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Auditor Report of Ramco Industries Ltd.

Mar 31, 2016

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

Management’s Responsibility for the 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor’s 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 specified under Section 143(10) of the Act. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 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. 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.

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 31 March 2016, its Profit and its Cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

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

f) We have enclosed our separate report in “Annexure B” With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls. Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Company’s internal financial controls over financial reporting.

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

i. The details of the pending litigations and its impact on the financial statements have been disclosed in the Note No. 25.1.11 to 25.1.VI of the ‘Disclosures forming part of Standalone Financial Statements’ for the year ended 31 March 2016.

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

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

Referred to in paragraph 1 under the heading ‘Report on Other Legal a Regulatory Requirement’ of our report of even date to the financial statements of the Company for the year ended 31 March 2016:

1) Fixed Assets

1.1 The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets;

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

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

2) Inventory

2.1 Management has conducted the physical verification of inventory at reasonable intervals.

2.2 The discrepancies noticed on verification between the physical stocks and the book records were properly dealt with in the books of account and were not material.

3) The Company has granted loan to a party listed in the Register maintained under section 189 of the Act. The maximum outstanding at any time during the year Rs, 602.45 lakhs (PY Rs, 631.31 lakhs) and the amount outstanding as on 31 March 2016 is Rs, 461.79 lakh (PY Rs, 602.45 lakhs).

3.1 In our opinion, the terms and conditions on which the loan has been granted to the party listed in the register maintained under Section 189 of the Act are not prejudicial to the interest of the Company.

3.2 The payment of the principal and the interest wherever applicable are regular.

3.3 There are no overdue amounts in respect of the loan granted to a party listed in the register maintained under section 189 of the Act.

4) In our opinion and according to the information and explanations given to us, the company has complied with the provisions of section 185 and 186 of the Act, in respect of loans, investments, guarantees and security.

5) The Company has not accepted any deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.

6) The company is maintaining the accounts and records which have been specified by the Central Government under Section 148(1) of the Act.

7) Undisputed and Disputed taxes and duties

7.1 The Company is regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, Duty of Customs, Duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable.

7.2 The Disputed statutory dues aggregating to Rs, 5171.61 lakhs (PY Rs, 3843.38 lakhs) that have not been deposited on account of matters pending before appropriate authorities are as under.

(Rs, In lakhs)

Sl

No.

Name of the Statute

Forum where dispute is pending

As on

31-03-16

As on 31-03-15

1

Income Tax Act

Deputy Commissioner

15.25

15.25

Commissioner Appeal

1684.59

2712.83

High Court

2563.56

399.06

2

Sales Tax Act

CST Act

Appellate Authority

3.33

0.69

Assistant/Deputy/Joint Commissioner Appeal

10.42

110.66

Tribunal Court

18.45

18.45

High Court

311.61

Entry Tax Act

Assistant/Deputy/Joint Commissioner Appeal

9.95

9.41

Sales Tax Act

Appellate Authority

72.45

72.45

VAT Act

Appellate Authority

1.01

1.71

Assistant/Deputy/Joint Commissioner Appeal

24.38

24.38

Tribunal Court

50.32

50.32

3

Central Excise Act and Cenvat Credit Rules

Appellate Authority

57.33

65.28

4

Electricity Act

High Court

348.95

362.89

Total

5171.61

3843.38

8) The Company has not defaulted in repayment of dues to Financial Institutions or Banks. The Company has neither taken loans from the Government nor has issued any debentures during the year.

9) The Company did not raise any money by way of initial public offer or further public offer (including debt instruments). The Company has raised term loans during the year and these have been applied for the purposes for which they were raised.

10) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the company by its officers or employees has been noticed or reported during the year.

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

12) I n our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 3 (xii) of the Order are not applicable to the Company.

13) I n our opinion, all transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

14) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the Order are not applicable to the Company.

15) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company.

16) I n our opinion, the company is not required to be registered under section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”) We have audited the internal financial controls over financial reporting of Ramco Industries Limited(“The Company”) as of 31 March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

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

Auditor’s Responsibility

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

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

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

Meaning of Internal Financial Controls over Financial Reporting

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

Inherent Limitations of Internal Financial Controls over Financial Reporting

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

Opinion

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

For M/s M.S. JAGANNATHAN & N. KRISHNASWAMI For M/s. CNGSN & ASSOCIATES LLP

Chartered Accountants Chartered Accountants

Firm’s Registration No.: 001208S Firm’s Registration No.: 004915S

LLP Registration on No. S200036

K.SRINIVASAN C.N.GANGADARAN

Partner Partner

Membership No.: 021510 Membership No.: 011205

Place : Chennai Date : 20th May, 2016


Mar 31, 2015

We have audited the accompanying standalone financial statements of Ramco Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, and the Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the 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 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 of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the 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 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. 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.

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 year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

2.2. 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.

2.3. 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 accounts.

2.4. In our opinion, the 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.

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

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

2.6.1. The details of the pending litigations and its impact on the Financial statements have been disclosed in the Note No.25.1.II to 25.1.VII and Note No.25.6

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

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

ANNEXURE TO THE AUDITORS''REPORT

Annexure referred to item no. 1 of paragraph ''Report on Other Legal and Regulatory Requirements''.

In our opinion and to the best of knowledge and belief and as per the information and explanation given to us and on the basis of books and records examined by us in the normal course of audit, we report that:

1. Fixed Assets

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

1.2. The management at reasonable intervals has physically verified the fixed assets of the company and no material discrepancies were noticed on such verification.

2. Inventories

2.1. Management has conducted physical verification of its inventory at reasonable intervals.

2.2. The procedure for physical verification of inventory followed by the management is reasonable and is adequate in relation to the size of the company and the nature of its business.

2.3. On the basis of our examination of the records of inventory, we are of the opinion that the company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. Loans and Advances

3.1. The Company has granted loan to a party listed in the Register maintained under Section 189 of the Companies Act, 2013. The maximum outstanding at any time during the year Rs. 631.31 lakhs (PY Rs. 663.89 lakhs) and the amount outstanding as on 31-Mar-15 is Rs. 602.45 lakhs (PY Rs. 631.33 lakhs).

3.2. The payment of the Principal amounts and the Interest wherever applicable are regular.

4. There are no overdue amounts in respect of the loans granted to the parties listed in the Register maintained under Section 189 of the Act. There are adequate internal control systems 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. We have not observed any major weakness in the internal control system during the course of the audit.

5. The company has not accepted any deposits within the meaning of Companies (Acceptance of Deposits) Rules 2014, from the public during the year. The Deposits accepted by the Company before the commencement of the Companies Act 2013 have been repaid as per the provisions of Section 74 of the Act. No order has been passed by the Company Law Board or the National Company Law Tribunal or by any court or by any other Tribunal against the Company.

6. The Company is maintaining the accounts and records which have been specified by the Central Government under of Section 148(1) of the Companies Act, 2013.

7. Undisputed and disputed taxes and duties

7.1. The company is regular in depositing undisputed statutory dues including provident fund, employee''s state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employee''s state insurance, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and other statutory dues were in arrears as at 31st March, 2015 for a period of more than six months from the date they become payable.

7.2. The Disputed Statutory dues aggregating to Rs. 3843.38 Lakhs (P.Y Rs. 2000.44 Lakhs) that have not been deposited on account of matters pending before appropriate authorities are as under:

Sl Amount

Name of the Statute Forum where dispute is pending No. (Rs. In lakhs)

1 Income Tax Act Deputy Commissioner 15.25

Commissioner Appeal 2712.83

High Court 399.06

2 CST Act Appellate Authority 0.69

Assistant/Deputy/Joint Commissioner Appeal 110.66

Tribunal Court 18.45

3 Entry Tax Act Assistant/Deputy/Joint Commissioner Appeal 9.41

4 Sales Tax Act Appellate Authority 72.45

5 VAT Act Appellate Authority 1.71

Assistant/Deputy/Joint Commissioner Appeal 24.38

Tribunal Court 50.32

6 Central Excise Act and Cenvat Credit Rules Appellate Authority 65.28

7 Electricity Act High Court 362.89

Total 3843.38

7.3. The amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act 1956 (1 of 1956) and rules there under has been transferred to such fund within time.

8. The company does not have any accumulated losses at the end of the financial year and has not incurred any cash losses during the financial year and in the immediately preceding financial year.

9. The Company has not defaulted in repayment of dues to financial institutions or banks and the Company has not issued any debenture during the year.

9.1. Based on the information and explanation given to us, the terms and conditions of the guarantee given by the Company to others {[Ramco Systems Limited – Guarantee given Rs. 3550.00 Lakhs (P.Y Rs. 6550.00 Lakhs) - Loans outstanding Rs. 440.27 lakhs (P.Y Rs. 4260.42 Lakhs)], [Sri Harini Textiles Limited – Guarantee given Rs. 3629.00 Lakhs (PY Rs. 3629.00 lakhs), Loans outstanding Rs. 1747.25 lakhs (P.Y. Rs. 2233.61 Lakhs)]} to secure loans availed from banks by the respective Companies, are not prejudicial to the interest of the Company.

9.2. The Company has raised Term loans during the year and these have been applied for the purposes for which they were raised.

9.3. No material fraud on or by the Company has been noticed or reported during the course of audit.

For M/s M.S. JAGANNATHAN & N. KRISHNASWAMI For M/s. CNGSN & ASSOCIATES LLP Chartered Accountants Chartered Accountants

Firm''s Registration No.: 001208S Firm''s Registration No.: 004915S



K.SRINIVASAN C.N.GANGADARAN

Partner Partner

Membership No.: 021510 Membership No.: 011205



Place : Chennai

Date : 29th May, 2015


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying fi nancial statements of M/s. Ramco Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profi t and Loss and Cash Flow Statement for the year then ended, and a summary of signifi cant accounting policies and other explanatory information

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fi nancial statements that give a true and fair view of the fi nancial position, fi nancial performance and cash fl ows 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 interna control relevant to the preparation and presentation of the fi nancial statements that give a true and fair view and are free from materia misstatement, whether due to fraud or error.

Auditors'' Responsibility

Our responsibility is to express an opinion on these fi nancial 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 fi nancial statements are free from material misstatement

An audit involves performing procedure to obtain audit evidence about the amounts and disclosures in the fi nancial statements The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the fi nancial statement 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 fi nancial 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 fi nancial statements

We believe that the audit evidence we have obtained is suffi cient 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 fi nancial statements give the nformation 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 Profi t and Loss Account, of the profi t for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the cash fl ows for the year ended on that date

Report on Other Legal and Regulatory Requirements

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

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

2.1. 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;

2.2. in our opinion proper books of account as required by law have been kept by the Company so far as it appears from our examina tion of those books;

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

2.4. in our opinion, the Balance Sheet, Statement of Profi t and Loss, and Cash Flow Statement comply with the Accounting Stand ards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; and

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

ANNEXURE TO THE AUDITORS'' REPORT

Annexure referred to in item no. 1 of paragraph ''Report on Other Legal and Regulatory Requirements''

In our opinion and to the best of our knowledge and belief as per the information and explanation given to us and on the basis of the books and records examined by us in the normal course of audit, we report that:

1. Fixed assets

1.1. The company has maintained proper records showing full particulars, including quantitative details and situation of fi xed assets

1.2. The management at reasonable intervals has physically verifi ed the fi xed assets of the company and no materia discrepancies were noticed on such verifi cation

1.3. The fi xed assets disposed during the year were not substantial and therefore, do not affect the going concern assumption

2. Inventories

2.1. The management has conducted physical verifi cation at reasonable intervals in respect of its inventory

2.2. The procedure for physical verifi cation of inventory followed by the management is reasonable and is adequate in relation to the size of the company and the nature of its business

2.3. The company is maintaining proper records of inventory. The discrepancies noticed on verifi cation between the physica stocks and the book records were not material

3. Loans and advances

3.1. The company has granted loan to one party listed in the register maintained under section 301 of the Companies Act, 1956. The maximum outstanding at any time during the year was Rs.738.49 lacs (PY Rs.835.48 lacs) and the amount outstanding as on 31-Mar-2013 was Rs. 663.86 lacs (PY Rs.738.45 lacs)

3.2. The rate of interest and other terms and conditions of loans given by the company referred to paragraph 3.1 above are not, prima facie, prejudicial to the interest of the company

3.3. The payment of the principal amounts and the interest wherever applicable are regular.

3.4. There is no overdue amount with respect to above loans

3.5. The company has taken loans aggregating to Rs.383.52 lacs (PY Rs.274.35 lacs) from 2 parties listed in the register maintained under section 301 of the Companies Act, 1956. The maximum outstanding at any time during the year was Rs.192.87 lacs (PY Rs.99.92 lacs) and the outstanding as on 31-Mar-2013 was Rs.78.93 lacs (PY Rs.21.43 lacs)

3.6. The rate of interest and other terms and conditions of loan taken by the company are not, prima facie, prejudicial to the interest of the company

3.7. The loans given/taken by the company are repayable on demand and have been received/paid on demand

4. The company has an internal control system which is adequate and is commensurate with the size of the Company and nature of its business for the purchase of inventory and fi xed assets and for the sale of goods and services. There are no major weaknesses in internal controls system

5. Section 301 contracts

5.1. Particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been so entered in the register required to be maintained under that section

5.2. These transactions exceeding value of Rs. 5 lacs have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time

6. The company has accepted deposits from the public and the directives issued by the Reserve Bank of India and the provisions of section 58A and 58AA or any other relevant provisions of the Act and the rules framed there under, whereever applicable have been complied with

7. The company has an internal audit system commensurate with its size and nature of its business

8. The cost accounts and the records prescribed by the Central Government under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 have been made and maintained

9. Statutory dues

9.1. The company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth tax, Service tax, Custom Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities

9.2. The disputed statutory dues aggregating to Rs 2927.84 lacs (PY Rs. 2188.90 lacs) that have not been deposited on account of matters pending before appropriate authorities are as under

Sl No.Name of the statute Forum where dispute is pending Amount (Rs. in Lacs)

1 Sales Tax Act High Court 35.88

2 Excise and Service Tax CESTAT 11.06

3 Income Tax CIT (Appeals) 2,880.90

Total 2,927.84

10. The company does not have any accumulated losses at the end of the fi nancial year and has not incurred any cash losses during the fi nancial year covered by our audit or in the immediately preceeding fi nancial year.

11. The company has not defaulted in repayment of dues to fi nancial institutions, banks or debentures holders

12. The company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities

13. The company is not a chit fund or a nidhi/mutual benefi t fund/society Therefore, the provisions of clause 4(xiii) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company

14. The company is not dealing in or trading in shares, securities, debentures and other investments. Therefore, the provisions of clause 4(xiv) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company

15. Based on information and explanations given to us, the terms and conditions of the guarantee given by the Company to re- ated parties ([Ramco Systems Limited - Guarantee given Rs. 6550 lacs (PY Rs.5500 lacs); Loans outstanding Rs.4185.22 lacs (PY Rs.4433.81 lacs)]; [Sri Harini Texiles Limited - Guarantee given Rs.3629 lacs (PY Rs.3629 lacs); Loans outstanding Rs.2424.50 acs (PY Rs.2538.79 lacs)], [Deccan Renewal Wind Electrics Limited/Axis Wind Energy Limited - Guarantee given Rs.770 lacs (PY Rs.770 lacs); Loans outstanding Rs.761 lacs (PY Rs.761 lacs)]; to secure loans availed from banks by the respective companies, are not prejudicial to the interests of the Company

16. The Company has raised term loans during the year and these have been applied for the purposes for which they were raised

17. The funds raised on short-term basis have not been used for long-term investment

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

19. The company has no outstanding amount under Debentures that require creation of security/charge

20. The company has not raised any money by way of public issues during the year.

21. No material fraud on or by the company has been noticed or reported during the year.

For M/s. M.S. JAGANNATHAN & N. KRISHNASWAMI For M/s. CNGSN & ASSOCIATES

Chartered Accountants Chartered Accountants

Firm Registration No.: 001208S Firm Registration No.: 004915S

P. SANTHANAM C.N. GANGADARAN

Partner Partner

Membership No.: 018697 Membership No.: 011205

Place: Chenna

Date : 30.05.2013


Mar 31, 2012

1. We have audited the attached Balance Sheet of Ramco Industries Limited, Rajapalayam as at 31st March, 2012 and the Profit and Loss account for the year ended on that date annexed thereto and the Cash Flow statement for the year ended on that date. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatements. 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 (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we have annexed hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, We report that:

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

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

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

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

e. As per representation made by the Company and its Directors, no Director is disqualified from being appointed as Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f. In our opinion and to the best of our information and according to the explanations given to us, they said accounts give the information required by the Companies Act, 1956, in the manner so required and gives a true and fair view in conformity with the accounting principles generally accepted in India:

i. in so far it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

ii. in so far it relates to the Profit and Loss Account, of the profit of the Company for the year ended on that date;

iii. and in so far it relates to the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

With reference to paragraph 3 of our report to the shareholders of Ramco Industries Limited of even date, in our opinion and to the best of our knowledge and belief and as per the information and explanations given to us and the books and 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 management at reasonable intervals has physically verified the fixed assets of the company and no material discrepancies were noticed on such verification, c The Company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

ii. a The management has conducted physical verification at reasonable intervals in respect of its inventory.

b The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business, c The Company has maintained proper records of inventories. The discrepancies noticed on verification between the physical stocks and the books records were not material.

iii. a The Company has granted loan to one party listed in the register maintained under section 301 of the Companies Act, 1956.(maximum amount outstanding at any time during the year is Rs 835.48 lacs; outstanding as on 31st March, 2012 is Rs 738.45 lacs)

b The rate of interest and other terms and conditions of the loans given by the Company are not prima facie, prejudicial to the interest of the Company, c The payment of the principal amount and interest wherever applicable are regular, d There are no overdue amounts with respect to above loans.

e The Company has taken loans from two parties aggregating to f 274.35 lacs (maximum amount outstanding at any time during the year Rs 99.92 lacs; outstanding as on 31s' March, 2012 Rs21.43 lacs) from parties listed in the register maintained under section 301 of the Companies Act, 1956.

f The rate of interest and other terms and conditions of the loans taken by the Company are not prima facie, prejudicial to the interest of the Company.

g The loans given/taken by the Company are repayable on demand and have been received / paid on demand.

iv. The Company has an internal control system which is adequate and 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. There are no major weaknesses in internal control system.

v. a Particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been so entered in the register maintained for such purpose.

b These transactions 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 the public and the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under where applicable have been complied with.

vii. The Company has an internal audit system commensurate with its size and nature of its business.

viii. The Central Government has prescribed maintenance of cost records under clause (a) of sub-section (1) of section 209 of the Companies Act, 1956 for Textile Industry and the said records are maintained by the company for its Textile Division.

ix. a The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities, b The disputed statutory dues aggregating to Rs 2,188.90 lacs that have not been deposited on account of matters pending before appropriate authorities are as under:

SI. No. Name of the statute Forum where dispute is pending Amount (Rs.In lacs)

1 Sales-tax Act High Court 9.90

2 Income Tax CIT (Appeals) 2,179.00

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

xi. The Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The Company is not a chit fund or a nidhi / mutual benefit fund or society. Therefore clause 4(xiii) is not applicable to the company.

xiv. The Company is not dealing or trading in shares or securities, debentures and other investments. Therefore clause 4(xiv) is not applicable to the Company.

xv. Based on information and explanations given to us, the terms and conditions of the guarantee given by the Company to parties consisting of related parties ([Ramco Systems Limited - Guarantee given X 5,500 lacs; Loans outstanding X 4,433.81 lacs]; [Sri Harini Textiles Limited - Guarantee given X 3,629 lacs; Loans outstanding X 2,538.79 lacs], [Deccan Renewable Wind Electrics Limited / Axis Wind Energy Limited - Guarantee given X 770 lacs ; Loans outstanding X 761 lacs]; to secure loans availed from banks by the respective companies are not prejudicial to the interests of Ramco Industries Limited.

xvi. The new term loans during the year were applied for the purposes for which these were raised.

xvii. The funds raised on short term basis have not been used for long term investment during the year.

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

xix. The Company has not issued any debentures.

xx. The Company has not raised any money by way of public issues during the year.

xxi. No fraud on or by the Company has been reported or noticed during the year.

For M.S. JAGANNATHAN & N. KRISHNASWAMI For CNGSN & ASSOCIATES

Chartered Accountants Chartered Accountants

FRN: 001208S FRN: 004915S

P.SANTHANAM C.N. GANGADARAN

Partner Partner

Membership No.018697 Membership No.011205

Place : Chennai

Date : 24.05.2012


Mar 31, 2011

1. We have audited the attached Balance Sheet of Ramco Industries Limited, Rajapalayam as at 31st March, 2011 and the Profit and Loss account for the year ended on that date annexed thereto and the Cash Flow statement for the year ended on that date. 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 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 misstatements. 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 (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we have annexed hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, We report that:

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

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

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

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

e. As per representation made by the Company and its Directors, no Director is disqualified from being appointed as Director in terms of clause (g) of sub-section (1) of section 274 of the Companies act, 1956;

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and gives a true and fair view in conformity with the accounting principles generally accepted in India:

i. in so far it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2011;

ii. in so far it relates to the Profit and Loss Account, of the profit of the Company for the year ended on that date;

iii. and in so far it relates to the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

With reference to paragraph 3 of our report to the shareholders of Ramco Industries Limited of even date, in our opinion and to the best of our knowledge and belief and as per the information and explanations given to us and the books and 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 management at reasonable intervals has physically verified the fixed assets of the company and no material discrepancies were noticed on such verification.

c The Company has not disposed of substantial part of fixed assets during the year and the going concern status of the company is not affected.

ii. a The management has conducted physical verification at reasonable intervals in respect of its inventory.

b The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

c The Company has maintained proper records of inventories. The discrepancies noticed on verification between the physical stocks and the books records were not material.

iii. a The Company has not granted any loans to any party listed in the register maintained under section 301 of the Companies act, 1956.

b The rate of interest and other terms and conditions of the loans given by the Company are not prima facie, prejudicial to the interest of the Company.

c The payment of the principal amount and interest wherever applicable are regular.

d There are no overdue amounts with respect to above loans.

e The Company has taken loans from two parties aggregating to Rs.4.15 crores (maximum amount outstanding at any time during the year Rs.1.42 Crores; outstanding as on 31st March, 2011 Rs.1 Crore) from parties listed in the register maintained under section 301 of the companies act, 1956.

f The rate of interest and other terms and conditions of the loans taken by the Company are not prima facie, prejudicial to

the interest of the Company.

g The loans given/taken by the Company are repayable on demand and have been received / paid on demand.

iv. The company has an internal control system which is adequate and 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. There are no major weaknesses in internal control system.

v. a Particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been so entered in the register maintained for such purpose.

b These transactions 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 the public and the directives issued by the Reserve Bank of India and the provisions of sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under where applicable have been complied with.

vii. The Company has an internal audit system commensurate with its size and nature of its business.

viii. The Central Government has prescribed maintenance of cost records under clause (a) of sub-section (1) of section 209 of the Companies Act, 1956 for Textile Industry and the said records are maintained by the company for its Textile Division.

ix. a The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

b The disputed statutory dues aggregating to Rs. 22.68 crores that have not been deposited on account of matters pending before appropriate authorities are as under:

Sl. No. Name of the statute Forum where dispute is pending Amount (Rs. In crores)

1 Sales-tax Act High Court 0.89

2 Income Tax CIT (Appeals) 21.79

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

xi. The Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The Company is not a chit fund or a nidhi / mutual benefit fund or society. Therefore clause 4(xiii) is not applicable to the company.

xiv. The Company is not dealing or trading in shares or securities, debentures and other investments. Therefore clause 4(xiv) is not applicable to the Company.

xv. The terms and conditions of the guarantee given by the Company for loans taken by others from banks or financial institutions are not prima facie prejudicial to the interests of the Company.

xvi. The new term loans during the year were applied for the purposes for which these were raised.

xvii. The funds raised on short term basis have not been used for long term investment during the year.

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

xix. The Company has not issued any debentures.

xx. The Company has not raised any money by way of public issues during the year.

xxi. No fraud on or by the Company has been reported or noticed during the year.

For M.S. Jagannathan & N. Krishnaswami For CNGSN & Associates Chartered Accountants Chartered Accountants FRN: 001208S FRN: 004915S K. Srinivasan C.N. Gangadaran Partner Partner Membership No.21510 Membership No.11205

Place : Chennai Date : May 25, 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Ramco Industries Limited, Rajapalayam as at 31st March, 2010 and the Profit and Loss account for the year ended on that date annexed thereto and the Cash Flow statement for the year ended on that date. 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 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 misstatements. 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 (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we have annexed hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the annexure referred to in paragraph 3 above, We report that:

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

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

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

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

e. As per representation made by the Company and its Directors, no Director is disqualified from being appointed as Director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and gives a true and fair view in conformity with the accounting principles generally accepted in India:

i. in so far it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

ii. in so far it relates to the Profit and Loss Account, of the profit of the Company for the year ended on that date;

iii. and in so far it relates to the Cash Flow statement, of the cash flows of the Company for the year ended on that date.

ANNEXURE TO THE AUDITORS REPORT

With reference to paragraph 3 of our report to the shareholders of Ramco Industries Limited of even date, in our opinion and to the best of our knowledge and belief and as per the information and explanations given to us and the books and 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 management at reasonable intervals has physically verified the fixed assets of the Company and no material discrepancies were noticed on such verification.

c The Company has not disposed of substantial part of fixed assets during the year and the going concern status of the Company is not affected.

ii. a The management has conducted physical verification at reasonable intervals in respect of its inventory.

b The procedure of physical verification of inventory followed by the management is reasonable and adequate in relation to the size of the Company and nature of its business.

c The Company has maintained proper records of inventories. The discrepancies noticed on verification between the physical stocks and the books records were not material.

iii. a The Company has granted loans aggregating to Rs.12.70 crores (maximum outstanding at any time during the year Rs.12.70 crores, outstanding as on 31st March, 2010 - Rs.8.45 crores) to parties (3 parties) listed in the register maintained under Section 301 of the Companies Act, 1956.

b The rate of interest and other terms and conditions of the loans given by the Company are not prima facie, prejudicial to the interest of the Company.

c The payment of the principal amount and interest wherever applicable are regular.

d There are no overdue amounts with respect to above loans.

e The Company has taken loans from two parties aggregating to Rs.3.06 crores (maximum amount outstanding at any time during the year Rs.1.73 Crores; outstanding as on 31st March, 2010 Rs.0.86 Crores) from parties listed in the register maintained under Section 301 of the Companies Act, 1956.

f The rate of interest and other terms and conditions of the loans taken by the Company are not prima facie, prejudicial to the interest of the Company.

g The loans given/taken by the Company are repayable on demand and have been received / paid on demand.

iv. The Company has an internal control system which is adequate and 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. There are no major weaknesses in internal controls system.

v. a Particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been so entered in the register maintained for such purpose.

b These transactions 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 the public and the directives issued by the Reserve Bank of India and the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the rules framed there under where applicable have been complied with.

vii. The Company has an internal audit system commensurate with its size and nature of its business.

viii. The Central Government has not prescribed maintenance of cost records under clause (a) of sub-section (1) of Section 209 of the Companies Act, 1956.

ix. a The Company is regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income-tax, Sales-tax, Wealth-tax, Service tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities.

b The disputed statutory dues aggregating to Rs. 0.89 crores that have not been deposited on account of matters pending before appropriate authorities are as under:

Sl. No. Name of the statute Forum where dispute is pending Amount (Rs. In crores)

1 Sales-tax Act High Court 0.89

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

xi. The Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

xii. The Company has not granted any loans or advances on the basis of security by way of pledge of shares, debentures and other securities.

xiii. The Company is not a chit fund or a nidhi / mutual benefit fund or society. Therefore clause 4(xiii) is not applicable to the Company.

xiv. The Company is not dealing or trading in shares or securities, debentures and other investments. Therefore clause 4(xiv) is not applicable to the Company.

xv. The terms and conditions of the guarantee given by the Company for loans taken by others from banks or financial institutions are not prima facie prejudicial to the interests of the Company.

xvi. The new term loans during the year were applied for the purposes for which these were raised.

xvii. The funds raised on short-term basis have not been used for long-term investment during the year.

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

xix. The Company has not issued any debentures.

xx. The Company has not raised any money by way of public issues during the year.

xxi. No fraud on or by the Company has been reported or noticed during the year.

For M.S. Jagannathan & N. Krishnaswami For CNGSN & Associates

Chartered Accountants Chartered Accountants

FRN: 001208S FRN: 004915S

K. Srinivasan C.N.Gangadaran

Partner Partner

Membership No. 21510 Membership No. 11205

Chennai May 24, 2010

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