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Auditor Report of Shriram EPC Ltd.

Mar 31, 2015

1. We have audited the accompanying standalone financial statements of SHRIRAM EPC LIMITED ("the Company"), which comprise the Balance Sheet as at 31 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.

Management's Responsibility for the Standalone Financial Statements

2. 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.

Auditors' Responsibility

3. 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.

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

Opinion

5. 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 loss and its cash flows for the year ended on that date.

Emphasis of Matters

a) We refer to Note 48 in the financial statements regarding Unbilled revenue, Trade Receivables, Short term loans and advances aggregating to Rs.9538.08 Lakhs in respect of a project which has been suspended by the customer due to financial difficulties. In view of the steps contemplated by the Company as more fully described in the note, the management is hopeful of recovery of all its dues.

b) We draw attention to the Note 49 in the financial statements regarding the dues of Rs.12,257.73 Lakhs in respect of an overseas project which was cancelled by the customer during the previous year. For the reasons mentioned in the note, the said dues as considered fully realizable by the management.

c) Attention is invited to Note 50 in the Financial Statements regarding the dues of Rs.8,300.19 Lakhs in respect of one project which has been suspended. These dues are considered fully realizable by the management at this stage in view of the steps taken by the Company to recommence the project and realize its dues.

Our report is not qualified in respect of these matters.

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 in terms of Section 143(11) of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order.

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

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

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

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

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

(e) The matters described in Emphasis of Matters paragraph above and clause VIII in the annexure to this report and Note 1B of financial statements, in our opinion, may have an adverse effect on the functioning of the Company.

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

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

a. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.(Also Refer Note 39 of Financial Statements)

b. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts.

c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements' section of our report of even date)

(i) In respect of its fixed assets:

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

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

(ii) In respect of its inventories:

(a) As explained to us, the inventories (other than contract work in progress) were physically verified by the Management at the year end.

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

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

(iii) According to the information and explanations given to us, the Company has granted loans, unsecured, to companies, firms or other parties covered in the Register maintained under Section 189 of the Companies Act 2013, in respect of such loans:

(a) In the absence of stipulations, the regularity of the receipts of principal amounts and interest has not been commented upon.

(b) There were no overdue amounts exceeding Rs.1 Lakh remaining outstanding as at the year-end.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business for the purchase of inventory and fixed assets and for the sale of goods and services and during the course of our audit we have not observed any continuing failure to correct major weaknesses in such internal control system.

(v) According to the information and explanations given to us, the Company has not accepted any deposit during the year.

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

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

(a) The Company has been generally regular in depositing undisputed statutory dues, including Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Customs Duty, Value Added Tax, Cess and other material statutory dues applicable to it with the appropriate authorities. In respect of Service Tax, the Company has not been generally regular in depositing the dues with the appropriate authorities though the delays in deposit have not been serious.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Value Added Tax, Cess and other material statutory dues in arrears as at 31 March 2015 for a period of more than six months from the date they became payable.

(c) Details of dues of Income-tax, Service Tax and Value Added Tax which have not been deposited as on 31 March, 2015 on account of disputes are given below:

Name of the Statute Nature of Dues Forum where Dispute is pending

Income Tax, interest and Commissioner of Income Tax Income Tax Act, 1961 penalty ( Appeals )

Income Tax, interest and Income Tax penalty Act, 1961 Income Tax Appellate Tribunal

Service Tax (Chapter V of the Customs Excise and Service Tax Service Tax and penalty Finance Act 1994) Appellate Tribunal

Service Tax (Chapter V of the Commissioner of Service tax Service Tax and penalty Finance Act 1994) (Appeals)

Andhra Pradesh Value Added Value Added Tax Supreme Court Tax Act

Tamil Nadu Value added Tax Value Added Tax High Court Act

West Bengal Value Added West Bengal Commercial Taxes Value Added Tax Tax Act Appellate & Revisional Board

Ld. Joint Commissioner West Bengal Value Added tax Value Added Tax (Appeals) of West Bengal act Commercial Taxes

West Bengal Value Added Tax Value Added Joint Commissioner (Appeals) Tax Act

Jharkhand Value Added Tax Value Added Tax Commercial Tax Officer Act

Andhra Pradesh Value Added Value Added Tax Deputy Commissioner (Appeals) Tax Act

Orissa Value added Tax Act Value added Tax High Court



Name of the Statute Period to which Amount the amount relates involved (Financial year) (Rs. in lakhs)

2005-06 to Income Tax Act, 1961 1,406.02 2011-2012

Income Tax Act,1961 2005-06, 2007-08 & 60.22 2008-09

Service Tax (Chapter 2006-07 to 2008-09 314.28 V of the Finance Act, 1994)

Service Tax (Chapter 2008-09 to V of the Finance 114.54 Act,1994 2011-2012

Andhra Pradesh value 2008-2009 & Added Tax Act 223.33 2009-2010

Tamil Nadu Value 2008-09 to Added Tax Act 1,123.31 2012-13

West Bengal Value 2007-08 558.45 Added Tax Act

West Bengal Value 2009-10, 2010-11 & Added Tax ACt 551.95 2011-12

West Bengal Value 2008-09 319.25 Tax Act

Jharkhand Value 2008-09 to 2010-11 661.82 Added Tax ACt

Andhra Pradesh Value 2008-09 to 2011-12 40.17 Added Tax Act

Orissa Value Added 2011-12 & 2012-13 6,700.75 Tax Act

(d) There are no amounts that are due 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.

(viii) The accumulated losses of the Company at the end of the financial year are not less than fifty percent of its net worth and the Company has incurred cash losses during the financial year covered by our audit and in the immediately preceding financial year.(Also Refer Note 1B of Financial Statements)

(ix) In our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not borrowed from financial institutions and has not issued any debentures during the year.(Also Refer Note 5(ii) of Financial Statements)

(x) In our opinion and according to the information and explanations given to us, the terms and conditions of the guarantees given by the Company for loans taken

by others a bank are not, prima facie, prejudicial to the interest of the Company.

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

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

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm's Registration No.: 008072S)



M K Ananthanarayanan

Partner

Chennai, 28 May 2015 (Membership No.: 19521)


Mar 31, 2014

We have audited the accompanying financial statements of SHRIRAM EPC LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2014, the Statement of Profit and Loss for the Nine months ended 31st March, 2014 and the Cash Flow Statement for the period then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in Section 211(3C) of the Companies Act, 1956 ("the Act") (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs) and in accordance with the accounting principles generally accepted in India. This responsibility includes the design, implementation and maintenance of internal controls relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatements, whether due to fraud or error.

Auditors'' Responsibility

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

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 the internal controls relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

(b) in the case of the Statement of Profit and Loss, of the Loss of the Company for the Nine months ended 31st March, 2014 and

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

Emphasis of Matter

1. Attention is invited to Note 50 and Note 51 to the financial statements regarding the dues in respect of projects undertaken for two customers. As explained in the said notes, these projects are stalled and Company has not been able to make further progress. However, In the circumstance and for the reasons explained in these notes, the said dues are considered fully realisable by the Management.

2. Attention is drawn to Note No. 52 of the Financial Statements regarding Investments and Loans made to certain companies the aggregate of which as on 31st March 2014 exceed the limits approved by the Shareh0lders for each of such entities though the aggregate outstanding as on that date is within overall limit approved by the Shareholders.

Our opinion is not qualified in respect of above matters.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

(d) In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement comply with the Accounting Standards notified under the Act which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs.

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

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

1. Having regard to the nature of the Company''s business/activities/result, clauses (vi), (xii), (xiii), (xiv), (xix) and (xx) of paragraph 4 of the order are not applicable.

2. In respect of fixed assets:

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

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

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

3. In respect of its inventories:

(a) As explained to us, the inventories (other than contract work in progress) were physically verified by the Management at the period end.

(b) In our opinion and according to the

information and explanations given to us, the procedures of physical verification of inventories followed by the management were reasonable and adequate in relation to the size of the Company and the nature of its business.

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

4. In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted unsecured loans aggregating to Rs. 47,446.71 Lakhs to a party covered in the register maintained under Section 301 of the Companies Act, 1956 during the period. At the period-end, the outstanding balance of such loan was Rs. 36,338.16 Lakhs from the party and the maximum amount involved during the period was Rs. 36,916.95 Lakhs from the party.

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) The receipts of principal amounts and interest have been regular/as per stipulations.

(d) There are no overdue amounts as at the Balance Sheet date.

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

5. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchases of inventory, fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

6. To the best of our knowledge and belief and according to the information and explanations given to us, there are no contracts or arrangements that needed to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956.

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

8. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost

Accounting Records) Rules, 201 1 prescribed by the Central Government under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. According to the information and explanations given to us in respect of statutory dues:

(a) The Company has generally been regular in depositing undisputed statutory dues including Provident Fund, Employee State Insurance, Income Tax, Customs Duty, Value added tax, Works Contract Tax, Sales Tax, Wealth tax, Service Tax, Cess and other statutory dues applicable to it with the appropriate authorities during the period.

Further statutory dues in respect of Excise Duty are not applicable to the Company.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employee State Insurance, Income Tax, Customs Duty, Value added tax, Works Contract Tax, Sales Tax, Wealth tax, Service Tax, Cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

(c) Details of dues of Income Tax, Customs Duty, Value added tax, Works Contract Tax, Sales Tax, Wealth tax, Service Tax, Cess which have not been deposited as on 31st March, 2014 on account of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is pending

Income Tax Act, Income Tax, interest Commissioner 1961 and penalty of income tax ( Appeals )

Service Tax (Chapter Customs Excise and V of the Finance Act Service Tax and Service lax Appellate 1994) penalty Tribunal

Service Tax (Chapter V of the Finance Act Service Tax and Commissioner of 1994) penalty Service tax(Appeals)

Andhra Pradesh Value Added Tax Value Added Tax Act Supreme Court

Tamilnadu Value Value Added lax High Court added Tax Act

West Bengal Value Value Added Tax Joint Commissioner Added Tax Act (Appeals)

West Bengal Value Value Added Tax West Bengal Commercial Added Tax Act Taxes Appellate & Revisional Board

West Bengal Value Value Added Tax Ld. Joint Commissioner Added Tax Act (Appeals) of West Bengal Commercial Taxes

Jharkhand Value Value Added Tax Commercial Tax Officer Added Tax Act

Andhra Pradesh Value Added lax Appellate Authority Value Added Tax Act

Name of Statute Period to which the Amount amount relates involved (Rs. in lakhs)

Income Tax Act, 2005-06 to 1961 2010-2011 1,298.65

Service Tax (Chapter 2006-07 to V of the Finance Act 2008-09 207.67 1994)

Service Tax (Chapter 2008-09 V of the Finance Act to 114.54 1994) 2011-2012

Andhra Pradesh 2007-2008 to Value Added Tax 2009-2010 223.33

Tamilnadu Value 2008-09 to added Tax Act 2012-13 1,123.31

West Bengal Value 2008-09 & Added Tax Act 2010-11 500.39

West Bengal Value 2007-08 558.45 Added Tax Act

West Bengal Value 2008-09 to 408.39 Added Tax Act 2010-11

Jharkhand Value 2007-08 to 721.00 Added Tax Act 2008-09

Andhra Pradesh 2008-09 to 40.17 Value Added Tax Act 2011-12

10. The accumulated losses of the Company at the end of the financial period are not less than fifty percent of its net worth and the Company has incurred cash losses during the financial period covered by our audit and in the immediately preceding financial period.

11. In our opinion and according to the information and explanations given to us, the Company has not been regular in repayment of dues to banks and there have been defaults in repayment of principal and interest amounting to Rs. 17,600.46 Lakhs during the period and defaults in repayment of principal and interest amounting to Rs. 13,166.91 Lakhs outstanding as at 31st March, 2014. (Refer Note No. 5.3 and Note No. 8.3 of financial statements). The company has not borrowed from financial institutions and has not issued any debentures during the period.

12. In our opinion and according to the information and explanations given to us, the Company has given a guarantee, for loans taken by one party, from a bank during the period, the terms of which are prima facie not prejudicial to the interest of the company.

13. In our opinion and according to the information and explanations given to us, the term loans have been applied by the company during the period for the purposes for which they were obtained.

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

15. During the period, the Company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

16. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the period.

FOR DELOITTE HASKINS & SELLS Chartered Accountants Registration No: 008072S

M. K. Ananthanarayanan Place : Chennai Partner Date : 27th May, 2014 Membership No.19521


Jun 30, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of SHRIRAM EPC LIMITED ("the Company"), which comprise the Balance Sheet as at 30 June 2013, the Statement of Profit and Loss for the fifteen months ended 30 June 2013 and the Cash Flow Statement for the period then ended and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

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

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 the internal controls relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company''s internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 30 June 2013;

(b) in the case of the Statement of Profit and Loss, of the Loss of the Company for the fifteen months ended 30 June 2013 and

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

(e) On the basis of the written representations received from the directors as on 30 June 2013 taken on record by the Board of Directors, none of the directors is disqualified as on 30 June 2013 from being appointed as a director in terms of Section 274(1)(g) of the Act.

(Referred to in paragraph 1 under ''Report on Other Legal and Regulatory Requirements'' section of our report of even date)

1. Having regard to the nature of the Company''s business/activities/result, clauses (viii), (x), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are not applicable.

2. In respect of fixed assets:

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

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

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

3. In respect of its inventories:

(a) As explained to us, the inventories (other than contract work in progress) were physically verified by the Management at the period end.

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

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

4. In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted unsecured loans aggregating to Rs.29,941.97 Lakhs to three parties covered in the register maintained under Section 301 of the Companies Act, 1956 during the previous year. At the period-end, the outstanding balances of such loans aggregated to Rs.380.75 Lakhs from two parties and the maximum amount involved during the period was Rs.27,375.09 Lakhs from three parties.

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) The receipts of principal amounts and interest have been as per stipulations.

(d) There are no overdue amounts as at the Balance Sheet date.

In respect of loans, secured or unsecured, taken by the Company from companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has taken loans aggregating Rs.116,194 Lakhs from a party during the period. At the period-end, the outstanding balances of such loans taken aggregated Rs.5,008.60 lakhs and the maximum amount involved during the period was Rs.60,739.59 Lakhs.

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

(c) The payments of principal amounts and interest in respect of such loans are as per stipulations.

5. In our opinion and according to the information and explanations given to us, having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchases of inventory, fixed assets and the sale of goods and services. During the course of our audit, we have not observed any major weaknesses in such internal control system.

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

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

b) Where each of such transactions is in excess of Rs.5 lakhs in respect of any party, having regard to our comments in paragraph 5 above, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

7. In our opinion, the Company has an adequate internal audit system commensurate with the size of the Company and the nature of the 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 209(1)(d) of the Companies Act, 1956 and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. Statutory and other dues

According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues including Income Tax, Customs Duty, Value added tax, Works Contract Tax, Wealth tax and other statutory dues applicable to it with the appropriate authorities during the period except for some delays in remittances of Provident Fund, Employees State Insurance dues, Tax deducted at source, Service tax and Cess during the period.

Further statutory dues in respect of Excise Duty are not applicable to the Company.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employee''s State Insurance, Work Contract Tax, Income Tax, Value Added Tax, Customs Duty, Wealth tax, Service tax and Cess were in arrears, as at 30 June 2013 for a period of more than six months from the date they became payable.

10. In our opinion and according to the information and explanations given to us, the Company has not been regular in repayment of dues to banks and there have been defaults in repayment of principal amounting to Rs.820.10 Lakhs during the period and defaults in repayment of interest amounting to Rs.640.02 Lakhs outstanding as at 30 June 2013, which has subsequently been paid. (Refer Note No. 5.2 and Note No. 8.2 of financial statements). The company has not borrowed from financial institutions and has not issued any debentures during the period.

11. In our opinion and according to the information and explanations given to us, the Company has given guarantee, for loans taken by others, from banks during the period the terms of which are prima facie not prejudicial to the interest of the company.

12. In our opinion and according to the information and explanations given to us, the term loans have been applied by the company during the period for the purposes for which they were obtained.

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

14. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company has been noticed or reported during the period.

FOR DELOITE HASKINS & SELLS

Chartered Accountants

Registration No: 008072S

Geetha Suryanarayanan

Place : Chennai Partner

Date : August 29, 2013 Membership No.29519


Mar 31, 2012

1. We have audited the attached Balance Sheet of Shriram EPC Limited, as at March 31, 2012, the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on ouraudit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. The Company has investments in Sree Jayajothi Cements Limited (SJCL) in the nature of equity shares of Rs. 1,500.00 lakhs. In addition the SJCL has certain receivables due to the Company comprising of Trade receivables amounting to Rs.30,472.62 lakhs. These amounts aggregating to Rs.31,972.62 lakhs (net of Cheques in transit of Rs.30,164.00 Lakhs as referred to in Note No.52.2 in the financial statements)have been secured by assets of the SJCL (Refer Note No.52.2 of the Financial statements). The Company has since invested directly and through a Company in the group and has also drawn up a proposal for recovering its dues over a period of time. Accordingly, the company is hopeful of recovering all the amounts due to them. Pending the outcome of its proposals as mentioned above, the shortfall, if any, in the realization of the aforesaid trade receivables, adjustment if any, that may be required to the carrying value of the aforesaid equity shares is not presently ascertainable

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

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

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

(iii) 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;

(iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with bythis report are in compliance with the accounting standards referred to in sub-section (3C) of Section 21 1 of the Companies Act, 1 956;

(v) Subject to the effect on the financial statements in respect of matters referred to in paragraphs 4 above, which we are unable to determine, in our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant accounting policies and notes thereon give the information required by the Companies Act, 1 956 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 Balance Sheet, of the state of affairs of the Company as at 31 st March, 201 2;

b) In the case of the Statement of Profit and Loss, of the profit of the Company forthe year ended on that date.

c) In the case of the Cash Flow Statement, of the cash flows forthe yearended on that date.

6. On the basis of written representations received from the directors as on March 31, 201 2 taken on record bythe Board of Directors, none of the directors is disqualified as on March 31, 201 2 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1 956.

Annexure referred to in Paragraph 3 of the report of even date

i) Having regard to the nature of the Company's business/activities/result, clauses (viii), (x), (xi), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are not applicable.

ii) In respect of fixed assets:

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

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

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

iii) In respect of its inventories:

a) As explained to us, inventories (other than contract work in progress) were physically verified by the management at reasonable intervals.

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

c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories. The discrepancies noticed on physical verification between physical stock and book records were not material.

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

(a) The Company has granted unsecured loans, to three parties covered in the register maintained under Section 301 ofthe Companies Act, 1 956 during the previous year. At the year-end, the outstanding balances of such loans aggregated to Rs.3,484.81 Lakhs and the maximum amount involved during the year was Rs.4,020.24 Lakhs.

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests ofthe Company.

(c) There are no overdue amounts as at the Balance Sheet date.

(d) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 ofthe Companies Act, 1 956.

v) In our opinion and according to the information and explanations given to us , having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchases of inventory and the sale of goods and services. Howeverthe internal controls with regard to the purchases of fixed asset needs to be strengthened. During the course of our audit, we have not observed any major weaknesses in internal controls.

vi) In respect of contracts or arrangements entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1 956, to the best of our knowledge and belief and according to the information and explanations given to us:

a) The particulars of contracts or arrangements referred to Section 301 that needed to be entered in the Register maintained underthe said Section have been so entered.

b) Where each of such transactions is in excess of Rs.5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain services for which comparable quotations are not available and in respect of which we are unable to comment.

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

viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 201 1 prescribed bythe Central Government under Section 209(1 )(d) of the Companies Act, 1956 and are of the opinion that prima fade the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whetherthey are accurate or complete.

ix) Statutory and other dues

According to the information and explanations given to us in respect of statutory dues:

a) The Company has been generally regular in depositing undisputed statutory dues with slight delays including Provident Fund, Work Contract Tax, Income Tax, Value Added Tax, Customs Duty, Wealth tax, Service tax, Cess and other statutory dues applicable to it with the appropriate authorities during the year except in respect of Tax deducted at source and Employees State Insurance dues, where the company has not generally been regular in depositing the dues with the appropriate authorities though the delays in deposit have not been serious.

b) There were no undisputed amounts payable in respect of Provident Fund, Employee's State Insurance, Work Contract Tax, Income Tax, Value Added Tax, Customs Duty, Wealth tax, Sen/ice tax and Cess were in arrears with appropriate authorities, as at 31st March, 2012 for a period of more than six months from the date they became payable.

c) Details of dues of Income tax, Value added tax, Wealth Tax, Service Tax, Customs duty, Excise duty and Cess which have not been deposited as on 31st March, 2012 on account of disputes are given below:



Forum where Dispute is Period to which the Amount involved Statute Nature of Dues pending amaunt relates (Rs in lakhs)

Income Tax Income Tax Appellate Tribunal 1999-2000 48.08 Act demand

Income Tax Income Tax Appellate Tribunal 2001-2002 49.15 Act demand

Income Tax Income Tax Appellate Tribunal 2002-2003 155.33 Act demand

Income Tax Income Tax Commissioner of Income Tax 2003-2004 26.24 Act demand (Appeals)

Income Tax IncomeTax Commissioner of Income Tax act demand (Appeals) 2004-2005 298.48

Income Tax IncomeTax Commissioner of Income Tax 2005-2006 219.68 Act demand (Appeals)

Income Tax IncomeTax Commissioner of Income Tax 2006-2007 192.24 Act demand (Appeals)

Income Tax IncomeTax Commissioner of Income Tax 2007-2008 63.56 Act demand (Appeals)



x) In our opinion and according to the information and explanations given to us, the Company has given guarantee, for loans taken by a subsidiary company, associate company and joint venture company, from a bank during the year the terms of which are prima facie not prejudicial to the interest ofthe company.

xi) In our opinion and according to the information and explanations given to us, the term loans have been applied forthe purposes for which they were obtained.

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

xiii) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Registration No.008072S)

Geetha Suryanarayanan

Place : Chennai Partner

Date : 30th May, 2012 (Membership No. 29519)


Mar 31, 2011

1. We have audited the attached Balance Sheet of Shriram EPC Limited, as at March 31, 2011, the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date, both annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the Companies (Auditor's Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(i) 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;

(ii) 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;

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

(iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report are in compliance with the accounting standards referred to in sub-section (3C) of Section 21 1 of the Companies Act, 1956;

(v) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant accounting policies and notes thereon give the information required by the Companies Act, 1 956 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 Balance Sheet, of the state of affairs of the Company as at March 31, 2011 ;

b) In the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date.

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

5. On the basis of written representations received from the directors as on 31st March 2011 taken on record by the Board of Directors, none of the Directors is disqualified as on March 31st, 2011 from being appointed as a Director in terms of Clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

ANNEXURE TO THE AUDITORS' REPORT (Referred to in paragraph 3 of our report of even date)

1. Having regard to the nature of the Company's business/activities/result, clauses (viii), (x), (xi), (xii), (xiii), (xiv), (xviii), (xix) and (xx) of CARO are not applicable.

2. In respect of fixed assets:

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

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

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

3. In respect of its inventories:

(a) As explained to us, inventories (other than contract work in progress) were physically verified by the management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the company has maintained proper records of its inventories. The discrepancies noticed on physical verification between physical stock and book records were not material.

4. In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under Section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted unsecured interest free loan, to the party covered in the register maintained underSection 301 of the Companies Act,1956 during the previous year. At the year-end, the outstanding balances of such loans aggregated to Rs. 14,500,000, and the maximum amount involved during the year was Rs.14,500,000.

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) There are no overdue amounts as at the Balance Sheet date.

(d) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

5. In our opinion and according to the information and explanations given to us , having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchases of inventory and the sale of goods and services, however the internal controls with regard to the purchases of fixed asset needs to be strengthened. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

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

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

b) Where each of such transactions is in excess of Rs.5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain services for which comparable quotations are not available and in respect of which we are unab/e to comment.

7. In our opinion, the internal audit functions carried out during the year by firm of Chartered accountants appointed by the Management have been commensurate with the size of the Company and the nature of the business.

8. We have broadly reviewed the cost records maintained by the Company in respect of generation of electricity from windmill where pursuant to the Rules made by the Central Government, the maintenance of cost records has been prescribed under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the company.

9. Statutory and other dues

According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues with slight delays including Provident Fund, Work Contract Tax, Income Tax, Value Added Tax, Customs Duty, Wealth tax, Service tax, Cess and other statutory dues applicable to it with the appropriate authorities during the year except in respect of Tax deducted at source and Employees State Insurance dues, where the company has not generally been regular in depositing the dues with the appropriate authorities though the delays in deposit have not been serious.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employee's State Insurance, Work Contract Tax, Income Tax, Value Added Tax, Customs Duty, Wealth tax, Service tax and Cess were in arrears, as at 31 st March 201 1 for a period of more than six months from the date they became payable, (c) Details of dues of Income tax, Sales-tax, Wealth Tax, Service Tax, Customs duty, Excise duty and Cess which have not been deposited as on 31st March 2011 on account of disputes are given below:

Statute Nature of Forum where Period when Amount Dues Dispute is the amount involved pending relates (Rs.in Lakhs)

Income Income Tax Appellate 2000-01 48.08 Act demand Tribunal Tax

Income Income Tax Appellate 2002-03 49.15 Tax Act demand Tribunal

Income Income Tax Appellate 2003-04 155.33 Tax Act demand Tribunal

Income Income Tax Commissioner Tax Act demand of Income 2004-05 26.24 Tax (Appeals)

Income Income Tax Commissioner Tax Act demand of Income 2005-06 298.48 Tax (Appeals)

Income Income Tax Commissioner 2006-07 219.68 Tax Act demand of Income Tax (Appeals)

10. In our opinion and according to the information and explanations given to us, the Company has given guarantee, for loans taken by a Subsidiary Company, Associate Company and Joint Venture Company, from a bank during the year the terms of which are prima facie not prejudicial to the interest of the company.

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

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

13. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For DELOITTE HASKINS & SELLS Chartered Accountants (Registration No.008072S)

Geetha Suryanarayanan Partner (Membership No. 29519)

Place : Chennai Date : 25th May 2011


Mar 31, 2010

1. We have audited the attached Balance Sheet of Shriram EPC Limited, as at March 31, 2010, the Profit and Loss Account and Cash Flow of the Company for the year ended on that date, both annexed thereto. 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 the auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors Report) Order, 2003 issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

(i) 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;

(ii) 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;

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

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

(v) In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the significant accounting policies and notes thereon 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:

a) In the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2010;

b) In the case of the Profit and Loss Account, of the profit of the Company for the year ended on that date.

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

5. On the basis of written representations received from the directors as on 31st March 2010 taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub- section (1) of section 274 of the Companies Act, 1956 as on the said date;

ANNEXURE TO THE AUDITORS REPORT Annexure referred to in Paragraph 3 of the report of even date

1. Having regard to the nature of the Companys business/ activities/result, clauses (x), (xii), (xiii), (xiv), (xix) and (xx) of CARO are not applicable.

2. In respect of fixed assets:

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

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

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

3. In respect of its inventories:

(a) As explained to us, inventories (other than contract work in progress) were physically verified by the management at reasonable intervals.

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

(c) In our opinion and according to the information and explanations given to us, the Company has maintained proper records of its inventories. The discrepancies noticed on physical verification between physical stock and book records were not material.

4. In respect of loans, secured or unsecured, granted by the Company to companies, firms or other parties covered in the Register under section 301 of the Companies Act, 1956, according to the information and explanations given to us:

(a) The Company has granted unsecured interest free loan, to the party covered in the register maintained under Section 301 of the Companies Act, 1956 during the previous year. At the year-end, the outstanding balances of such loans aggregated to Rs. 1,45,00,000, and the maximum amount involved during the year was Rs. 1,45,00,000.

(b) The rate of interest and other terms and conditions of such loans are, in our opinion, prima facie not prejudicial to the interests of the Company.

(c) There are no overdue amounts as at the Balance Sheet date.

(d) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

5. In our opinion and according to the information and explanations given to us , having regard to the explanations that some of the items purchased are of special nature and suitable alternative sources are not readily available for obtaining comparable quotations, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to the purchases of inventory and the sale of goods and services, however the internal controls with regard to the purchases of fixed asset needs to be strengthened. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls.

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

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

b) Where each of such transactions is in excess of Rs. 5 lakhs in respect of any party, the transactions have been made at prices which are prima facie reasonable having regard to the prevailing market prices at the relevant time except in respect of certain purchases for which comparable quotations are not available and in respect of which we are unable to comment.

7. According to the information and explanations given to us, the Company has not accepted deposit from the public during the year.

8. In our opinion, the internal audit functions carried out during the year by firm of Chartered accountants appointed by the Management have been commensurate with the size of the Company and the nature of the business.

9. We have broadly reviewed the cost records maintained by the Company in respect of generation of electricity from windmill where pursuant to the Rules made by the Central Government, the maintenance of cost records has been prescribed under Section 209(1) (d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the records with a view to determining whether they are accurate or complete. To the best of our knowledge and according to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records for any other product of the Company.

10. Statutory and other dues : According to the information and explanations given to us in respect of statutory dues:

(a) The Company has been regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Work Contract Tax,

Income Tax, Value Added Tax, Customs Duty, Wealth Tax, Service Tax, Cess and other statutory dues applicable to it with the appropriate authorities during the year.

(b) There were no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Work Contract Tax, Income Tax, Value Added Tax, Customs Duty, Wealth Tax, Service Tax and Cess were in arrears, as at 31st March 2010 for a period of more than six months from the date they became payable.

(c) Details of dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited as on 31st March 2010 on account of disputes are given below:

Statute Nature of Dues Forum where Dispute is pending

Income Tax Act Income Tax demand Appellate Tribunal

Income Tax Act Income Tax demand Appellate Tribunal

Income Tax Act Income Tax demand Appellate Tribunal

Income Tax Act Income Tax demand Appellate Tribunal

Income Tax Act Income Tax demand Commissioner of Income Tax (Appeals )

Income Tax Act Income Tax demand Commissioner of Income Tax (Appeals )

Income Tax Act Income Tax demand Commissioner of Income Tax (Appeals )

Statute Period to which the Amount involved amount relates (Rs. in Lakhs)

Income Tax Act 2000-01 55.94

Income Tax Act 2001-02 21.59

Income Tax Act 2002-03 51.9

Income Tax Act 2003-04 163.25

Income Tax Act 2004-05 30.58

Income Tax Act 2005-06 340.53

Income Tax Act 2006-07 318.95

11. According to the information and explanations given to us by the management, we are of the opinion that the Company has not defaulted in repayment of dues to banks/financial institutions.

12. In our opinion and according to the information and explanations given to us, the Company has given guarantee, for loans taken by a subsidiary, associate and joint venture company from a bank during the year the terms of which are not prejudicial to the interest of the Company.

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

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

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

16. To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the Company was noticed or reported during the year.

For DELOITTE HASKINS & SELLS

Chartered Accountants

Registration No: 008072S



Geetha Suryanarayanan

Partner Membership No.29519

Place : Chennai

Date : 24th May 2010



 
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