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Auditor Report of Shakti Pumps (India) Ltd.

Mar 31, 2015

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

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the Act') with respect to the preparation and presentation of these standalone financial statements that give 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into accounts 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. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

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

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

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

b. in our opinion proper books of account as required by law have been kept by the company so far as it appears from our examination of those books;

c. the balance sheet, statement of profit and loss, and cash flow statement dealt with by this Report are in agreement with the books of account;

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

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

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

i) the Company does not have any pending litigations which would impact its financial position;

ii) the company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses;

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

Annexure to the Auditor's Report

The Annexure referred to in our Independent Auditors Report to the members of the company on the standalone financial statements for the year ended 31 March 2015, we report that:

1. In respect of its fixed Assets:

a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets in respect of all its locations on the basis of available information.

b) As explained to us, all the fixed Assets have been physically verified during the year by the management in accordance with a regular programme of verification of the fixed assets at reasonable intervals which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such physical verification.

2. In respect of its inventories:

a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year at reasonable interval. 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 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. As explained to us, there were no material discrepancies noticed on physical verification.

3. In respect of loans, secured or unsecured, granted by the company to companies, firms or other parties covered in the register maintained under section 189 of the Act:

a) The company has granted loan to one body corporate covered in the register maintained under section 189 of the Act as follows:

Name of the Max. Amount Balance as on Party Outstanding 31.03.2015 During the Year

Vintex Tools Pvt. Rs.9,53,26,772/- Rs.9,53,26,772/- Ltd

b) In case of loan granted to the body corporate listed in the register maintained under section 189 of the Act, the borrower have been regular in the payment of the interest as stipulated. The terms do not stipulate any repayment schedule and the loans are repayable on demand.

c) There are no overdue amounts of more than rupees one lakh in respect of the loan granted to the body corporate listed in the register maintained under section 189 of the Act.

4. In our opinion and according to the information and explanation 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. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanation 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. In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public during the year. Therefore, the provisions of clause (v) of paragraph 3 of the order is not applicable to the company.

6. We have broadly reviewed the cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2014 prescribed by the Central Government under section 148 of the Act 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.

7. In respect of statutory dues:

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 generally regular in depositing undisputed statutory dues including provident fund, employees' state insurance, Income Tax, VAT, wealth tax, service tax, custom duty, excise duty, cess and any other statutory dues as applicable with the appropriate authorities.

b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of wealth tax, service tax, custom duty and cess which have not been deposited on account of any dispute. The particular of dues of excise duty, sales tax & income tax as at 31st March, 2015 which have not been deposited or partially been deposited on account of a dispute, are as below :

Name of the statue Nature of dues Amount (Rs.In Lakhs)

The Central Excise Excise duty Including 47.70 Act, 1944 Interest and penalty

The Income Tax Act, Income Tax Demand 19.09 1961 including Interest

Income Tax Demand 20.83 including Interest

Income Tax Demand 165.51 including Interest

Income Tax Demand 50.00 including Interest

Income Tax Demand 16.75 including Interest

Commercial Tax VAT and Entry 70.44

Tax demand

VAT and CST demand 6.16



VAT and CST 4.23

Tax demand

VAT, CST and 12.46 Entry Tax demand

Name of the statue Period to which the Forum where the amount relates dispute is pending

The Central Excise FY 2005-06 Appellate Tribunal, New Act, 1944 Delhi

The Income Tax Act, FY 2007-08 CIT - Appeal 1961

FY 2008-09 CIT - Appeal

FY 2009-10 CIT - Appeal

FY 2010-11 CIT - Appeal

FY 2011-12 CIT - Appeal

Commercial Tax FY 2010-11 M.P. High Court, Indore Bench

FY 2010-11 M.P. Commercial Tax Appeal Board, Bhopal

FY 2011-12 Add. Commissioner of Comm. Tax, Indore

FY 2012-13 Appellate Authority, Commercial Tax, Indore

c) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund time to time.

8. The company does not have accumulated losses as at March 31, 2015.The Company has not incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.

9. 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 holder.

10. According to the information and explanation given to us, the company has given guarantee to the tune of Rs.9.62 Crores for loans taken by Shakti Irrigation India Limited from banks during the year for setting up micro irrigation plant.

11. 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 purpose for which they were obtained.

12. 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, no material instance of fraud on or by the company noticed or reported during the year.

For Vinay Gandhi & Associates Chartered Accountants FRN: 014442C

Vinay Gandhi Place: Pithampur (Proprietor) Date: 21.05.2015 M No. 75972






Mar 31, 2014

We have audited the accompanying financial statements of SHAKTI PUMPS (INDIA) LIMITED ("the Company"). These comprise the Balance Sheet as at March 31, 2014, the Statement of Profit and Loss and Cash Flow Statement for the year ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

(a) in the case of the Balance Sheet, the state of affairs of the Company as at March 31, 2014;

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

b. In our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books [and proper returns adequate for the purposes of our audit have been received from branches not visited by us];

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

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

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

Annexure to the Auditor''s Report

Referred to in Paragraph of Report on Other Legal & Regulatory Requirements

1. In respect of its fixed assets:

a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets in respect to all its locations on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified during the year by the management in accordance with a regular programme of verification of the fixed assets at reasonable intervals which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such physical verification.

c) In our opinion and according to the information and explanation given to us, any substantial part of fixed assets has not been disposed of by the company during the year.

2. In respect of its inventories:

a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year at reasonable interval. 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 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. As explained to us, there were no material discrepancies noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the act:

a) The company has granted loan to two parties covered in the register maintained under section 301 of the Act as follows:

Name of the Party Max. Amount Outstanding Balance as on During The Year 31.03.2014

Vintex Tools Pvt. Ltd Rs. 8,32,17,585/- Rs. 8,32,17,585/-

Aquanox Pumps Limited Rs. 9,02,41,213/- Rs. 9,02,41,213/-

b) In our opinion and according to the information and explanation given to us, the rate of interest and other terms & conditions of loan given by the Company, are not prima facie prejudicial to the interest of the company.

c) The Principal amount are repayable over a period of one to three years, while the interest is payable annually at the discretion of the company.

d) In respect of the said loans and interest thereon, there are no overdue amounts.

e) 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. Accordingly, Clauses (iii) (f) and (iii) (g) of the paragraph 4 of the order are not applicable to the company for the current year.

4. In our opinion and according to the information and explanation 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. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanation 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. In respect of the contracts or arrangements referred to in section 301 of the act:

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

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at price which are prima facie reasonable, having regard to prevailing market price at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public during the year. Therefore, the provisions of clause (vi) of paragraph 4 of the order is not applicable to the company.

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 cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section clause (d) of sub section (1) of section 209 of the Act 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.

9. In respect of statutory dues:

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 generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, Income Tax, VAT, wealth tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities in India.

b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of wealth tax, service tax, custom duty and cess which have not been deposited on account of any dispute. The particular of dues of excise duty & income tax as at 31st March 2014 which have not been deposited on account of a dispute, are as follows

Name of the statute Nature of dues Amount Period to which the amount relates

The Central Excise Act, Excise duty Including Rs. 47,70,000 2005-06 1944 Interest and penalty

The Income Tax Act, Income Tax Including Rs. 1,65,51,590 2010-11 1961 Interest & Penalty



Name of the Statue Forum where the dispute is pending

The Central Excise Act, 1944 Appellate Tribunal, New Delhi

The Income Tax Act, 1961 Commissioner (Appeals), Indore

10. The company does not have accumulated losses as at March 31, 2014.The Company has not incurred cash losses during the financial year covered by our audit and 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 holder.

12. In our opinion and based on the information available , no loans and advances have been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of clause (xiii) of paragraph 4 of the order relating to chit fund/ nidhi/mutual benefit fund/society 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. 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 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 purpose 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 explanation given to us, there are no funds raised on short- term basis which have been used for long term investment.

18. According to the information & explanations given to us the company has made preferential allotment of shares warrants to parties covered in the register maintained under section 301 of the Act. In our opinion, the price on which this share warrants have been issued is not prejudicial to the interest of the company.

19. The company has no Outstanding Debenture during the year.

20. The company has not raised any money by way of 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, no material instance of fraud on or by the company noticed or reported during the year.

For Vinay Gandhi & Associates Chartered Accountants

FRN: 014442C

SD/-

Vinay Gandhi (Proprietor)

M No. (75972)

Place: Pithampur Date : 14.05.2014


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility for the Financial Statements Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor''s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

b. in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books [and proper returns adequate for the purposes of our audit have been received from branches not visited by us];

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

d. in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956;

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

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

1. In respect of its fixed Assets:

a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets in respect of all its locations on the basis of available information.

b) As explained to us, all the fixed Assets have been physically verified during the year by the management in accordance with a regular programme of verification of the fixed assets at reasonable intervals which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such physical verification.

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

2. In respect of its inventories:

a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year at reasonable interval. 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 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. As explained to us, there were no material discrepancies noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the Company to/from companies, firms or other parties covered in the register maintained under section 301 of the act:

a) The Company has granted loan to one party covered in the register maintained under section 301 of the Act as follows:

Name of the Party Max. Amount Balance as on

Outstanding 31.03.2013

During The Year Vintex Tools Pvt. Ltd Rs.74928834.75/- Rs.60691783/-Aquanox Pumps Ltd Rs.38286388.00/- Rs.38286388/-b) In our opinion and according to the information and explanation given to us, the rate of interest and other

terms & conditions of loan given by the Company, are not prima facie prejudicial to the interest of the Company.

c) The Principal amount are repayable over a period of one to three years, while the interest is payable annually at the discretion of the Company.

d) In respect of the said loans and interest thereon, there are no overdue amounts.

(e) The Company has not taken any loans, secured or unsecured from companies, firms or

Other Parties covered in the register maintained section 301 of the Act. Accordingly, clauses (iii) (f) and (iii) (g) of the paragraph 4 of the order are not applicable to the Company for the current year.

4. In our opinion and according to the information and explanation 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. Further, on the basis of our examination of the books and records of the Company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanation 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. In respect of the contracts or arrangements referred to in section 301 of the act:

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

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at price which are prima facie reasonable, having regard to prevailing market price at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanation given to us, the Company has not accepted deposits from the public during the year. Therefore, the provisions of clause (vi) of paragraph 4 of the order is not applicable to the Company.

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 cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section clause (d) of sub section (1) of section 209 of the Act 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.

9. In respect of statutory dues:

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 generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, Income Tax, Sales Tax, wealth tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities in India.

b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of wealth tax, service tax, custom duty and cess which have not been deposited on account of any dispute. The particular of dues of excise duty as at 31st March 2013 which have not been deposited on account of a dispute, are as follows

Name of the statue Nature of dues Amount Period to which the Forum where the

amount relates dispute is pending

The Central Excise Excise duty Including 47,70,000 2005-06 Appellate Tribunal,

Act, 1944 Interest and penalty New Delhi

The Income Tax Income Tax Including 1,65,51,590 2010-11 Commissioner (Appeals),

Act, 1961 Interest & Penalty Indore

10. The Company does not have accumulated losses as at March 31, 2013.The Company has not incurred cash losses during the financial year covered by our audit and 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 holder.

12. In our opinion and based on the information available , no loans and advances has been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of clause (xiii) of paragraph 4 of the order relating to chit fund/ nidhi/mutual benefit fund/society 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. 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 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 purpose 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 explanation given to us, there are no funds raised on 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 no Outstanding Debenture during the year.

20. The Company has not raised any money by way of 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, no material instance of fraud on or by the Company noticed or reported during the year.

For Vinay Gandhi & Associates

Chartered Accountants

FRN: 014442C

Vinay Gandhi

Place : Indore (Proprietor)

Date : 29.05.2013 M No. 75972


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/S. SHAKTI PUMPS (INDIA) LIMITED (the company) as on 31st March 2012, the statement of Profit & Loss and the Cash Flow Statement of the company for the year ended on that date annexed there to. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes accessing 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 issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 ( the act ), we give in the annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

e) On the basis of written representation received from the directors of the company, as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms clause (g) of sub section (1) of section 274 of the Act.

5. In our opinion and to the best of our information and according to the explanation given to us, the said financial statements together with the significant accounting policies and notes thereon 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 Balance Sheet of the state of affairs of the company as at 31st March, 2012 ;

ii. in the case of 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. In respect of its fixed Assets

a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets in respect of all its locations on the basis of available information.

b) As explained to us, all the fixed Assets have been physically verified during the year by the management in accordance with a regular programme of verification of the fixed assets at reasonable intervals which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to the information and explanation given to us, no material discrepancies were noticed on such physical verification.

c) In our opinion and according to the information and explanation given to us, any substantial part of fixed assets has not been disposed of by the company during the year.

2. In respect of its inventories

a) The inventory (excluding stocks with third parties) has been physically verified by the management during the year at reasonable interval. 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 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. As explained to us, there were no material discrepancies noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the company to/from companies, firms or other parties covered in the register maintained under section 301 of the act:

a) The company has granted loan to one party covered in the register maintained under section 301 of the Act as follows:

Name of the Party Max. Amount Outstanding Balance as on 31.03.2012 During The Year

Vintex Tools Rs. 78,58,567/- Rs. 78,58,567/- Pvt.Ltd

b) In our opinion and according to the information and explanation given to us, the rate of interest and other terms & conditions of loan given by the Company, are not prima facie prejudicial to the interest of the company.

c) The Principal amount are repayable over a period of one to three years, while the interest is payable annually at the discretion of the company.

d) In respect of the said loans and interest thereon, there are no overdue amounts.

(e) The company has not taken any loans, secured or unsecured from companies, firms or other Parties covered in the register maintained section 301 of the Act. Accordingly, clauses (iii) (f) and (iii) (g) of the paragraph 4 of the order are not applicable to the company for the current year.

4. In our opinion and according to the information and explanation 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. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanation 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. In respect of the contracts or arrangements referred to in section 301 of the act:

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

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at price which are prima facie reasonable, having regard to prevailing market price at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public during the year. Therefore, the provisions of clause (vi) of paragraph 4 of the order is not applicable to the company.

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 cost records maintained by the company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under section clause (d) of sub section (1) of section 209 of the Act 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.

9. In respect of statutory dues:

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 generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, Income Tax, Sales Tax, wealth tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities in India.

b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of income tax, wealth tax, service tax, custom duty and cess which have not been deposited on account of any dispute. The particular of dues of excise duty as at 31st March 2012 which have not been deposited on account of a dispute, are as follows.

Name of the Nature of Amount Period to which Forum where statue dues the amount the dispute relates is pending

The Central Excise duty 22,60,000 2005-06 Appellate Excise Act, including 22,60,000 2005-06 Tribunal, 1944 interest 2,50,000 2005-06 New Delhi and penalty

10. The company does not have accumulated losses as at March 31, 2012.The Company has not incurred cash losses during the financial year covered by our audit and 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 holder.

12. In our opinion and based on the information available, no loans and advances has been granted by the company on the basis of security by way of pledge of shares, debentures and other securities.

13. The provisions of clause (xiii) of paragraph 4 of the order relating to chit fund/ nidhi/mutual benefit fund/ society 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. 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 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 purpose 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 explanation given to us, there are no funds raised on shortterm 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 issued Optionally Convertible debentures amounting to Rs.97498400/- during the year. The company has not created securities/ charges in respect of aforesaid OCDs. Those OCD's are secured by way of pledge of 2400000 Equity Shares of Directors.

20. The company has not raised any money by way of public issues during the year except private placement of 1597993 equity shares of face value Rs.10/- each to Green India Venture Fund.

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, no material instance of fraud on or by the company noticed or reported during the year.

For Vinay Gandhi & Associates

Chartered Accountants

FRN:014442C

Vinay Gandhi

[Proprietor]

Place: Indore [M No. 75972]

Date : 08/08/2012


Jun 30, 2010

1. We have audited the attached Balance Sheet of M/S. SHAKTI PUMPS (INDIA) LIMITED (the company) as on 30 June 2010 and also the Profit & Loss Account and the Cash Flow Statement of the company for the year ended on that date annexed there to. 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 accessing 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 (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 explanation given to us, we give in the annexure hereto a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

e) On the basis of written representation received from the directors of the company, as on 30th June 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 30th June 2010 from being appointed as a director in terms clause (g) of sub section (1) of section 274 of the Act.

5. In our opinion and to the best of our information and according to the explanation 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 Balance Sheet of the state of affairs of the company as at 30th June 2010, in the case of Profit and Loss Account, of the profit for the year ended on that date and

ii. 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 Para 3 of our Auditors Report of even date to the members of Shakti pumps (India) Limited on the Financial statements for the year 30th June, 2010]

1. a) The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets in respect of all its locations on the basis of available information.

b) The fixed Assets were physically verified during the year by the management in accordance with a regular programme of verification of the fixed assets at reasonable intervals which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. According to the information and explanation given to us, no material discrepancies between the book records and the physical inventory have been noticed.

c) In our opinion and according to the information and explanation given to us, a substantial part of fixed assets has not 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 at reasonable interval. 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 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. In our opinion, the discrepancies noticed on physical verification between physical inventories as compared to book records.

3. a) The company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained section 301 of the Act. Accordingly, clauses (iii) (b) to (d) of the paragraph 4 of the order are not applicable to the company for the current year.

b) The company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained section 301 of the Act. Accordingly, clauses (iii) (f) and (iii) (g) of the paragraph 4 of the order are not applicable to the company for the current year.

4. In our opinion and according to the information and explanation 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. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanation given to us, we have neither come across nor have we 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 or transactions referred to in section 301 of the Companies Act,1956 have been entered in the register required to be maintained under section 301 of the Companies Act,1956.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 have been made at price which are prima facie reasonable, having regard to prevailing market price at the relevant time where such market prices are available.

6. In our opinion and according to the information and explanation given to us, the company has not accepted deposits from the public during the year. Therefore, the provisions of clause 4 (vi) is not applicable to the company.

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 the 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.

According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, Income Tax, Sales Tax, wealth tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities in India.

b) According to the information and explanations given to us and the records of the company examined by us, there are no dues of income tax, wealth tax, service tax, custom duty and cess which have not been deposited on account of any dispute. The particular of dues of excise duty as at 30th June 2010 which have not been deposited on account of a dispute, are as follows

Name of the statue Nature of dues Amount Period to Forum where the dispute (Rs.) which the is pending amount relates

The Central Excise Act, Excise duty 4,79,724 2004-05 Commissioner Appeals, Indore 1944 including interest 22,16,000 2005-06 Appellate Tribu- nal, New Delhi

and penalty 22,60,000 2005-06 Appellate Tribu- nal, New Delhi

2,50,000 2005-06 Appellate Tribu- nal, New Delhi

10. The company does not have accumulated losses as at 30 June 2010. The Company has not incurred cash losses during the financial year covered by our audit and 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 holder..

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

13. The provisions of any special statute applicable to chit fund/ nidhi / society/ mutual fund benefit fund 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. 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 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 purpose 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 explanation given to us, there are no funds raised on 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 hence the provisions of clause 4(xix) are not applicable to the company.

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, I have neither come across ant 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 Vinay Gandhi & Associates

Chartered Accountants

Vinay Gandhi

Place: Indore Proprietor

Date : 9th September 2010 M No. 75972

 
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