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Auditor Report of Shriram City Union Finance Ltd.

Mar 31, 2015

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

2) Management''s Responsibility for the Financial Statements

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

3) Auditor''s Responsibility

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

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

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

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

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

4) Opinion

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

5) Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 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 said Order.

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

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

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

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

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 27 to the financial statements;

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

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

I. (a) According to the information and explanations given to us and records produced before us, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) According to the information and explanations given to us and records produced before us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such physical verification.

II. The Company is engaged in financing activities which does not involve maintenance of any inventory.

III. As per the information and explanations given to us the Company has granted loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 (the Act). In respect of the same,

(a) The receipts of principal is regular, and

(b) There is no overdue amount as at the end of the year.

IV In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business for purchase of fixed assets. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. There is no sale of goods or service or purchase of inventory.

V In respect of deposits accepted, in our opinion and according to the information and explanations given to us, the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Act and the rules framed thereunder, to the extent applicable, have been complied with. According to the information and explanation given to us, no order has been passed by the Company Law Board, the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal in this regard in respect of the Company.

VI. To best of our knowledge and according to the information and explanations given to us the Central Government has not prescribed maintenance of cost records under Section 148(1) of the Act for the Company.

VII. (a) According to the information and explanations provided to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Wealth Tax, Service Tax, Income Tax, Excise Duty, Custom Duty, Sales Tax, Cess, Value Added Tax, Employees'' State Insurance and other material statutory dues applicable to it. There are no undisputed amounts that were outstanding for a period of more than six months from the date they became payable.

(b) On the basis of information and explanations given to us and the relevant documents produced before us, the following dues outstanding in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Value Added Tax and Cess have not been deposited on account of dispute -

Name of the statute Nature of dues Amount (Rs. in lacs)

Income Tax Act 1961 Income Tax demands 2,337.47

Income Tax Act 1961 Income Tax demands 1,530.54

Income Tax Act 1961 Income Tax demands 963.23

Kerala VAT Value Added Tax 4.65

Name of the Statute Years to which the Pending with amount relates

Income Tax Act 1961 Assessment year 2012-13 CIT (Appeal)

Income TAx Act 1961 Assessment year ITAT 2011-12

Income Tax Act 1961 Assessment year ITAT 2010-11 IIAI

Kerala VAT Assessment Year Dy. C.I.T.(Appeal) 2007-08

(c) According to the information and explanations given to us the amount 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 made there under has been transferred in time.

VIII. The Company has no accumulated losses at the end of financial year and has not incurred cash losses in the current and immediately preceding financial year.

IX. Based on our audit procedures and as per information and explanations given by the management, it appears that the Company has not defaulted in the repayment of dues to banks, financial institutions or debenture holders.

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

XI. In our opinion and to the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the Company were, prima facie, utilised during the year for the purposes for which the loans were obtained other than funds temporarily parked pending utilization of the funds for the intended use.

XII. We have been informed that during the audit period certain borrowers/employee have defrauded the Company by pledging low purity and stolen Gold against Jewel Loan amounting to Rs. 704.06 lakhs. The Company has taken necessary action against the said borrowers/employee. Refer Note 30 to the financial statements.

For Pijush Gupta & Co. Firm Registration No. 309015E Chartered Accountants Ramendra Nath Das Place: Chennai Partner Date: 28th April 2015 Membership No. 014125


Mar 31, 2014

We have audited the accompanying financial statements of SHRIRAM CITY UNION FINANCE LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2014 and the Statement of Profit and Loss and the Cash Flow Statement respectively for the year then ended and a summary of significant accounting policies and other explanatory information incorporated in the Schedules and Notes to Accounts.

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 of the financial statements that give a true view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

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

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

Opinion

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

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

(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, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2005 ("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 said Order.

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

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

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

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

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

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 section274 of the Act.

Re: SHRIRAM CITY UNION FINANCE LIMITED ("the company")

Financial Year Ended March 31, 2014

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

(b) According to the information and explanations given to us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such physical verification.

(c) There was no disposal of substantial part of its fixed assets during the year.

II. The Company is engaged in financing activities which does not involve maintenance of any inventory.

III. As per the information and explanations given to us the Company has not granted/taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 (the Act).

I V. 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 for purchase of fixed assets. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. There is no sale of goods or service or purchase of inventory.

V. According to the information and explanations provided by the management there are no contracts or arrangements referred to in Section 301 of the Act, the particulars of which need to be entered into the register maintained under the said Section.

VI. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, the directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. According to the information and explanation given to us, no order has been passed by the Company Law Board, the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal in this regard in respect of the Company.

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

VIII. According to the information and explanations given to us the Central Government has not prescribed maintenance of cost records for the Company under Section 209(1)(d) of the Act.

IX. (a) According to the information and explanations provided to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, service tax, income tax, and other material statutory dues applicable to it and there are no dues payable in respect of Employees'' State Insurance, Investor Education and Protection Fund, Excise duty, Custom Duty and Sales Tax, Cess and any other statutory dues with appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of statutory dues were outstanding at the year-end for a period of more than six months from the date they became payable.

Name of the statute Nature of dues Amount Years to which the Pending with (Rs. in lacs) amount relates

Income Tax Act

1) Income tax on demands against disallowance 3,742.88 Assessment Year 2011-12 C.I.T. (Appeal) of certain expenses, including ESOP, Provision for Bad Debts, Royalty, Transfer to Reserve Funds etc.

2) Income tax on demands against disallowance 1,625.08 Assessment Year 2010-11 C.I.T. (Appeal) of certain expenses, including ESOP, Provision for Bad Debts, Royalty, Transfer to Reserve Funds etc.

3) Penalty against amount transferred to Re- 1,106.48 Assessment Year 2008-09 C.I.T. (Appeal) serve Funds.

4) Income tax on demands against income from 3,918.88 Assessment Year 2007-08 C.I.T. (Appeal) Securitizations and disallowance u/s 40 (a) (ia); earlier assessment order reopened.

Kerala Value Added Tax

1) Demand on account of sale of Seized vehicle 4.65 Assessment Year 2007-08 Dy C.I.T (Appeal)

(c) On the basis of information and explanations given to us and the relevant documents produced before us, the following dues have not been deposited on account of dispute –

X. The Company has no accumulated losses at the end of financial year and has not incurred cash losses in the current and immediately preceding financial year.

XI. Based on our audit procedures and as per information and explanations given by the management, it appears that the Company has not defaulted in the repayment of dues to banks, financial institutions or debenture holders.

XII. From our examination of books and records and according to the information and explanations given to us, it appears that adequate documents and records are maintained in cases where Company has granted loans and advances on the basis of security by way of pledge of shares and other securities.

XIII. In our opinion the company is not a chit fund or a nidhi/mutual benefit fund/society.

XIV. In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities and debentures and other investments.

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

XVI. In our opinion and to the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtained other than funds temporarily parked pending utilization of the funds for the intended use.

XVII. According to the information and explanations given to us, and on overall examination of the books and records of the company and considering the nature of the business and activity being carried on, we report that no funds raised on short term basis have been used for long term investment.

XVIII. The company, during the year has not made any preferential allotment of equity shares and convertible warrants to parties and companies covered in the registrar maintained under section 301 the Act.

XIX. According to the information and explanations given to us, during the period, the Company has created charge in respect of secured debentures issued.

XX. The company has disclosed the end use of money raised by public issues in the Notes to accounts and the same has been verified by us

XXI. Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and as per the information and explanations given by the management, we report that no material fraud on or by the company has been noticed or reported during the course of our audit.

For Pijush Gupta & Co.

Firm Registration No: 309015E

Chartered Accountants

Ramendra Nath Das

Place: Chennai Partner

Date: April 30, 2014 Membership No: 014125


Mar 31, 2013

We have audited the accompanying financial statements of SHRIRAM CITY UNION FINANCE LIMITED ("the Company"), which comprise the Balance Sheet as at March 31,2013 and the Statement of Profit and Loss and the Cash Flow Statement respectively for the year then ended and a summary of significant accounting policies and other explanatory information incorporated in the Schedules and Notes to Accounts.

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 of the financial statements that give a true 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 ac- cordance 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 state- ments. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material mis- statement 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 account- ing 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, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2005 ("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 said Order.

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

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

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

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

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

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 section274 of the Act.

Re: SHRIRAM CITY UNION FINANCE LIMITED ("the company") Financial Year Ended March 31,2013

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

(b) According to the information and explanations given to us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such physical verification.

(c) There was no disposal of substantial part of its fixed assets during the year.

II. The Company is engaged in financing activities which does not involve maintenance of any inventory.

III. As per the information and explanations given to us the Company has not granted/taken any loans, se cured or unsecured, to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 (the Act).

IV. 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 for purchase of fixed assets. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas. There is no sale of goods or service or purchase of inventory.

V. According to the information and explanations provided by the management there are no contracts or arrangements referred to in Section 301 of the Act, the particulars of which need to be entered into the register maintained under the said Section.

VI. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, the directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. According to the information and explanation given to us, no order has been passed by the Company Law Board, the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal in this regard in respect of the Company.

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

VIII. According to the information and explanations given to us the Central Government has not prescribed maintenance of cost records for the Company under Section 209(1 )(d) of the Act.

IX. (a) According to the information and explanations provided to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, service tax, income tax, and other material statutory dues applicable to it and there are no dues payable in respect of Employees'' State Insurance, Investor Education and Protection Fund, Excise duty, Custom Duty and Sales Tax, Cess and any other statutory dues with appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of statutory dues were outstanding at the year-end for a period of more than six months from the date they became payable.

(c) On the basis of information and explanations given to us and the relevant documents produced before us, the following dues have not been deposited on account of dispute -

Name of the statute Nature of dues Amount (Rs. in lakhs)

Income Tax Act 1) Income tax on de- 5718.28 mands against dis- allowance of certain expenses, including ESOP, Provision for Bad Debts, Royalty, Transfer to Reserve Funds etc.

2) Penalty against 1106.48 amount transferred to Reserve Funds.

3) Income tax on 3918.88 demands against income from Se- curitisations and disallowance u/s 40(a) (ia); earlier assessment order reopened.

Name of the Statute Years to which the Pending with amount relates

Income Tax Act Assessment Year C.I.T. (Appeal) 2010-11

Assessment Year C.I.T. (Appeal) 2008-09

Assessment Year C.I.T. (Appeal) 2007-08

X. The Company has no accumulated losses at the end of financial year and has not incurred cash losses in the current and immediately preceding financial year.

XI. Based on our audit procedures and as per information and explanations given by the management, it appears that the Company has not defaulted in the repayment of dues to banks, financial institutions or debenture holders.

XII. From our examination of books and records and according to the information and explanations given to us, it appears that adequate documents and records are maintained in cases where Company has granted loans and advances on the basis of security by way of pledge of shares and other securities.

XIII. In our opinion the company is not a chit fund or a nidhi/mutual benefit fund/society.

XIV. In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities and debentures and other investments.

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

XVI. In our opinion and to the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtained other than funds temporarily parked pending utilization of the funds for the intended use.

XVII. According to the information and explanations given to us, and on overall examination of the books and records of the company and considering the nature of the business and activity being carried on, we report that no funds raised on short term basis have been used for long term investment.

XVIII. The company, during the year has not made any preferential allotment of equity shares and convertible warrants to parties and companies covered in the registrar maintained under section 301 the Act.

XIX. According to the information and explanations given to us, during the period, the Company has created charge in respect of secured debentures issued.

XX. The company has disclosed the end use of money raised by public issues in the Notes to accounts and the same has been verified by us

XXI. Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and as per the information and explanations given by the management, we report that no material fraud on or by the company has been noticed or reported during the course of our audit.

For Pijush Gupta & Co.

Firm Registration No: 309015E

Chartered Accountants

Pijush Kumar Gupta

Place: Hyderabad Partner

Date: May 20,2013 Membership No: 015139


Mar 31, 2012

1. We have audited the attached Balance Sheet of SHRIRAM CITY UNION FINANCE LIMITED, (the "Company") as at March 31,2012, and the related Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date annexed thereto which we have signed under reference to this report. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with 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 the 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, ("the Order") issued by the Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit a statement on matters specified in the said order has been given in the annexure hereof.

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

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

b) in our opinion, proper books of account as required by law have been kept by the Company so far as 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 and according to the information and explanations given to us, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

e) on the basis of written representations received from the directors and taken on record by the company, none of the directors are disqualified as on March 31,2012, from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274, of the Companies Act, 1956;

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

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

(ii) in the case of the Statement of Profit and Loss, of the profit of the Company forth 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.

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

(b) According to the information and explanations given to us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such physical verification.

(c) There was no disposal of substantial part of its fixed assets during the year.

II. The Company is engaged in financing activities which does not involve maintenance of any inventory.

III. As per the information and explanations given to us the Company has not granted/taken any loans, secured or unsecured, to/from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 (the Act).

IV. 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 for purchase of fixed assets. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness the internal control system of the company in respect of these areas. There is no sale of goods or service or purchase of inventory.

V. According to the information and explanations provided by the management there are no contracts or arrangements referred to in Section 301 of the Act, the particulars of which need to be entered into the register maintained under the said Section.

VI. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, the directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. According to the information and explanation given to us, no order has been passed by the Company Law Board, the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal in this regard in respect of the Company.

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

VIII. According to the information and explanations given to us the Central Government has not prescribed maintenance of cost records under Section 209(1)(d) of the Act.

IX. (a) According to the information and explanations provided to us, the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, service tax, income tax, and other material statutory dues applicable to it and there are no dues payable in respect of Employees' State Insurance, Investor Education and Protection Fund, Excise duty, Custom Duty and Sales Tax, cess and any other statutory dues with appropriate authorities.

(b) On the basis of information and explanations given to us and the relevant documents produced before us, the following dues have not been deposited on account of dispute:

Name of the statute Nature of dues Amount (Rs. in lacs) Years to which the amount relates

In come Tax Act income tax on demands/ESOP, 1678.61 Assessment disallowance year 2009-10

Name of the Pending with Statute

Income Tax CIT (Appeals) Act X. Based on our audit procedures and as per information and explanations given by the management, it appears that the Company has not defaulted in the repayment of dues to banks, financial institutions or debenture holders.

XI. From our examination of books and records and according to the information and explanations given to us, it appears that adequate documents and records are maintained in cases where Company has granted loans and advances on the basis of security by way of pledge of shares and other securities.

XII. In our opinion the company is not a chit fund or a nidhi/mutual benefit fund/society.

XIII. In our opinion and according to the information and explanations given to us, the Company is not dealing or trading in shares, securities and debentures and other investments.

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

XV. In our opinion and to the best of our knowledge and belief and according to the information and explanations given to us, term loans availed by the company were, prima facie, applied by the company during the year for the purposes for which the loans were obtained other than funds temporarily parked pending utilization of the funds for the intended use.

XVI. According to the information and explanations given to us, and on overall examination of the books and records of the company and considering the nature of the business and activity being carried on, we report that no funds raised on short term basis have been used for long term investment.

XVII. The company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act.

XVIII. According to the information and explanations given to us, during the period, the Company has created charge in respect of secured debentures issued.

XIX. The company has disclosed the end use of money raised by public issues in the Notes to accounts and the same has been verified by us.

XX. Based upon the audit procedures performed for the purpose of reporting true and fair view of the financial statements and as per the information and explanations given by the management, we report that no material fraud on or by the company has been noticed or reported during the course of our audit.

For Pijush Gupta & Co.

Firm Registration No :309015E

Chartered Accountants

Place: Chennai

Ramendra Nath Das

Date: May 18,2012

Partner

Membership No. 014125


Mar 31, 2011

We have audited the attached Balance Sheet of Shriram City Union Finance Limited as at 31st March, 2011 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto which we have signed under reference to this report. The financial statements relating to the Corporate Region have been audited by us and Other Regions audited by Branch Auditors whose reports were forwarded to and considered by us. 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.

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 providesareasonablebasisforouropinion.

1. As required by the Companies (Auditor's Report) Order, 2003 issued by the Government Of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, a statement on matters specified in the said order has been given in the Annexure hereof.

2. Further toour comments in the annexure referred to in paragraph 1 above, we reportthat:

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

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

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

d) In our opinion and according to the information and explanations given to us, the Balance Sheet .Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub -Section (3C) of Section 211, of the Companies Act, 1956.

e) On the basis of the written representations received from the directors and taken on record by the company, none of the directors are disqualified as on 31st, March 2011 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

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

(i) inthecaseof balance sheet, of the state of affairs of the company as at 31 st March 2011;

(ii) inthecaseof profit and loss account, of the profit for the year ended on that date; and

(iii) in the case of cash flow statement, of the cash flows fortheyearended on that date.

Annexure to Auditors' Report (Referred to in Paragraph 1 of the Auditors- Report of even date)

Re: Shriram City Union Finance Limited ('the Company')

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

b. All fixed assets have not been physically verified bythe management during the year but there is a regular programme of verification 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.

c. There was no substantial disposal of fixed assets during theyear.

II. The Company is primarily engaged in financing activities which does not involve maintenance of any inventory.

III. As informed, the Company has not granted or taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintainedundersection301oftheAct.

IV. 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 fixed assets. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these areas. There is no sale of services.

V. According to the information and explanation provided by the management, we are of the opinion that there are no transactions with reference to contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301.

VI. In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued bythe Reserve Bankof India and the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any otherTribunal.

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

VIII. As per the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under section 209(1) (d) of the Act.

IX. A) On the basis of our examination of theCompany's books and records and on the basis of information and explanations given to us the Company is generally regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, wealth tax, sales tax, customs duty, excise duty, cess and any other statutory dues with appropriate authorities.

B.) On the basis of information and explanations given to us and the relevant documents produced before us, the following dues have not been deposited on account of dispute

Amount Years to which the Forum where dispute Name of the statute Nature of dues (Rs in lacs) amount relates is pending

Wealth Tax Act, 1957 Wealth tax demands 0.75 A.Y.2001-02 CIT(Appeals)

Wealth Tax Act, 1957 Wealth tax demands 0.57 A.Y.2002-03 CIT(Appeals)

Wealth Tax Act, 1957 Wealth tax demands 0.43 A.Y.2003-04 CIT(Appeals)

Finance Act, 1994 Service tax on hire purchase 1553.08 2001-02 to 2007-08 Before Madras (Service Tax) and lease transactions High Court

X. The company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

XI. Based on our audit procedures and as per the information and explanations given by the management, it appears that Company has not defaulted in repayment of dues to a financial institution, bankordebenture holders.

XII. Based on our examination of documents and records, we are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and othersecurities.

XIII. In our opinion, the Company is not a chit fund or a nidhi/ mutual benefit fund /society.

XIV. In our opinion, the Company is not dealing or trading in shares, securities, debentures and other investments.

XV. According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

XVI. To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company during the year for the purposes for which the loans were obtained other than funds temporarily invested pending utilization of the funds forthe intended use.

XVII. According to the information and explanations given to us and on an overall examination of the balance sheet of the Company and considering the nature of the business and activity being carried on, we report that no funds raised on short- term basis have been used for long-term investment.

XVIM.The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Act.

XIX. According to the information and explanations given to us, the Company has created security or charge in respect of debentures issued.

XX. The Company has not raised any money by public issue during the year.

XXI. Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no material fraud on or by the Company has been noticed or reported during the course of our audit.

For Pijush Gupta & Co.

Firm Registration No: 309015E

Chartered Accountants

Ramendra Nath Das

Place: Chennai Partner

Date: 26,hMay, 2011 Membership No. 014125


Mar 31, 2010

We have audited the attached Balance Sheet of Shriram City Union Finance Limited as at 31st March, 2010 and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto which we have signed under reference to this report. The financial statements relating to the Corporate Region have been audited by us and Other Regions audited by Branch Auditors whose reports were forwarded to and considered by us. 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.

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 providesareasonablebasisforouropinion.

1. As required by the Companies (Auditors Report) Order, 2003 issued by the Government Of India in terms of section 227(4A) of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us during the course of audit, a statement on matters specified in the said order has been given in the Annexure hereof.

2.Furthertoour comments in the annexure referred to in paragraph 1 above, we report that:

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

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

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

(d) In our opinion and according to the information and explanations given to us, the Balance Sheet , Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in Sub -Section (3C) of Section 211, of the Companies Act, 1956.

(e) On the basis of the written representations received from the directors and taken on record by the company, none of the directors are disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of subsection (1) of section 274 of the Companies Act, 1956.

(f) In our Opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act ,1956 , in the manner so required and 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 2010;

(ii) in the case of profit and loss account, of the profit for the year ended on that date; and

(iii) in the case of cash flow statement, of the cash flows for the year ended on that date.

Annexure to Auditors Report

(Referred to in Paragraph 1 of the Auditors- Report of even date)

Re: Shriram City Union Finance Limited (the Company)

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

(b) These Fixed Assets have been physically verified by the Management at reasonable intervals. We have been informed that no material discrepancies were noticed on such verification.

(c) During the year, the Company has disposed off a substantial part of the plant and machinery. Based on the information and explanation given by the management and on the basis of audit procedures performed by us, we are of the opinion that the sale of the said part of plant and machinery has not affected the going concern status of the Company.

(ii) The Company is a Non-Banking Financial Company (NBFC) engaged in the business of giving loans and does not maintain any inventory. Therefore Clause 4(H) of the Order is not applicable to the Company.

(iii) As informed, the Company has not granted ortaken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Act. Therefore Clause 4 (iii) of the Order is not appl icable to the Company.

(iv) 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 purchase of fixed assets and rendering of services. As informed, the Company has not made any purchase of Inventories and / or sold goods during the year. During the course of our audit, no major weakness has been noticed in the internal control system in respect of these

areas and accordingly the question of commenting on whether there is continuous failure to correct major weakness in the Internal Control System of the Company does notarise.

(v) According to the information and explanation provided by the management, we are of the opinion that there are no transactions with reference to contracts or arrangements referred to in section 301 of the Act that need to be entered into the register maintained under section 301. Therefore Clause (v) of the Order is not applicable tothe Company.

(vi) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Act and the rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Courtorany otherTribunal.

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

(viii) As per the information and explanations given to us, the Central Government has not prescribed maintenance of cost records under section 209(1 )(d) of the Act. Therefore Clause (viii) of the Order is not applicable to the Company.

(ix) (a) On the basis of our examination of the Companys books and records and on the basis of information and explanations given to us, we are of the opinion that the Company is regular in depositing undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, wealth tax, sales tax, service tax, customs duty, excise duty, cess and any otherstatutory dues with appropriate authorities.

(b) on the basis of information and explanations given to us and the relevant documents produced before us, the following dues have not been deposited on accountofdispute.

Amount Years to which the Name of the statute Nature of dues (Rs in lacs) amount relates Finance Act, 1994 Service tax on hire purchase 1553.08 2001-02 to (Service Tax) and lease transactions 2007-08

Forum where dispute Name of the statute is pending Finance Act, 1994 Before Supreme (Service Tax) Court of India

(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institution, bankordebenture holders.

(xii) Based on our examination of documents and records, we are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) Inouropinion.theCompanyisnotachitfundora nidhi / mutual benefit fund / society. Therefore, the Clause 4(xiii) of the Order is not applicable to the Company.

(xiv) In our opinion, the company is not dealing or trading in shares, securities, debenture and other investments.

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

(xvi) To the best of our knowledge and belief and according to the information and explanations given to us, in our opinion, term loans availed by the Company were, prima facie, applied by the Company during the yearforthe purposes for which the loans were obtained other than funds temporarily invested pending utilization ofthefundsfortheintended use.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company and considering the nature of the business and activity being carried on, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained undersection 301 ofthe Act.

(xix) According to the information and explanations given to us, the Company has created security or charge in respectof debentures issued.

(xx) The Company has not raised any money by public issueduringtheyear.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, no fraud on or by the Company has been noticed or reported during the course of our audit except for one instance of cash embezzlement aggregating Rs. 11.47 lakhs reported during the year. The Company has initiated legal action and the amount involved as aforesaid has been fully written off.

Pijush Kumar Gupta Partner Membership No: 015139 For & on behalf of Pijush Gupta & Co. Chartered Accountants Firm registration number: 309015E Place: Chennai Date: 21.05.2010


Mar 31, 2000

We have audited the attached Balance Sheet of Shriram City Union Finance Limited as at 31st March, 2000 and the Profit and Loss Account for the period ended on that date annexed thereto, in which are incorporated the audited statements of Eastern Region audited by us and Northern Region, Western Region, Southern Region and its sub regions, as audited by branch auditors of the said regions/ sub regions, and report that:

1. As required by the Manufacturing and Other Companies (Auditors Report) Order, 1988, and on the basis of such checks as we considered appropriate and according to the information and expla- nations given to us during the course of our audit, we enclose in annexure a statement on the matters specified in the said order.

2. Further to our comments in the annexure referred to in paragraph 1 above, we report that:

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

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

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

(d) In our opinion and according to the information and explanations given to us the Profit and Loss Account and the Balance Sheet dealt with by this report comply with the Accounting Standards referred to in Sub-Section(3c) of Section 211, of the Companies Act, 1956.

(e) Reports including report on compliance of Prudential Norms prescribed by the Reserve Bank of India and compliance of provisions of Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998 of the branch auditors forwarded to us have been considered and relied upon by us in preparing our Report.

(f) In our opinion and to the best of our information and according to the explanations given to us, the Balance Sheet and Profit and Loss Account together with Notes on Accounts and Significant Accounting Policies, give the information required by the Companies Act, 1956, in the manner so required, and

(i) the Balance Sheet gives a true and fair view of the state of affairs of the Company as at 31st March, 2000.

(ii) the Profit and Loss Account gives a true and fair view of the Profit for the period ended on that date.

ANNEXURE

(i) The Company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets. As informed to us, the fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verifica- tion.

(ii) None of the fixed assets have been revalued during the year.

(iii) In respect of deposits and loans taken from companies and other parties which are required to be listed in the register maintained under Section 301 of the Companies Act, 1956 the rate of interest and other terms and conditions of such deposits and loans are not prima facie prejudicial to the interest of the Company.

(iv) According to information and explanations given to us, in respect of loans granted to companies, firms or other parties which are required to be listed in the register maintained under Section 301 of the Companies Act, 1956, the rate of interest wherever applicable and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(v) In respect of loans or advances in the nature of loans given by the Company wherever there are specific stipulations as to the repayment of principal, the parties are generally repaying the same as stipulated and are also regular in payment of interest wherever applicable.

(vi) There is adequate internal control procedure commensurate with the size of the Company and the nature of its business for the purchase of plant and machinery, equipment and other assets and for the sale of goods.

(vii) The transactions of purchase of goods and materials and sale of services, made in pursuance of contracts or arrangements which are required to be entered in the Register specified under Section 301 of the Companies Act, 1956 and aggregating during the year to Rs.50,000 or more in respect of each party, have been made at prices which in our opinion and on the basis of explanations given to us are reasonable having regard to the prevailing market prices for such goods and services or the prices at which transactions for similar goods or services have been made with other parties.

(viii) The Company has complied with the directions issued by the Reserve Bank of India and the provisions of Section 58-A of the Companies Act, 1956 and the Rules framed thereunder with regard to deposits accepted from the public.

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

(x) The Company is regular in depositing the Provident Fund dues and Employees State Insurance with the appropriate authorities.

(xi) According to information and explanations given to us, no undisputed amounts payable in respect of Income-tax, Wealth tax and Sales tax, Customs Duty and Excise Duty were outstanding as at 31st March 2000 for a period of more than six months from the date on which they became payable.

(xii) As per the information furnished by the Management and during the course of our examination of the books of account carried out, we have not come across any personal expenses which have been charged to profit and loss account other than those payable under contractual obligations or in accordance with generally accepted business practice.

(xiii) The provisions of Clause O of Sub Section (1) of Section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985, are not applicable to the Company.

(xiv) The Company has granted loans or advances on the basis of security by way of pledge of debentures, shares and other securities and adequate documents and records were maintained in this regard.

(xv) The Clause A (iii), (iv), (v), (vi), (xii), (xiv), and (xvi) and Clause D (iii) and (iv) of paragraph 4 of the Manufacturing and Other Companies (Auditors Report) Order, 1988 are not applicable.

For PIJUSH GUPTA & CO. Chartered Accountants

PIJUSH KUMAR GUPTA Partner

Calcutta 15th September, 2000

 
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