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Auditor Report of Rane (Madras) Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Rane (Madras) Limited ("the Company"), which comprise the Balance Sheet as at 31st march 2015, the Statement of profit and Loss, the cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of thes e 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.

Auditors' Responsibility

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

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

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

Opinion

in our opinion and to the best of our information and according to the explanations given to us, the aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in india, of the state of affairs of the Company as at

31st March 2015, its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government in terms of Section 143 (11) of the Act, we give in the Annexure a statement on the matters specified in paragraph 3 of the Order.

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 financial statements comply with the Accounting Standards specified under Section 133 of the AcL read with rule 7 of the companies (accounts) rules, 2014.

(e) on the basis of the written representations received from the directors as on 31st March 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 AcL

(f) with respect to the other matters to be included in the auditor's report in accordance with rule 11 of the companies (Audit & Auditors ) rule, 2014, in our opinion and to the best of our information and according to the explanation given to us :

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements. refer Note no. 27 to the financial statements.

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

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

(Referred to under 'Report on Other Legal and Regulatory Requirements' section of our report to the members of Rane (Madras) limited on the accounts for the year ended 31st March 2015)

(i) In respect of its fixed assets:

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

b) the company has a program of verification of fixed assets to cover all the assets in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. pursuant to the program, certain fixed assets were physically verified by the management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(ii) in respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals. in case of inventories lying with third parties, certificates confirming the inventory have been received in respect of a substantial portion of the stocks held during the year and at the year-end.

(b) in our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

(c) in our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories and no material discrepancies were noticed on physical verification.

(iii) according to the information and explanations given to us, the company has granted loans, secured or unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the companies AcL 2013. in respect of such loans:

(a) the receipt of principal amounts has been regular/as per stipulations.

(b) there is no overdue amount in excess of Rs. 1 lakh remaining outstanding as at the year-end.

(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 for the purchase of inventory and fixed assets and for the sale of goods and services and during the course of our audit we have not observed any continuing failure to correct major weaknesses in such internal control system.

(v) according to the information and explanations given to us, the company has not accepted any deposit during the year. in respect of unclaimed deposits, the company has complied with the provisions of Sections 73 to 76 or any other relevant provisions of the companies AcL 2013. in respect of deposits amounting to Rs.462.50 lakhs accepted in earlier years and which have not fallen due for payment and remain outstanding as at 31st march 2015 as per the terms of acceptance of these deposits, taking into account the company's application to the company law Board, chennai (cLB), seeking permission to repay the fixed deposits on the respective maturity dates in accordance with the terms of acceptance of these deposits, which is pending for their approval, as given in Note No. 4(iii), the company has complied with the provisions of section 73 and section 74 of the companies act 2013.

(vi) we have broadly reviewed the cost records maintained by the company pursuant to the companies (cost Records and audit) Rules, 2014, as amended prescribed by the central Government under sub-section (1) of Section 148 of the companies AcL 2013, and are of the opinion that, prima facie, the prescribed cost records have been made and maintained. we have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

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

(a) the company has been generally regular in depositing undisputed statutory dues including provident Fund, Employees' State insurance, investor Education and protection Fund, income-tax, Sales tax, Wealth tax, Service tax, customs Duty, Excise Duty, Value added tax, cess and other material statutory dues applicable to it with the appropriate authorities.

(b) there were no undisputed amounts payable in respect of provident Fund, Employees' State insurance, investor Education and Protection Fund, income-tax, Sales tax, wealth tax, Service tax, customs Duty, Excise Duty, Value added tax, cess and other material statutory dues in arrears as at 31st March 2015 for a period of more than six months from the date they became payable.

(c) Details of Excise Duty, Service tax and income tax which have not been deposited as on 31st March 2015, on account of disputes are given below:

Name of Statute Nature of Dues Amount Involved (Rs. in crores)

Central Excise Act, 1944 Excise Duty 0.13

Central Excise Act, 1944 Excise Duty 0.67

Central excise act, 1944 Service Tax 0.44

central excise act, 1944 Service tax 0.45

income tax act, 1961 income tax 0.07

income tax act, 1961 income tax 0.31

income tax act, 1961 income tax 6.52

income tax act, 1961 income tax 1.65

income tax act, 1961 income tax 0.26

income tax act, 1961 income tax 0.43

income tax act, 1961 income tax 2.39

central Sales tax, 1956 Sales tax 1.10

Name of Statute Period to which Forum where Dispute is the Amount Relates Pending

Central Excise Act, 1944 2009-10 Customs, Excise and Service tax appellate tribunal

Central Excise Act, 1944 2007- 08 to 2011-12 Commissioner of central Excise (appeals)

Central Excise Act, 1944 2006-07 to 2012-13 Customs, Excise and Service tax appellate tribunal

Central Excise Act, 1944 2006-07 to 2014-15 Commissioner of central Excise (appeals)

Income tax act, 1961 1996- 97 High court

Income tax act, 1961 1997- 98 Supreme court

Income tax act, 1961 2008- 09 Commissioner of income tax Appeals)

Income tax act, 1961 2009- 2010 Commissioner of income tax Appeals)

Income tax act, 1961 2010-11 Commissioner of income Tax Appeals)

Income tax act, 1961 2011-12 Commissioner of income Tax Appeals)

Income tax act, 1961 2012-13 Commissioner of income tax Appeals)

Income tax act, 1961 2005-06, 2006-07, Joint commissioner of

central Sales tax, 1956 2008-09, 2010-11 Commercial taxes

(viii) there are no accumulated losses as at the end of the financial year and the company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

(ix) in our opinion and according to the information and explanations given to us, the company has not defaulted in the repayment of dues in respect of term loans. the company has not obtained any loans from financial institutions and has not issued any debentures.

(x) in our opinion and according to the information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

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

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

For Deloitte Haskins and Sells Chartered Accountants (Firm's registration No.: 008072S)

Chennai Geetha Suryanarayanan May 21,2015 Partner (Membership No. 29519)


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the 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 aforesaid financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

Report on Other Legal and Regulatory Requirements

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

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

a. We have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards referred to in Section 211(3C) of the Act.

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

(i) Having regard to the nature of the Company''s business/activities/results during the year, clauses 4(x), 4(xii), 4(xiii), 4(xiv), 4(xv), 4(xviii), 4(xix) and 4(xx) of CARO are not applicable.

(ii) In respect of its fixed assets:

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

(b) The Company has a program of verification of fixed assets to cover all the assets in a phased manner over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the program, certain fixed assets were physically verified by the Management during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

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

(iii) In respect of its inventory:

(a) As explained to us, the inventories were physically verified during the year by the Management at reasonable intervals.

(b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the Management were reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on physical verification between the physical stocks and the book records were not material having regard to the size of the operations of the Company and have been properly dealt with in the books of account.

(iv) (A) in respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties listed in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted loan in the form of Interest Free Loans aggregating Rs. 0.75 crores to one party during the year. At the year end, the outstanding balance of such loan is Rs. 0.75 crores and the maximum amount involved during the year was Rs. 0.75 crores.

(b) The other terms and conditions of such loan is, in our opinion, prima facie, not prejudicial to the interest of the Company.

(c) The receipt of principal amounts has been regular.

(d) There were no overdue amounts at the year end, on this account.

(B) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956.

(v) 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 purchases of inventory and fixed assets and for the sale of goods. During the course of our audit, we have not observed any major weakness in such internal control system.

(vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956, to the best of our knowledge and belief and according to the information and explanations given to us:

(a) The particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 that needed to be entered in the Register maintained under the said Section have been so entered.

(b) Where each of such transaction (excluding loans reported under paragraph (iv) above) is in excess of Rs. 5 lakhs in respect of any party, having regard to the explanations that some of the services availed are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

(vii) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956 and the'' Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

(viii)ln our opinion, the internal audit functions carried out during the year by an external agency appointed by the Management have been commensurate with the size of the Company and the nature of its business.

(ix)We have broadly reviewed the cost records maintained by the Company pursuant to the

Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

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

(a) The Company has generally been regular in depositing undisputed dues, including Provident Fund, Employee''s State Insurance, Investor Education and Protection Fund, Income-Tax, Sales Tax, VAT, Service Tax, Customs Duty, Excise Duty, Wealth Tax, Cess and other material statutory dues applicable to it with the appropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employee''s State Insurance, Investor Education and Protection Fund, Income-Tax, Sales Tax, VAT, Service Tax, Customs Duty, Excise Duty, Wealth Tax, Cess and other material statutory dues in arrears as at March 31,2013 for a period of more than six months from the date they became payable.

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

(xii) In our opinion and according to the information and explanations given to us, the term loans have been applied by the Company during the year for the purposes for which they were obtained, other than temporary deployment pending application.

(xiii) In our opinion and according to the information and explanations given to us, and on an overall examination of the Balance Sheet, we report that funds raised on short-term basis have, prima facie, not been used during the year for long term investment.

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm Registration No. 008072S)

Geetha Suryanarayanan

Chennai Partner

May 22,2013 Membership No. 29519


Mar 31, 2012

1. We have audited the attached Balance Sheet of Rane (Madras) Limited (the 'Company') as at March 31, 2012 , and the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956' of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. We draw your attention to the accounting treatment followed by the Company in respect of External Commercial Borrowings (the "ECBs") and swap contracts which in our view is not in compliance with the following Accounting Standards:

(a) Accounting Standard (AS) 11 - "The Effect of Changes in Foreign Exchange Rates"- in view of non restatement of certain foreign currency ECBs as at year end, which were availed for purchase of depreciable fixed assets; and consequent non adjustment of the resultant foreign exchange loss of Rs.5.03 crores to the carrying amount of related depreciable fixed asset; and

(b) Accounting Standard (AS) 30 - "Financial Instruments: Recognition and Measurement' - in view of non-recognition of mark-to-market gain of Rs. 4.49 crores on swap contracts outstanding at the yearend in the Statement of Profit and Loss.

In view of the above, Fixed assets/ Long- term borrowings as at March 31, 2012 is understated by Rs. 5.03 crores and Other income/ Profit for the year ended March 31, 2012 and Reserves and Surplus as at March 31, 2012 is lower by Rs. 4.49 crores.

5. 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, except for the effects of the matters referred to in paragraph 4 above, 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, except for the effects of the matters referred to in paragraph 4(a) above, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply, in all material respects, with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

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

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and except for the effects of the matters referred to in paragraph 4 above, give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion, and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, 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) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act other than interest free unsecured loan of Rs 0.25 crores to a party during the year. The maximum amount involved during the year and the year end balance (including Rs 0.50 crores granted in previous year) of such loan is Rs 0.75 crores. In our opinion, the terms and conditions of such loan is not prima facie prejudicial to the interest of the Company and no amount has fallen due till the balance sheet date.

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

4. 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 for the purchase of inventory and fixed assets and for the sale of goods. The Company has not sold any services during the year. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, no major weakness have been noticed or reported.

5. (a) In our opinion, and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year, there are no comparable market prices as the related goods/ services are considered to be of special nature considering the business requirements/ situations, as explained by the management of the Company.

6. In our opinion, and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the 'Companies (Acceptance of Deposits) Rules, 1975' with regard to the deposits accepted from the public. According to the information and explanations given to us, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub- section (1) of Section 209 of the Act, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, sales tax, wealth tax, service tax, customs duty, excise duty and other material statutory dues, as applicable, with the appropriate authorities and is generally regular in respect of undisputed Income tax though there has been slight delay in few cases.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, sales tax, wealth tax, service tax, customs duty and excise duty as at March 31, 2012 which have not been deposited on account of a dispute (there being no such cases with regard to sales tax, wealth tax and customs duty) are as follows:

Amount Year to which the Forum where the the dispute Name of the statute Nature of dues (Rs. Crores) amount relates is pending

Central Excise Act, 1944 Excise Duty 0.06 2006-07 Customs, Excise and Service Tax Appellate Tribunal

Central Excise Act, 1944 Service Tax 0.17 2005-07 Customs, Excise and Service Tax Appellate Tribunal

Income Tax Act, 1961 Income Tax 0.31 1996-97 Supreme Court

Income Tax Act, 1961 Income tax 4.03 2006-07 Commissioner of Income tax

Income Tax Act, 1961 Income tax 6.52 2007-08 Commissioner of Income tax

Income Tax Act, 1961 Income tax 3.62 2008-09 Commissioner of Income tax

10. The Company has no accumulated losses as at March 31, 2012 and it has not incurred cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders, as applicable, as at the balance sheet date.

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

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

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

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

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion, and according to the information and explanations given to us, there are no funds raised on a short- term basis which have 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 Act during the year.

19. The Company has not issued any debentures during the year; and does not have any debentures outstanding as at the year end.

20. The Company has not raised any money by public issues during the year.

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

For Price Waterhouse & Co

Firm Registration Number 007567S

Chartered Accountants

(Pinaki Chowdhury)

Chennai Partner

May 22, 2012 Membership Number 057572


Mar 31, 2011

1. We have audited the attached Balance Sheet of Rane (Madras) Limited (the "Company") as at March 31,2011, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub- section (4A) of Section 227 of The Companies Act, 1956' of India (the Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the 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, in all material respects, with the accounting standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representations received from the directors, as on March 31, 2011 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Act;

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act, and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

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

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

ANNEXURE TO AUDITORS' REPORT

Referred to in paragraph 3 of the Auditors' Report of even date to the members of Rane (Madras) Limited on the financial statements for the year ended March 31,2011

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies between the book records and the physical inventory have been noticed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory (excluding stocks with third

parties) has been physically verified by the Management during the year. In respect of inventory lying with third parties, these have substantially been confirmed by them. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, 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) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records aggregating Rs 13,785 thousands (physical inventory lower than books) were material, which have been properly dealt with in the books of account.

3. (a) The Company has not granted any loans secured / unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act other than interest free unsecured loan of Rs. 5,000 thousands to a party during the year. The maximum amount involved during the year and the year-end balance of such loan is Rs.5,000 thousands. In our opinion, the terms and conditions of such loan is not prima facie prejudicial to the interest of the Company and no amount has fallen due till the balance sheet date.

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

4. In our opinion and according to the information and explanations given to us and having regard to the explanation that certain items purchased / sold are of special nature for which there are no comparable market price / quotation , 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, fixed assets and for the sale of goods. The Company has not sold any service during the year. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements and exceeding the value of Rupees Five Lakhs in respect of any party during the year, there are no comparable market prices as the related goods / services are considered to be of special nature as explained by the management of the Company.

6. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (1) of Section 209 of the Act, and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities and generally regular in respect of income tax.

(b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income-tax, sales-tax, wealth-tax, service- tax, customs duty, excise duty and cess as at March 31, 2011 which have not been deposited on account of a dispute (there being no such cases with regard to sales-tax, wealth- tax,customs duty, and cess), are as follows:

Name of Nature of Amount Year to which Forum where the statute dues (Rs. Thou the amount re dispute is pend sands) lates ing

Central Excise Act, Excise 575 2006-07 Customs, Excise 1944 Duty and Service Tax Appellate Tribunal

Central Excise Act, Service 1,682 2005-07 Customs, Excise 1944 Tax and Service Tax Appellate Tribunal

Income Tax Act, Income 3,050 1996-97 Supreme Court 1961 Tax

Income Tax Act, Income 40,313 2006-07 Commissioner of 1961 tax Income tax

Income Tax Act, Income 75,172 2007-08 Commissioner of 1961 Income tax

10. The Company has no accumulated losses as at March 31, 2011 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, the Company has not defaulted in repayment of dues to any financial institution or bank or debenture holders, as applicable, as at the balance sheet date.

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

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

14. In our opinion, the Company is not a dealer or trader in shares, securities, debentures and other investments.

15. In our opinion and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

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

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short- term basis which have 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 Act during the year.

19. The Company has not issued any debenture during the year and no amount is outstanding in respect of debenture as on the Balance Sheet date.

20. The Company has not raised any money by public issues during the year.

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

For Price Waterhouse & Co Firm Registration Number 007567S Chartered Accountants (Pinaki Chowdhury) Partner Membership Number 057572

Chennai May 20,2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of RANE (MADRAS) LIMITED as at March 31, 2010 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date, which we have signed under reference to this report. 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 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 (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004, issued by the Government of India in terms of Section 227(4A) of the Companies Act, 1956 of India ( the Act ) and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we set out in the Annexure 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 have been prepared in all material respects in compliance with the applicable accounting standards referred to in Section 211 (3C) of the Act.

(e) On the basis of written representations received from the directors and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of Section 274 (1 )(g) of the Act.

(f) in our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give in the prescribed manner the information required by the Act and also give a true and fair view in conformity with the accounting principles generally accepted in India :

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

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 3 of our report of even date to the members of RANE (MADRAS) LIMITED on the financial statements for the year ended March 31, 2010)

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

(b) The fixed assets of the Company are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which we consider reasonable. Pursuant to the programme, a physical verification was carried out during the year and this revealed no material discrepancies.

(c) No substantial part of fixed assets of the Company has been disposed of during the year.

(ii) (a) The inventories of the Company at all its locations have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. In respect of inventories lying with third parties at overseas locations confirmation has been obtained from the consignment agents.

(b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The Company has maintained proper records in respect of all categories of inventories and the discrepancies between the physical inventories and the book records, which were not material, have been properly dealt with in the books of account.

(iii) (a) The Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 301 of the Act.

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

(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 purchase of inventories and fixed assets and for the sale of goods. We have not observed any major weaknesses in the aforesaid internal control system during the course of our audit.

(v) (a) In our opinion, the particulars of contracts or arrangements referred to in Section 301 of the Act have been entered in the register required to be maintained under that Section.

(b) With regard to transactions made in pursuance of such contracts or arrangements there are no comparable market prices as the related goods are considered to be of special nature as explained by the management of the Company.

(vi) In our opinion, the Company has complied with the provisions of Sections 58A and 58AA of the Act and the rules framed thereunder with regard to the deposits accepted from public and no Order under the aforesaid Sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company.

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

(viii) On the basis of the records produced, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Government of India under Section 209(1 )(d) of the Act have been maintained. However, we are not required to and have not carried out any detailed examination of such accounts and records.

(ix) (a) The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax,

Value Added Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues as applicable with the appropriate authorities in India.

(b) According to the records produced, at the end of the financial year there were no dues of Sales Tax, Value Added Tax, Income Tax, Customs Duty, Wealth Tax, Service Tax, Excise Duty and Cess which have not been deposited on account of any dispute except as set out below:

Name of the Nature of Amount Forum where Statute the dues Rs. dispute is Thousands pending

Central Excise, 575 Customs Excise Excise Act, Interest and and Service Tax 1944 Penalty Tribunal

Central Service Tax 1,682 Customs Excise Excise Act, and Service Tax 1944 Tribunal

Income Tax Income Tax 3,050 Supreme Court Act, 1961

Income Tax Income Tax 40,313 Commissioner Act, 1961 of Income Tax Appeals

(x) The Company has no accumulated losses as at March 31, 2010 and it has not incurred any cash losses during the financial year ended on that date or in the immediately preceding financial year.

(xi) According to the records produced, the Company has not defaulted in repayment of its dues to any financial institution or bank as at the balance sheet date.

(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.

(xiii) The Company has not given any guarantee for loans taken by others from banks or financial institutions during the year.

(xiv) On the basis of review of utilisation of funds on an overall basis, in our opinion, the term loans taken by the Company were applied for the purposes for which the loans were obtained.

(xv) On the basis of review of utilisation of funds on an overall basis, in our opinion, the funds raised on short term basis have not been used for long term investment.

(xvi) The Company has not made any preferential allotment of shares during the year to parties and companies covered in the register maintained under Section 301 of the Act.

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

(xviii) During the course of our examination of the books of account carried out in accordance with the generally accepted auditing practices in India, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the management.

(xix) Clauses (xiii), (xiv), and (xx) of the aforesaid Order are not applicable to the Company.

For Price Waterhouse & Co., Firm Registration No.: 007567S Chartered Accountants

S Datta Chennai Partner May 20, 2010 (Membership No.F14128)



 
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