest repayment terms are prima facie prejudicial to the interest of the company and reporting on whether they are overdue does not arise.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchase of inventory and fixed assets and sale of services.On the basis of our examination and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in respect of purchase of inventory and fixed assets.

(v) (a) According to the information and explanations

provided by the management, we are of the opinion that the particulars of 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 have been so entered.

(b) In respect of transactions made in pursuance of such contracts or arrangements exceeding value of Rupees five lakhs entered into during the financial year, because of the unique and specialized nature of the transaction involved and absence of any comparable prices, we are unable to comment whether the transactions were made at prevailing market prices at the relevant time.

(vi) The Company has not accepted any deposits from the public within the meaning of section 58A and 58AA of the Act and the rules made there under.

(vii) The company does not have an internal audit system.

(viii) The Company has maintained cost records prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Act.

(ix) (a) According to the information and explanations

given to us and the records of the Company examined by us, the Company has generally been regular in depositing undisputed statutory dues including, Value added tax, Service tax and Cess, except for delays in Tax Deducted at source during the year and Income Tax for the Tax year ended 31st March, 2013. Other Statutory dues such as investor education and protection fund, wealth tax, customs duty and excise duty, Provident Fund and ESI are not applicable to the company.

(b) According to the information and explanation given to us and the records of the Company examined by us, no undisputed amounts payable in respect Value added tax,Service Tax and Cess, were in arrears, as at 30thJune 2013 for a period of more than six months from the date they became payable. With respect to TDS, a sum of Rs. 44.95 lakhs was in arrears as at 30th June 2013 for a period of more than 6 months from the date it became payable and income tax of Rs. 337 lakhs was outstanding as of 30th June 2013.

(c) According to the information and explanations given to us, there are no dues of Income-tax, Service tax, Value added tax, and Cess that have not been deposited with the appropriate authorities on account of any dispute.

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, the company has not defaulted in repayment of dues to financial institution or bank or debenture holders except that the company has a liability to pay to HUDCO Rs. 56 lacs pursuant to a scheme of arrangement approved by the Court in February 2007, which is being contested by HUDCO and hence the payment for the same is being rejected by the party.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, accordingly paragraph 4 (xii) of the Order is not applicable.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society to which the provisions of special statute relating to chit fund etc., are applicable, accordingly paragraph 4 (xiii) of the Order is not applicable.

(xiv) The company has invested only its surplus funds in investments other than its subsidiaries and associates and hence clause 4(xiv) of the order is not applicable

(xv) According to the information and explanations given to us, the company has given guarantee / security during the year for loans taken by EMAS Engineers and Contractors Private Limited, a subsidiary of the Company, from banks or financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the Company has not taken term loans from financial institutions or Banks and there are no term loans taken from financial institutions or Banks are outstanding as on balance sheet date and hence paragraph 4 (xvi) of the order is not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that, during the year, short-term funds have not been used to finance long-term investments.

(xviii) The Company has not made any preferential allotment of shares to parties covered under Sec 301 register during the year.

(xix) The Company has not issued any debentures during the year.

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

(xxi) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year ended 30thJune 2013.

For PKF Sridhar & Santhanam

Chartered Accountants

Firm Registration No : 003990S



S. PRASANA KUMAR

Place: Chennai Partner

Date : 06.09.2013 M.No : 212354


Jun 30, 2012

1. We have audited the attached Balance Sheet of Premier Energy and Infrastructure Limited, as at 30th June 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Attention is drawn to the following without qualifying our report:

- Non obtaining of prior approval from Central Government of India under Section 295 of the Companies Act, 1956 for the loans given to a partnership firm in which a Director of the Company is a partner amounting to Rs.18.92 crores (Outstanding as on 30th June, 2012 - Nil),

Further to our comments in the Annexure referred to in paragraph 3 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 purposes of our audit;

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

(iii) 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;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

(v) On the basis of written representations obtained from the directors as on 30th June, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June, 2012, from being appointed as directors 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 explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

(a) in the case of the balance sheet, of the state of affairs of the Company as at 30th June, 2012;

(b) in the case of the Statement of profit and loss, of the profit of the Company 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



(i) Fixed Assets:

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

(b) The fixed assets have been physically verified by the management during the year. No material discrepancies were noticed on such verification.

(c) The fixed assets disposed / exchanged during the year, in our opinion do not constitute substantial part of the Company and such disposal in our opinion, has not affected the going concern status of the Company.

(ii) Inventories:

The Company does not have inventory and hence this clause is not applicable.

(iii) (a) The Company has granted unsecured loans of Rs. 18.84 crores to a firm and Rs. 14.09 crores to a Company covered in the Register maintained under Section 301 of the Companies Act. The year end balances of the loan amounts to Rs. 14.09 crores In our opinion since such loans were granted without any stipulations as regards repayment of principal or interest, we are unable to comment on whether the rate of interest, repayment terms are prima facie prejudicial to the interest of the Company and reporting on whether they are overdue does not arise.

(b) The Company has not taken unsecured loans from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(iv) The company has an adequate internal control Procedure commensurate with the size of the Company and the nature of its business for the purchase of fixed assets, and for the sale of goods and services.

(v) The particulars of contracts or arrangements referred to in Section 301 of the Act have been so entered in the register and the transactions exceeding five lakhs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has accepted deposits from a partnership firm and repaid during the year within a period of 30 days within the meaning of section 58A & 58 AA of the Act and the rules made there under.

(vii) The Company does not have an internal audit system commensurate with its size and nature of its business.

(viii) The company has not maintained cost records prescribed by the Central Government under Section 209(1)(d) of the Companies Act, 1956 (1 of 1956).

(ix) The Company is generally regular in depositing undisputed statutory dues including income-tax, sales tax, service tax, cess and other statutory dues with appropriate authorities. Minor delays which have been observed are not significant. Statutory dues in respect of provident fund, customs duty, excise duty, investor education and protection fund and employees state insurance are not applicable to the Company. There are no arrears of outstanding statutory dues as at the last day of the financial year for a period of more than six months after they became payable.

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

(xi) Based on our audit procedures and as per the information and explanations given by the management, the Company has not defaulted in repayment of dues to financial institution or bank or debenture holders except that the Company has a liability to pay to HUDCO Rs.56 lacs pursuant to a scheme of arrangement approved by the Court in February 2004, which is being contested by HUDCO and hence the payment for the same is being rejected by the party.

(xii) The Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, accordingly paragraph 4(xii) of the order is not applicable.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society to which the provisions of special statute relating to chit fund etc., are applicable, accordingly paragraph 4 (xiii) of the Order is not applicable.

(xiv) The Company has invested only its surplus funds in investments other than its subsidiaries and associates and hence clause 4(xiv) of the order is not applicable.

(xv) According to the information and explanations given to us, the Company has not given any guarantee during the year for loans taken by others from banks or financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the Company has not taken any term loan during the year and hence this clause is not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that, during the year, short- term funds have not been used to finance long-term investments.

(xviii) The Company has not made any preferential allotment of shares to parties covered in the Register maintained under Sec 301 of the Companies Act 1956 during the year.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by Public issue during the year;

(xxi) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year ended 30th June 2012.



For PKF Sridhar & Santhanam

Chartered Accountants Firm Registration No : 003990S



T.V. BALASUBRAMANIAN

Place : Chennai Partner

Date .11.09.2012 M.No : 027251


Jun 30, 2011

1. We have audited the attached Balance Sheet of Premier Energy and Infrastructure Limited, as at 30th June 2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Attention is drawn to the following without qualifying our report:

The company has applied for Central Government approval as required by provisions of Section 295 of the Companies Act, 1956 for the loans given to a partnership firm in which a director of the company is a partner amounting to Rs 21.04 crores (Outstanding as on 30th June, 2011 - Nil), which is pending for approval with the Ministry of Corporate affairs

5. Further to our comments in the Annexure referred to in paragraph 3 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 purposes of our audit;

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

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

(iv) 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.

(v) On the basis of written representations obtained from the directors as on 30th June, 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June, 2011, from being appointed as directors 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 explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required ;

In view of our inability to express an opinion

- on the computation of cost of land accounted as fixed asset of Rs. 92,470,000 and

- on the correctness of fixed assets revaluation reserve created in the past, in the absence of complete details.

We are unable to state if the said accounts 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 30th June, 2011;

(b) in the case of the profit and loss account, of the profit of the Company 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 referred to in Paragraph '3' of the Auditors' Report to the Member of PREMIER ENERGY AND INFRASTRUCTURE LIMITED on the Accounts for the year ended 30th June 2011

(i) Fixed assets:

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

(b) The fixed assets have been physically verified by the management during the year. No material discrepancies were noticed on such verification.

(c) The fixed assets disposed / exchanged during the year, in our opinion do not constitute substantial part of the fixed assets of the company and such disposal in our opinion, has not affected the going concern status of the company.

(ii) Inventories

(a) The Company does not have physical inventory and hence this clause is not applicable.

(iii) (a) The Company has granted unsecured loans to a firm covered in the register maintained under section 301 of the Act. The maximum amount involved during the year and the year end balance of such loans aggregates to Rs 21.04 crores and Nil respectively. In our opinion since such loans were granted without any stipulations as regards repayment of principal or interest, we are unable to comment on whether the rate of interest, repayment terms are prima facie prejudicial to the interest of the company and reporting on whether they are overdue does not arise.

The Company has taken unsecured loans from companies/ firms covered in the register maintained under section 301 of the Act. The company has taken short term loans Rs.1.85 crores from Haldia Coke & Chemicals Pvt. Ltd. and Rs. 46.50 crores from Ennore Coke Ltd. The loans have been repaid during the year. The interest paid is not prejudicial to the interests of the Company.

(iv) The company has an adequate internal control system and does not have major internal control weaknesses for the purchase of inventory and sale of goods and services.

(v) The particulars of contracts or arrangements referred to in Section 301 of the Act have been so entered in the register and the transactions exceeding five lakhs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from public within the meaning of section 58A & 58 AA of the Act and the rules made there under.

(vii) The Company does not have an internal audit system commensurate with its size and nature of its business.

(viii) The company is not required to maintain cost records prescribed by the central government under clause (d) of sub-section (1) of Sec. 209 of the Act.

(ix) Undisputed statutory dues including income-tax, service tax, cess have not been regularly deposited with the appropriate authorities though the delays in deposit have not been serious. Statutory dues in respect of provident fund, customs duty, excise duty, investor education and protection fund and employees state insurance are not applicable to the company.

(x) The Company has no accumulated losses at the end of the year and has not incurred cash losses in the current year and the immediately preceding financial year. (For the purpose of this clause the audit qualifications have not been considered).

(xi) Based on our audit procedures and as per the information and explanations given by the management, the company has not defaulted in repayment of dues to financial institution or bank or debenture holders except that the company has a liability to pay to HUDCO of Rs 56 lacs pursuant to a scheme of arrangement approved by the Court in February 2007, which is being contested by HUDCO and hence the payment for the same is being rejected by the party.

(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, accordingly paragraph 4(xii) of the order is not applicable.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society to which the provisions of special statute relating to chit fund etc., are applicable, accordingly paragraph 4 (xiii) of the Order is not applicable.

(xiv) The company is dealing or trading in shares, securities, debentures and other investments. Proper records have been maintained of the transactions and contracts and timely entries have been made therein; the shares, securities, debentures and other investments have been held by the company, in its own name.

(xv) According to the information and explanations given to us, the company has not given any guarantee during the year for loans taken by others from banks or financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the Company has not taken any term loan during the year and hence this clause is not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that, during the year, short-term funds have been used to finance long-term investments.

(xviii) The Company has not made any preferential allotment of shares to parties covered in the Register maintained under Sec 301 of the Companies Act, 1956 during the year.

(xix) The Company has not issued any debentures during the year.

(xx) The management has disclosed on the end use of money during the year raised by rights issues during the previous year and the same has been verified ;

(xxi) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year ended 30th June 2011.

For PKF Sridhar & Santhanam Chartered Accountants Firm Registration No : 003990S

T.V. BALASUBRAMANIAN

Place : Chennai Partner

Date : 14.02.2012 M.No : 27251


Jun 30, 2010

1. We have audited the attached Balance Sheet of Premier Energy and Infrastructure Limited, as at 30th June 2010. the Profit and Loss Account and also the Cash Flow Statement tor the fifteen month period ended on that date annexed thereto. These financial statements are the responsibility of the companys management Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditors Report) Oder, 2003 issued by the Centra! Government of India in terms of sub-section (4A) of section 227 of the Companies Act. 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. We have relied on the valuation report provided by an expert relating to Property held for Development during the reporting period.

5. Attention is drawn to the following without qualifying out report.

(a) Non compliance with the provisions of Section 372 A of the Companies Act, 1956 for the excess loans given &. investments Rs 67.309,392 (Maximum loan & investments during the year Rs. 137.603.225 ) made during the year of which loans outstanding as on 30th June, 2010 aggregate- to Rs 85,000 000 &. Investments as at 30th June. 2010 aggregate to Rs 34.147,480 and for non charging of interest on loans

(b) Not obtaining Central Government approval as required by previsions of Section 295 of the Companies Act. 1956 for the loans given to a partnership firm in which a director of the company is a partner amounting to Rs 465,048,807 ( Outstanding as on 30th june,2010 - Rs 48.300.000)

6. Further to our comments in the Annexure referred to in paragraph 3.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 purposes of our audit:

(ii) in our opinion, proper books of account as required by law nave been kept by the company So far as appears from our examination of the books.

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

(iv) In our opinion, the balance sheet, profit and loss account and cash flow statements dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 2nd of the Companies Act, 1956.

(v) On the basis of written representations obtained from the directors as on 30th June, 2010 and taken on record by the Board of Directors . we report that none of the directors is disqualified as on 30th June, 2010 , from being appointed as directors 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 explanations given to us. the said accounts give the information required by the Companies Act. 1956, in the manner so required , in view of our inability to express an opinion

- on the computation of cost of opening inventory of Rs 92,470,000 and

- on the correctness of fixed assets revaluation reserve created in the past, in the absence of complete benefits.

We are unable to state if the said accounts 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 30th June. 2010;

(b) in the case of the profit and loss account, of the profit of the Company for the fifteen month ended on that date: and

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

ANNEXURE TO THE AUDITORS REPORT ANNEXURE REFERRED TO IN PARAGRAPH OF MY REPORT OF EVEN DATE

(i) Fixed assets:

(a) The company has maintained proper records showing full particulars including quantitative deltus and situation of fixed assets;

(b) The fixed assets have been physically verified by the management during the year. No material discrepancies were noticed on such verification except that fixed assets which were physically not available have been removed from cost and accumulated depreciation to the extent of Rs. 53.993.800.

(c) The fixed assets disponed / exchanged during the year in our opinion do not constitute substantial part of the fixed assets of the company and such disposal in our opinion, has not affected the going concern status of the company,

(ii) Inventories (included under Property Held for Development)

(a) The inventor had been physically verified by the management, in our opinion, the frequency of verification is reasonable..

(b) The proceduces of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the company & the nature of its business.

(c) The Company had maintaining proper quantitative records on inventory. No discrepancy noticed on such verification.

(iii) (a) The Company has granted unsecured loans to a firm covered in the register maintained under section 301 of the Act. The maximum amount involved during the year .and the year end balance of such loans aggregates to Rs 206.325 656 and Rs 48,300,000 respectively, in our opinion since such loans were granted without any stipulations as regards repayment of principal or interest, we are unable to comment on whether the rate of interest. inpayment terms are prlmn facle prejudicial to the interest of the company and reporting on whether they are everdue does not arise.

The Company has not taken unsecured loans from companies/ firms covered in the register maintained under section 801 of the Act

(iv) The activities of the company during the year did not involve purchase of inventory and fixed assets and sale of goods and services. Accordingly, commenting on clause (iv) of this order is not applicable

(v) The particulars of contracts or arrangements referred to in Section 301 of the Act have been so entered in the register and the transactions exceeding five lacs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The company has not accepted deposits from public within the meaning of section 53A & 58 AA of the Act and the rules made there under.

(vii) The Company does not have an internal audit system commensurate with its size and nature of its business.

(viii) The company is not required to maintain cost records prescribed by the central government under clause (d) of sub-section (1) of sec.209 of the act.

(ix) Undisputed statutory dues including income-tax, service tax, cess have not been regulatly deposited with the appropriate authorities though the delays in deposit have not been serious except in case of service tax collected Rs 246.248 on account of rental income which has not been deposited for more than six months from the date it become payable. Statutory dues in respect of provident fund, customs duty, excise duty, investor education and protection fund and employees state insurance are not applicable to the company.

(x) The Company has no accumulated losses at the end of the year and has not incurred cash losses in the current year and the immediately preceding financial year. (For the purpose of this clause the audit qualifications have not been considered).

(xi) Based on our audit procedures and as per the information and explanations given by the management, the company has not defaulted in repayment of dues to financial institution or bank or debenture holders except that the company has a liability to pay to HUDCO of Rs 56 lacs pursuant to a scheme of arrangement approved by the Court in February 2004, which is being contested by HUDCO and hence the payment for the same is being rejected by the party.

(xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities, accordingly paragraph 4(Xii) of the order is not applicable.

(xiii) The Company is not a chit fund / nidhi / mutual benefit fund / society to which the provisions of special statute relating to chit fund etc., are applicable, accordingly paragraph 4 (xiii) of the Order is not applicable.

(xiv) The company is dealing or trading in shares, securities, debentures and other investments Proper records have been maintained of the transactions and contracts and timely entries have been made therein; the shares, securities, debentures and other Investments have been held by the company, in its own name.

(xv) According to the information and explanations given to us, the company has not given any guarantee during the year tor loans taken by others from banks or financial institutions.

(xvi) In our opinion and according to the information and explanations given to us, the Company has not taken any term loan during the year and hence this clause is not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that during the year, short-term funds have not been used to finance long-term investments.

(xviii) The Company has not made any preferential allotment of shares to parties covered in the Register maintained under Sec 301 of the Companies Act 1956 during the year.

(xix) The Company has not issued any debentures during the year.

(xx) The management has disclosed on the and use of money raised by rights issues and the same has been verified ;

(xxi) Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the period ended 30th June 2010.

For PKF Sridhar & Santhanam

Chartered Accountants

Firm Registration No : 003990S

S. Prasana Kumar

Chennai Partner

Date 31-08-2010 M. No : 212354

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