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Auditor Report of Samkrg Pistons & Rings Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of SAMKRG PISTONS AND RINGS LIMITED ("The company") [and in which are incorporated the Branch at VISAKHAPATNAM.], 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 are responsible for the matters stated in section 134(5) of the companies Act, 2013 ("The Act") with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the company in accordance with the accounting principles generally accepted in India, including the Accounting standards specified under section 133 of the Act, read with Rule 7 of the companies (Accounting ) 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 judgment 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 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 financial statements.

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, and its profit and loss and its cash flows for year ended on that date.

Emphasis of Matters

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

a) Note 2-contingent liabilities- to the financial statements which, describes the pending uncertainty related to the outcome of the appeal filed with ADC(CT) WITH REGARDS TO THE ENTRY TAX BY the company .

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

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

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

b. In our opinion, proper books of accounts as required by law have been kept by the company so far as it appears from our examination of those books at Head office and at Branch at Visakapatnam.

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 accounts maintained at head office and at Branch at Visakapatnam.

d. in our opinion, the aforesaid financial statements comply with accounting standards specified under section 133 of the Act, with Rule 7 the companies (accounting ) Rules , 2014.

e. on the basis of the written representation 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 directors in terms of section 164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, to our separate report in "Annexure A".

g. With respect to the matters to be included in the auditor's reporting in accordance with Rule 11 of the companies (Audit AND Auditors ) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :

i. The company has disclosed the impact of pending litigation on its financial position in its financial statements -Refer Note 2- contingent liabilities to the financial statements;

ii. There has been delay of three months in transferring amounts, required to be transferred, to the investor Education and protection fund by the company. REFER NOTE -10 to the financial statements.

ANNEXURE TO AUDITORS REPORT (AS PER CARO 2015) (STATEMENT REFERRED TO IN PARAGRAPH 1N OF REPORT OF EVEN DATE) IN RESPECT OF ITS FIXED ASSETS

1. (a) The company has maintained proper records showing the full particulars quantitative details And situation of fixed assets.

(b) The company has program for phased physical verification of all its fixed assets which in our opinion is reasonable having regard to the size of the company and the nature of its assets. As informed, no material discrepancies were noticed on such verification.

IN RESPECT OF ITS INVENTORIES

2. (a) The management has conducted physical verification of the finished goods at reasonable intervals.

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

(c) on the physical verification of stock as compared to book records no material discrepancies were noticed. The company is maintaining proper records of inventory.

(d) on the basis of our examination of stock, we are satisfied that the valuation of stock is fair and in accordance with normally accepted accounting principles.

IN RESPECT OF THE LOANS SECURED OR UNSECURED GRANTED OR TAKEN BY THE COMPANY TO/FROM COMAPANIES, FIRMS OR OTHER PARTIES IN THE REGISTER MAINTAINED SEC 301 OF THE COMPANIES ACT.

3. According to the information and explanations given to us, The company had repaid all the unsecured loans taken from the directors and their relatives.

INTERNAL CONTROL SYSTEM

4. In our opinion and according to the information and explanation of given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business with regards to purchases of stores, spares parts including components, plants and machinery, equipment and other assets and for sale of the goods.

5. We have broadly reviewed the books of accounting to materials, labour and other item of cost maintained by the company pursuant to the rules made by the central Government for the maintenance of the cost records under section 148 (1) of the companies Act, 2013 and are of the opinion that, prime facie, the prescribed records and accounts have been maintained by the company. we have, however , not made a detailed examination of the records with a view to determine whether they are accurate and complete.

6. (a) The provident fund and employees state insurance dues have been regularly deposited with the appropriate authorities.

(b) According to the information and explanation given to us the company does not have undisputed amount payable in respect of income Tax, wealth Tax , Excise Duty and customs Duty outstanding for a period more than six month from then date they become payable. In respect of sales Tax (Entry Tax) there is disputed amount of 22.47 lacs not deposited with sales Tax department. The company had filed an appeal with ADC (CT) PUNJAGUTTA DIVISION HYDERABAD AGAINST CERTAIN points in the order of the of the assessment year 2002-03.

Sl. NAME OF THE NATURE OF AMOUNT IN FORUM WHERE DISPUTE NO STATUE DUES LACS IS PENDING

1 SALES TAX ACT ENTRY TAX 22.47 ADC(CT)

In this regard please refer to the point 2-CONTINGENT LIABILITIES. to the other information to the NOTES TO THE ACCOUNTS. We are of the opinion that as and when the demand is raised after hearing of the case, the same will be accounted and settled since the period of the case is beyond the stipulated period.

There has been delay of three months in transferring amounts, required to be transferred, to the investor Education and protection fund by the company. REFER NOTE -10 to the financial statements

7. The company has no accumulated losses at the end of the financial year and, has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

8. In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institution /banks. The company has not issued any debentures.

9. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

10. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of the Audit.

For M/s.RAVI & KESHAV

REG NO:003187S Chartered Accountants

(K.K. KESAVAN)

Place : Hyderabad Proprietor

Date : 25-05-2015 M NO 17489




Mar 31, 2013

We have audited the attached FORM OF Balance Sheet of SAMKRG PISTONS AND RINGS LTD as at 31st March, 2013 and FORM OF STATEMENT OF Profit and Loss Account for the year ended as on that date annexed thereto and the cash flow statement for the period ended on that date. This financial statements are the responsibility of the company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

1. As required by the Companies (Auditors Report) order 2003 issued by the central government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956 and on the basis of the such checks of books and records of the company as we considered appropriate and according to information and explanations given to us during the course of the audit, We annex hereto a statement on that matter specified in paragraph 4 and 5 of the said order to the extent applicable.

2. Further to our comments in the statement referred to in paragraph (1) above.

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

B. In our opinion, the Company has kept proper books of accounts as required by law so far as appears from the examination of books.

C. The Balance Sheet and Profit and Loss Account referred to in the Report are in agreement with the books of accounts.

D. In our opinion the Balance sheet and the Profit and Loss account dealt with by this Report comply with the mandatory accounting standards referred to in subsection (3-C) of section 211 of the Companies Act 1956.

E. On the basis of the written representation received from the Directors, as on 31st March 2013 and taken on record by the Board of Directors, We report that none of the directors are disqualified as on 31st March 2013 from being appointed as director under clause (g) of sub-section (1) of section 274 of companies Act 1956.

F. In our opinion and to the best of our information and according to the explanation given to us, the accounts read together with other notes annexed to and forming part of the accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view.

i) In so far as it relates to the FORM OF Balance Sheet of the state of affairs of the Company as at 31st March 2013 and

ii) In so far as it relates to the FORM OF STATEMENT OF Profit and Loss Account of the Profit of the Company, for year ended as on that date.

iii) In the case of the cash flow statement of the cash flow for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

(statement referred to in paragraph 1 of our report of Even Date)

IN RESPECT OF ITS FIXED ASSETS

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

(b) The Company has programme for phased physical verification of all its fixed assets which in our opinion, is reasonable having regard to the size of the company and the nature if its assets. As informed, no material discrepancies were noticed on such verification.

(c) The company has not disposed off any substantial part if its fixed assets during the year.

IN RESPECT OF ITS INVENTORIES

2. (a) The Management has conducted physical verification of the finished goods at reasonable intervals.

(b) The procedure of physical verification of stocks followed by the Management are considered reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the physical verification of stocks as compared to book records no material discrepancies were noticed. The company is maintaining proper records of inventory.

(d) On the basis of our examination of stocks, we are satisfied that the valuation of stocks is fair and in accordance with normally accepted accounting principles.

(e) The imported goods were valued at the invoice value. The exchange rate variation if any at the end of the year were not considered since the impact on the profit or loss is insignificant.

IN RESPECT OF THE LOANS SECURED OR UNSECURED GRANTED OR TAKEN BY THE COMPNY TO/FROM COMPANIES, FIRMS OR OTHER PARTIES COVERED IN THE REGISTER MAINTAINED UNDER SEC 301 OF THE COMPANIES ACT.

3. (a) According to the information and explanations given to us, the Company has taken unsecured loans from the Directors and their relatives as listed in the register maintained under Section 301 of the companies act 1956. In terms of subsection (6) of section 370 of the companies act 1956 provision of this section is not applicable to the company.

(b) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to Companies, Firms or other parties listed in the register maintained under Section 301 of the companies act 1956 In terms of subsection (6) of section 370 of the companies act 1956 provision of this section is not applicable to the company.

(c) The rates of interest and other terms and conditions of loans taken by the company are unsecured and are prima facie not prejudicial to the interest of the company.

(d) The payment of the principal and interest are regular.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regards to purchases of stores, spare parts including components, plant and machinery, equipment and other assets and for the sale of the goods.

5. (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangement referred to in section 301 of the act that need to be entered into the register maintained under section 301 have been so entered

(b) In our opinion and according to the information and explanation given to us the transactions made in pursuance of such contracts or arrangement exceeding value of Rs. 5 (five) lacs have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. As explained to us, there are no unserviceable or damaged stores and there are no unserviceable or damaged raw materials or finished goods.

7. The Company has not accepted any deposits from public. Hence, the provisions of Section 58A of the Companies Act, 1956, will not be applicable.

8. In our opinion, reasonable records have been maintained by the Company for the sales and disposal of realizable scrap.

9. In our opinion the company has internal audit system commensurate with the size of the Company and the nature of its business.

10. We have broadly reviewed the books of account relating to materials, labor and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of the cost records under Section 209(i)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records and accounts have been maintained by the Company. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and complete.

11. (a) The Provident Fund and Employees State Insurance dues have regularly deposited with the appropriate authorities.

(b) According to the information and explanation given to us the Company does not have undisputed amounts payable in respect of Income Tax ,Wealth Tax, Excise Duty and Customs Duty outstanding for a period of more than six months from the date they become payable.

In respect of Sale Tax (Entry Tax) there is disputed amount of Rs. 22.47 lacs not deposited with Sales Tax department. The company had filed an appeal with ADC (CT) PUNJAGUTTA DIVISION HYDERABAD against certain points in the order of the for the assessment year 2002.03

S. No Name of Nature of Amount In Forum Where The Statue Dues Rs. In Lacs Dispute Is Pending

1 SALES ENTRY 22. 47 ADC (CT)

TAX ACT TAX

12. During the year under report , the company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under Section 301 of the Companies act 1956.

13. The company has no accumulated losses at the end of the financial year and, has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

14. In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institutions/banks. The company has not issued any debentures.

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

16. In our opmwn the company is not chit fund or Nidhi/Mutual fund/ Society. Therefore the provisions of clause 4(XIII) of the companies (Auditor''s Report) order 2003 are not applicable to the company.

17. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

18. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, We report that no funds raised on short term basis have been used for long term investment.

19. The company has not raised any money by way of public issue during the year.

20. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of the Audit.



For M/S. Ravi & Keshav

Registration No. : 003187S

Chartered Accountants



Place :Hyderabad (K.K. KESAVAN)

Date :16.05.2013 Propritor

M.No. : 017489


Mar 31, 2012

We have audited the attached FORM OF Balance Sheet of SAMKRG PISTONS AND RINGS LIMITED as at 31st March, 2012 and FORM OF STATEMENT OF Profit and Loss Account for the year ended as on that date annexed thereto and the cash flow statement for the period ended on that date. This financial statements are the responsibility of the company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

Further we report as follows :

1. As required by the Companies (Auditors Report) Order 2003 issued by the central government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956 and on the basis of the such checks of books and records of the company as we considered appropriate and according to information and explanations given to us during the course of the audit, We annex hereto a statement on that matter specified in paragraph 4 and 5 of the said order to the extent applicable.

2. Further to our comments in the statement referred to in paragraph (1) above.

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

B. In our opinion, the Company has kept proper books of accounts as required by law so far as appears from the examination of books.

C. The Balance Sheet and Profit and Loss Account referred to in the Report are in agreement with the books of accounts.

D. In our opinion the Balance Sheet and the Profit and Loss account dealt with by this Report comply with the mandatory Accounting Standards referred to in subsection (3-C) of section 211 of the Companies Act 1956.

E. On the basis of the written representation received from the Directors, as on 31st March 2012 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2012 from being appointed as director under clause (g) of sub-section (1) of section 274 of companies act 1956,

F. In our opinion and to the best of our information and according to the explanation given to us, the accounts read together with other notes annexed to and forming part of the accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view.

i) In so far as it relates to the FORM OF Balance Sheet of the state of affairs of the Company as at 31 st March 2012 and

ii) In so far as it relates to the FORM OF STATEMENT OF Profit and Loss Account of the Profit of the Company, for year ended as on that date.

iii) In the case of the cash flow statement of the cash flow for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

(statement referred to in paragraph 1 of our report of Even Date)

IN RESPECT OF ITS FIXED ASSETS

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

(b) The Company has programe for phased physical verification of all its fixed assets which in our opinion, is reasonable having regard to the size of the Company and the nature if its assets. As informed, no material discrepancies were noticed on such verification.

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

IN RESPECT OF ITS INVENTORIES

2. (a) The Management has conducted physical verification of the finished goods at reasonable intervals.

(b) The Procedure of physical verification of stocks followed by the Management are considered reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the physical verification of stocks as compared to book records no material discrepancies were noticed. The company is maintaining proper records of inventory.

(d) On the basis of our examination of stocks, we are satisfied that the valuation of stocks is fair and in accordance with normally accepted accounting principles.

(e) The imported goods were valued at the invoice value. The exchange rate variation if any at the end of the year were not considered since the impact on the profit or loss is insignificant.

IN RESPECT OF THE LOANS SECURED OR UNSECURED GRANTED OR TAKEN BY THE COMPANY TO/ FROM COMPANIES, FIRMS OR OTHER PARTIES COVERED IN THE REGISTER MAINTAINED UNDER SEC 301 OF THE COMPANIES ACT.

3. (a) According to the information and explanations given to us, the Company has taken unsecured loans from the Directors and their relatives as listed in the register maintained under Section 301 of the companies act 1956. In terms of subsection (6) of section 370 of the companies act 1956 provision of this section is not applicable to the company.

(b) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, Firms or other parties listed in the register maintained under Section 301 of the Companies Act 1956 In terms of subsection (6) of section 370 of the companies act 1956 provision of this section is not applicable to the company.

(c) The rates of interest and other terms and conditions of loans taken by the company are unsecured and are prima facie not prejudicial to the interest of the company.

(d) The payment of the principal and interest are reqular.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regards to purchases of stores, spare parts including components, plant and machinery, equipment and other assets and for the sale of the goods.

5. (a) According to the information and explanations provided by the managaement, we are of the opinion that the particulars of contracts or arrangement referred to in section 301 of the act that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanation given to us the transactions made in pursuance of such contracts or arrangement exceeding value of Rs.5,00,000 have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. As explained to us, there are no unserviceable or damaged stores and there are no unserviceable or damaged raw materials or finished goods.

7. The Company has not accepted any deposits from public. Hence, the provisions of Section 58A of the companies Act, 1956, will not be applicable.

8. In our opinion reasonable records have been maintained by the Company for the sales and disposal of realizable scrap.

9. In our opinion the company has internal audit system commensurate with the size of the company and the nature of its business.

10. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of the cost records under Section 209 (i) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records and accounts have been maintained by the Company. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and complete.

11. (a) The Provident Fund and Employees State Insurance dues have regularly deposited with the appropriate authorities.

(b) According to the information and explanation given to us the company does not have undisputed amounts payable in respect of Income Tax, Wealth Tax, Excise Duty and Customs Duty outstanding for a period of more than six months from the date they become payable.

In respect of Sale Tax (Entry Tax) there is disputed amount of Rs. 22.47 lacs not deposited with Sales Tax department. The Company had filed an appeal with ADC(CT) PUNJAGUTTA DIVISION HYDERABAD against certain points in the order of the for the assessment year 2002-03.

S. No Name Of Nature Of Amount In Forum Where Of The Statue Dues Rs. In Lacs Dispute Is Pending

1 SALES ENTRY 22.47 ADC (CT) TAX ACT TAX

12. During the year under report, the company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under Section 301 of the companies Act, 1956.

13. The company has no accumulated losses at the end of the financial year and, has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

14. In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institutions/ banks. The company has not issued any debentures.

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

16. In our opinion of the company is not chit fund or Nidhi/Mutual fund/society. Therefore the provisions of Clause 4(XIII) of the companies (Auditor's Report) order 2003 are not applicable to the company.

17. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

18. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, We report that no funds raised on short term basis have been used for long term investment.

19. The company has not raised any money by way of public issue during the year.

20. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported durign the course of the Audit.

For M/S. Ravi & Keshav

Registration No. : 003187S

Chartered Accountants

Place : Hyderabad (K.K. KESAVAN)

Date : 26h May 2012 Propritor

M.No 17489


Mar 31, 2011

We have audited the attached Balance Sheet of SAMKRG PISTONS AND RINGS LIMITED as at 31st March, 2011 and the Profit and Loss Account for the year ended as on that date annexed thereto and the cash flow statement for the period ended on that date. This financial statements are the responsibility of the company's Management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial Statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. Further we report as follows :

1. As required by the Companies (Auditors Report) Order 2003 issued by the central government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956 and on the basis of the such checks of books and records of the company as we considered appropriate and according to information and explanations given to us during the course of the audit, we annex hereto a statement on that matter specified in paragraph 4 and 5 of the said order to the extent applicable.

2. Further to our comments in the statement referred to in paragraph (1) above.

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

B. In our opinion, the Company has kept proper books of accounts as required by law so far as appears from the examination of books.

C. The Balance Sheet and Profit and Loss Account referred to in the Report are in agreement with the books of accounts.

D. In our opinion the Balance Sheet and the Profit and Loss account dealt with by this Report comply with the mandatory Accounting standards referred to in subsection (3-C) of section 211 of the Companies Act 1956.

E. On the basis of the written representation received from the Directors, as on 31st March 2011 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2011 from being appointed as director under clause (g) of sub-section (1) of section 274 of companies act 1956,

F. In our opinion and to the best of our information and according to the explanation given to us, the accounts read together with other notes annexed to and forming part of the accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view.

i) In so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31 st March 2011 and

ii) In so far as it relates to the Profit and Loss Account of the Profit of the Company, for year ended as on that date.

iii) In the case of the cash flow statement of the cash flow for the year ended on that date.

ANNEXURE TO AUDITORS REPORT (statement referred to in paragraph 1 of our report of even date)

IN RESPECT OF ITS FIXED ASSETS

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

(b) The Company has program for phased physical verification of all its fixed assets which in our opinion, is reasonable having regard to the size of the Company and the nature if its assets. As informed, no material discrepancies were noticed on such verification.

(c) The Company has not disposed off any substantial part if its fixed assets during the year. IN RESPECT OF ITS INVENTORIES

2. (a) The Management has conducted physical verification of the finished goods at reasonable intervals.

(b) The Procedure of physical verification of stocks followed by the Management are considered reasonable and adequate in relation to the size of the company and the nature of its business.

(c) On the physical verification of stocks as compared to book records no material discrepancies were noticed. The company is maintaining proper records of inventory.

(d) On the basis of our examination of stocks, we are satisfied that the valuation of stocks is fair and in accordance with normally accepted accounting principles.

(e) The imported goods were valued at the invoice value. The exchange rate variation if any at the end of the year were not considered since the impact on the profit or loss is insignificant.

IN RESPECT OF THE LOANS SECURED OR UNSECURED GRANTED OR TAKEN BY THE COMPANY TO/ FROM COMPANIES, FIRMS OR OTHER PARTIES COVERED IN THE REGISTER MAINTAINED UNDER SEC 301 OF THE COMPANIES ACT.

3. (a) According to the information and explanations given to us, the Company has taken unsecured loans from the Directors and their relatives as listed in the register maintained under Section 301 of the companies act 1956. In terms of subsection (6) of section 370 of the companies act 1956 provision of this section is not applicable to the company.

(b) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, Firms or other parties listed in the register maintained under Section 301 of the companies act 1956 In terms of subsection (6) of section 370 of the companies act 1956 provision of this section is not applicable to the company.

(c) The rates of interest and other terms and conditions of loans taken by the company are unsecured and are prima facie not prejudicial to the interest of the company.

(d) The payment of the principal and interest are regular.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regards to purchases of stores, spare parts including components, plant and machinery, equipment and other assets and for the sale of the goods. '

5. (a) According to the information and explanations provided by the managaement, we are of the opinion that the particulars of contracts or arrangement referred to in section 301 of the act that need to be entered into the register maintained under section 301 have been so entered.

(b) in our opinion and according to the information and explanation given to us the transactions made in pursuance of such contracts or arrangement exceeding value of Rs.5,00,000 have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. As explained to us, there are no unserviceable or damaged stores and there are no unserviceable or damaged raw materials or finished goods.

7. The Company has not accepted any deposits from public. Hence, the provisions of Section 58A of the companies Act, 1956, will not be applicable

8. In our opinion reasonable records have been maintained by the Company for the sales and disposal of realizable scrap.

9. In our opinion the company has internal audit system commensurate with the size of the company and the nature of its business.

10. We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of the cost records under Section 209 (i) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records and accounts have been maintained by the Company. We have, however, not made a detailed examination of the records with a view to determine whether they are accurate and complete.

11. (a) The Provident fund and Employees State Insurance dues have regularly deposited with the appropriate authorities.

(b) According to the information and explanation given to us the company does not have undisputed amounts payable in respect of Income Tax, wealth Tax, Excise Duty and Customs Duty outstanding for a period of more than six months from the date they become payable.

In respect of Sale Tax (Entry Tax) there is disputed amount of Rs. 22.47 lacs not deposited with Sales Tax department. The Company had filed an appeal with ADC(CT) Punjagutta Division Hyderabad against certain points in the order of the for the assessment year 2002-03.

S. Name of the Name of Amount in Forum Where No. Statue the dues Rs. in Lacs Despute is Pending

1 SALES ENTRY 22.47 ADC (CT) TAX ACT TAX

12. During the year under report, the company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under Section 301 of the companies Act 1956.

13. the company has no accumulated losses at the end of the financial year and, has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

14. In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institutions/ banks. The company has not issued any debentures.

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

16. In our opinion of the company is not chit fund or Nidhi/Mutual fund/society. Therefore the provisions of Clause 4(XIII) of the companies (Auditor's report) order 2003 are not applicable to the company.

17. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

18. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment.

19. The company has not raised any money by way of public issue during the year.

20. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported durign the course of the Audit.

For M/S. Ravi & Keshav Chartered Accountants Firm Registration No. : 003187S

(K.K. KESAVAN) Partner M.No 17489

Place: Hyderabad Date : 16th May 2011




Mar 31, 2010

We have audited the attached Balance Sheet of SAMKRG PISTONS AND RINGS LIMITED as at 31st March, 2010 and the Profit and Loss Account for the year ended as on that date annexed thereto and the cash flow statement for the period ended on that date. This financial statements are the responsibility of the companys Management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about Whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial Statements. An audit also includes assessing the accounting principles used and significant Estimates made by management, as well as evaluating the overall financial statement Presentation. We believe that our audit provides a reasonable basis for our opinion. Further we report as follows :

1. As required by the Companies (Auditors Report) Order 2003 issued by the central government of India in terms of subsection (4A) of section 227 of the Companies Act, 1956 and on the basis of the such checks of books and records of the company as we considered appropriate and according to information and explanations given to us during the course of the audit, we annex hereto a statement on that matter specified in paragraph 4 and 5 of the said order to the extent applicable.

2. Further to our comments in the statement referred to in paragraph (1) above.

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

B. In our opinion, the Company has kept proper books of accounts as required by law so far as appears from the examination of books.

C. The Balance Sheet and Profit and Loss Account referred to in the Report are in agreement with the books of accounts.

D. In our opinion the Balance Sheet and the Profit and Loss account dealt with by this Report comply with the mandatory Accounting standards referred to in subsection (3-C) of section 211 of the Companies Act 1956.

E. On the basis of the written representation received from the Directors, as on 31st March 2010 and taken on record by the Board of Directors, we report that none of the directors are disqualified as on 31st March 2010 from being appointed as director under clause (g) of sub-section (1) of section 274 of companies act 1956,

F. In our opinion and to the best of our information and according to the explanation given to us, the accounts read together with other notes annexed to and forming part of the accounts give the information required by the Companies Act, 1956 in the manner so required and give a true and fair view.

i) In so far as it relates to the Balance Sheet of the state of affairs of the Company as at 31 st March 2010 and i

i) In so far as it relates to the Profit and Loss Account of the Profit of the Company, for year ended as on that date.

iii) In the case of the cash flow statement of the cash flow for the year ended on that date.

ANNEXURE TO AUDITORS REPORT

(statement referred to in paragraph 1 of our report of even date)

1. (a) The Company has maintained proper records showing the full particulars including quantitative details

and situation of fixed assets.

(b) The Company has program for phased physical verification of all its fixed assets which in our opinion, is reasonable having regard to the size of the Company and the nature if its assets. As informed, no material discrepancies were noticed on such verification.

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

D) The Company had reworked the depreciation since the beginning of the operating of the company ie. 88-89, and found an excess depreciation were charged in the earlier years. The same had been ascertained and credited to the Profit and Loss Account. On account of this the earlier year profits were understated to the extent as declared to the notes to the accounts under the head depreciation. The period represents 1998-99 to 2007-2008.

2. (a) The Management has conducted physical verification of the finished goods at reasonable intervals.

(b) The Procedure of physical verification of stocks followed by the Management are considered reasonable and adequate in relation to the Size of the company and the nature of its business.

(c) On the physical verification of stocks as compared to book records no material discrepancies were noticed. The company is maintaining proper records of inventory.

(d) On the basis of our examination of stocks, we are satisfied that the valuation of stocks is fair and in accordance with normally accepted accounting principles.

(e) The imported goods were valued at the invoice value. The exchange rate variation if any at the end of the year were not considered since the impact on the profit or loss is insignificant.

3. (a) According to the information and explanations given to us, the Company has taken unsecured loans

from the Directors and their relatives as listed in the register maintained under Section 301 of the companies act 1956. In terms of subsection (6) of section 370 of the companies act 1956 provision of this section is not applicable to the company.

(b) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, Firms or other parties listed in the register maintained under Section 301 of the companies act 1956 In terms of subsection (6) of section 370 of the companies act 1956 provision of this section is not applicable to the company.

(c) The rates of interest and other terms and conditions of loans taken by the company are unsecured and are prima facie not prejudicial to the interest of the company.

(d) The payment of the principal and interest are reqular.

4 In our opinion and according to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regards to purchases of stores, spare parts including components, plant and machinery, equipment and other assets and for the sate of the goods.

5 (a) According to the information and explanations provided by the managaement, we are of the opinion

that the particulars of contracts or arrangement referred to in section 301 of the act that need to be entered into the register maintained under section 301 have been so entered.

(b) in our opinion and according to the information and explanation given to us the transactions made in pursuance of such contracts or arrangement exceeding value of Rs.5,00,000 have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6 As explained to us, there are no unserviceable or damaged stores and there are no unserviceable or damaged raw materials or finished goods.

7 The Company has not accepted any deposits from public. Hence, the provisions of Section 58A of the companies Act, 1956, will not be applicable

8 In our opinion reasonable records have been maintained by the Company for the sales and disposal of realizable scrap.

9 In our opinion the company has internal audit system commensurate with the size of the company and the nature of its business.

10 We have broadly reviewed the books of account relating to materials, labour and other items of cost maintained by the company pursuant to the rules made by the Central Government for the maintenance of the cost records under Section 209 (i) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed records and accounts have been maintained by the Company.

11. (a) The Provident fund and Employees State Insurance dues have regularly deposited with the appropriate

authorities. (b) According to the information and explanation given to us the company does not have undisputed amounts payable in respect of Income Tax, wealth Tax, Excise Duty and Customs Duty outstanding for a period of more than six months from the date they become payable.

In respect of Sale Tax (Entry Tax) there is disputed amount of Rs. 22.47 lacs not deposited with Sales Tax department. The Company had filed an appeal with ADC(CT) Punjagutta Division Hyderabad against certain points in the order of the for the assessment year 2002-03.

S.No Name Of Nature Of Amount In Forum Where Of The Statue Dues Rs. In Lacs Despute Is Pending 1 SALES ENTRY 22.47 ADC (CT) TAX ACT TAX

12. During the year under report, the company has not made any preferential allotment of shares to the parties and companies covered in the register maintained under Section 301 of the companies Act 1956.

13. the company has no accumulated losses at the end of the financial year and, has not incurred any cash losses in the financial year under report and in the immediately preceding financial year.

14. In our opinion and according to the information and explanation given to us, the company has not defaulted in repayment of dues to financial institutions/ banks. The company has not issued any debentures.

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

16. In our opinion of the company is not chit fund or Nidhi/ Mutual fund / society. Therefore the provisions of Clause 4(XIII) of the companies (Auditors report) order 2003 are not applicable to the company.

17. According to the information and explanation given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions.

18. According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short term basis have been used for long term investment.

19. The company has not raised any money by way of public issue during the year.

20. According to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the course of the audit.

For M/S. Ravi a Keshav Chartered Accountants Firm Registration No. : 0031875 Place : Hyderabad (K.K. KESAVAN) Date : 14th May 2010 Partner

M.No 17489

 
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