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Auditor Report of Siel Financial Services Ltd.

Mar 31, 2015

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

Management's Responsibility for the Standalone 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 referred specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these 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 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 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 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 qualified audit opinion.

Basis for Qualified Opinion

(i) The 5% Cumulative Redeemable Preference Shares of Rs 7,30,00,000 were due for redemption on 12th January, 2007. As per Section 55 of the Companies Act, 2013 (in read with Section 80 of the earlier applicable Companies Act, 1956), as applicable, such preference shares shall be redeemed either out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption. The Company has yet not created Capital Redemption Reserve due to insufficient profits, required for the redemption of 5% Cumulative Redeemable Preference Shares of Rs 7,30,00,000 on 12th January, 2007 nor it redeemed the same by issuing fresh capital as per applicable new promulgated Section 55 of the Companies Act, 2013 (in read with Section 80 of the earlier applicable Companies Act, 1956). In view of above, there is contravention of Section 55 of the Companies Act, 2013. The same has also been explained in Note-1(vii) to the financial statements.

(ii)We have analyzed following factors :-

(a) The Company is not carrying on any business from considerable time due to paucity of funds. The operations of the Company are restricted to realization of debtors or advances. Besides, the Company has invested its surplus deposits with banks which are yielding interest income. There is no employee in the company.

(b) Reserve Bank of India has already rejected the Non Banking Financial Companies (NBFC) License and is Company accordingly is not allowed to carry Non Banking Financial Business; and

(c) The Company incurred a net loss of Rs. 3,58,693/- for the year ended 31st March, 2015 (Previous year Rs. 3,39,013/-) and accumulated loss as on 31st March, 2015 stands to Rs. 22,34,09,218/-(Previous year Rs. 22,30,50,525/-). As on 31st March, 2015, the Company's current liabilities exceeded its current assets by Rs. 1,48,02,721/- (Previous year Rs. 1,44,72,916/-) and its total liabilities exceeded to its total assets by Rs. 3,71,79,323/ - (Previous year Rs. 3,68,20,630/-). In view of these, the Company had been reporting negative operating cash flows for few years which have also contributed to constraints of working capital. These conditions have resulted into acute working capital deficit & have casted material uncertainty on functioning of Company.

As stated by the management the accounts of the company have been prepared on a "going concern" basis on an assumption & premises made by the management that adequate finances and opportunities would be available in the foreseeable future to enable the company to start operating on a profitable basis. In view of the above, the accounts of the Company have been prepared on a going concern basis. Refer Note-18.

Appropriateness of the "going concern basis" is dependent on the ability of the company to generate adequate finances to meet its obligations and to operate profitably which in our opinion after considering aforesaid factors indicate material uncertainty which further raises significant and substantial doubt on the ability of the Company to continue as a going concern and therefore, it may be unable to realize its assets and discharge its liabilities in the normal course of business. If the Company is treated not to be a going concern, then the valuation of assets has to be not merely on the basis of historical cost less depreciation or impairment but at a value which the assets would fetch, if the same are lower than the value presently shown. The Company has not attempted to assess the realizable value of the assets and therefore financial results for the year ended 31st March, 2015 have been prepared on a going concern basis and do not include any adjustments relating to the recoverability and classification of recorded asset amounts or to amounts or classification of liabilities that may be necessary if the Company is unable to continue as a going concern.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, 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 31st March 2015, and its profit/ loss and its cash flows for the year ended on that date

Emphasis of Matter

We draw your attention to Note No-17 to the financial statements on Contingent Liability for non-payment of Cumulative Preference Dividend of Rs 6,28,20,000. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit except for the matters described in the Basis for Qualified Opinion paragraph;

b. Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph above, 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 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 going concern matter described in sub-paragraph (ii) under the qualified opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

f. On the basis of written representations received from the directors as on March 31, 2015, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164 of the Companies Act, 2013.

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, 2015, in our opinion and to the best of our information and according to the explanations given to us :-

i. The Company does not have any pending litigations which would impact its financial position.

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

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

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph (1) of our report on other legal and regulatory requirements of Independent Auditor's Report of even date)

Annexure referred to in paragraph (1) of the report on other legal and regulatory requirements of Independent Auditor's Report to the members of Siel Financial Services Limited on the financial statements for the year ended March 31, 2015

1) In respect of Fixed Assets:- a) The company has maintained 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. No material discrepancies were noticed on such verification.

2) In respect of Inventories:

a) During the year, the inventories comprising of shares, debentures and other securities have been physically verified by the management. In our opinion, the frequency of verification is reasonable.

b) In our opinion and according to the information and explanations given to us, the procedures for physical verification of inventory of shares, debentures and other securities followed by the management were reasonable and adequate in relation to the size of the company and the nature of its business.

c) On the basis of our examination of the records of inventories of shares, debentures and other securities, the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3) The Company has not granted loans to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act, 2013,

4) In our opinion and according to the information and explanation provided to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of its fixed assets, purchase of inventory and sale of goods and services. Further on the basis of our examination of books and the records of the company, and according to the information and explanations given to us, we have neither come across nor have been informed about any continuing failure on the part of the management to correct major weaknesses in the aforesaid internal control procedures.

5) The company has not accepted any deposits from the public and consequently, the directives issued by Reserve Bank of India, the provisions of section 73 to 76 of the Companies Act, 2013 and rules framed under are not applicable during the year ended 31st March, 2015.

6) According to information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under clause (d) of sub-section (1) of section 148 of the Companies Act, 2013, in respect of business carried out by the Company.

7) In respect of statutory dues:

a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including provident fund, employees' state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31st March, 2015 for a period of more than six months from the date of becoming payable.

b) According to the information and explanations given to us and the records of the company produced before us, there were no dues in respect of Sales Tax, Income-tax, Custom Duty, Wealth Tax, Excise Duty, and Cess as at March 31, 2015, which have not been deposited on account of a dispute and pending before appropriate authorities.

c) There is no amount which is required to be transferred to investor education and protection fund in accordance with relevant provisions of the Companies Act, 1956 and rules there-under.

8) The accumulated losses at the end of the financial year exceed 50% of its net worth and the Company has incurred cash loss during the financial year covered by our audit. During the preceding financial year ending 31st March, 2014 also, Company incurred cash loss.

9) The company has not taken any loan or advances from any financial institution or bank so this clause is not applicable and no need to comment on the same.

10) The company has not given any guarantee for loans taken by others from bank or financial institutions and therefore rest of the sub-clause is inapplicable and has not been commented upon.

11) According to the information and explanations given to us and on an overall examination of the books of accounts of the company, we report that no term loan was taken during the year ended 31st March, 2015. Accordingly rest of the clause is not applicable on the company and has not been commented upon.

12) According to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the course of our audit.

For V Sahai Tripathi & Co. Chartered Accountants

Firm's Registration Number : 000262N

(Manish Mohan) Place : New Delhi Partner

Dated : 29th May, 2015 Membership No. 91607


Mar 31, 2014

W e have audited the accompanying financial statements of SIEL Financial Services Limited ("the Company''), which comprise the Balance Sheet as at March 31,2014,-and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. W e 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 entity''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 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.

Basis for Qualified Opinion

(i) The 5% Cumulative Redeemable Preference Shares of Rs 7,30,00,000 were due for redemption on 12* January, 2007. As per Section 80 of the Companies Act, 1956, as applicable, such preference shares shall be redeemed either out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption. The Company has not created Capital Redemption Reserve due to insufficient profits, required for the redemption of 5% Cumulative Redeemable Preference Shares of Rs 7,30,00,000 on 12* January, 2007 nor it redeemed the same by issuing fresh capital. In view of above, there is contravention of Section 80 of the Companies Act, 1956. The same has also been explained in Note-1 (vii) to the financial statements. In view of this non compliance, company & every officer of the company is in default as perthe provisions of Companies Act, 1956.

(ii) We have analyzed following factors :-

(a) The accounts of the company have been prepared on a "going concern" basis on an assumption & premises made by the management that adequate finances and opportunities would be available in the foreseeable future to enable the company to start operating on a profitable basis which Company is stating from so many year''s without providing concrete plan to revive the Company. The Company is not carrying on any business due to paucity of funds. The operations of the Company are restricted to realization of debtors or advances. Besides, the Company has invested its surplus deposits with banks which are yielding interest income;

(b) Reserve Bank of India has already rejected the Non Banking Financial Companies (NBFC) License and is Company accordingly is not allowed to carry Non Banking Financial Business; and

(c) The Net Worth of the Company has been eroded completely as the Accumulated deficit of the Company as at 31* March, 2014 stood at Rs. 22,30,50,525 (Previous year Rs.22,27,11,512) as compared to Share Capital and Reserve and Surplus of Rs(.3,68,20,630) (Previous year Rs.(3,64,81,617)) as on that date.

As aforesaid, the accounts have been compiled by the management on the basis of going concern as stated in Note Number-17, however after considering aforesaid factors, in our opinion the continuity of the Company as a Going Concern is doubtful. If the Company is treated not to be a going concern, then the valuation of assets has to be not merely on the basis of historical cost less depreciation but at a value which the assets would have fetched, if such values were to be lower than the value presently shown. The Company has not attempted to assess the realizable value of the assets and therefore, we are unable to express ouropinion on the impact on the accounts.

AUDITORS''REPORT

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 loss for the year ended on that date; and

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

Emphasis of Matter

We draw your attention to Note No-16 to the financial statements on Contingent Liability for non-payment of Cumulative Preference Dividend of Rs 5,91,70,000. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

b. except for the matter described in the Basis for Qualified Opinion paragraph, 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. except for the effects of the matter described in the Basis for Qualified Opinion paragraph and Emphasis of matter paragraph, 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 Companies Act, 1956.

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

1) In respectof Fixed Assets :-

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

(b) We are informed that a major portion of fixed assets, other than assets given on lease has been verified by the management in accordance with phased program of verification adopted by the company. In our opinion, the frequency of verification is reasonable having regard to the size of the company and nature of its fixed assets.

(c) During the yearthe Company has not disposed off or retired orwritten off any substantial assets.

2) In respect of Inventories:

a) During the financial year ending 31-March-2014, there were no Inventories maintained by the Company, except inventories comprising of shares, debentures.

b) During the year, the inventories comprising of shares, debentures and other securities have been physically verified by the management. In our opinion, the frequency of verification is reasonable.

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

d) On the basis of our examination of the records of inventories, the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the company to/ from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956: -

(a) According to the information and explanations given to us, the company has taken unsecured loans/Inter Corporate Deposit from one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year- end balances of such advance aggregates to Rs. 365.88 lacs which is same in both the cases.

(b) No interest is payable to Holding Company on the amount of Loan. This Loan is Interest Free. The other terms and conditions of loan taken by the company are prima-facie not prejudicial to the interest of the company.

(c) Company is not required to pay interest on the unsecured loan as it is interest free.

(d) To the best of our knowledge and according to the information and explanations given to us, the Company has not granted any unsecured loan(s) to any party, firms or Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(e) Accordingly, the rest of the sub-clauses are not applicable to the Company during the reporting period ending 31 -March-2014.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business with regard to purchases and sales of stocks of shares and purchase of fixed assets. There is no sale of services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weaknesses in the aforesaid internal control system.

5. ln respect of transactions covered under Section 301 of the Companies Act, 1956:-

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

b. However, no transaction covered under Section 301 of the Companies Act, 1956, have been entered during the year ending 31-March-2014. Accordingly the rest of the clause is not applicable.

6. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58Aand 58AAor any other relevant provisions of the Companies Act, 1956 to the extent applicable with regard to the deposits accepted from the public. As per the information and explanations given to us, no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India, any other court or any other tribunal with regard to fixed deposits.

7. The company does not have an average annual turnover exceeding five wore rupees for a period of three consecutive financial years immediately preceding the financial year concerned, nor the paid up capital & reserves of the Company are more than Rs 50 Lacs. Since the company a listed entity it is mandatory for the Company to conduct Internal Audit commensurate with its size and nature of business. No Internal Audit as mandated by this clause has been conducted by the management of the Company since insignificant volume of work and accordingly, we are unable to comment on the same.

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1 )(d) of the Companies Act, 1956.

9. In respectof statutory dues:

a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including income Tax and other material statutory dues as applicable, with the appropriate authorities. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues where outstanding as at 31 * March, 2014 for a period of more then six months from the date of becoming payable.

(b) According to the information and explanations given to us and the records of the company produced before us, there were no dues in respect of Sales Tax, Income-tax, Custom Duty, Wealth Tax, Excise Duty, and Cess as at March 31,2014, which have not been deposited on account of a dispute and pending before appropriate authorities.

10. According to the records of the company, the Company''s accumulated losses are in excess of fifty percent of the net worth of the company. The company has incurred cash losses during the financial yearended March 31,2014 as well as during the financial year ending 31st March, 2013(after excluding the balances written off of Rs 642,864).

11. The Company has no borrowings from financial institutions, banks, or debenture holders. Therefore there is no default in repayment of dues.

12. The Company has not granted loans and advances on the basis of security by way of pledge of shares and other securities. Accordingly, clause 4(xii) of the order is not applicable.

13. The company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

14. According to the information and explanations given to us, the Company is dealing or trading in shares, securities, debentures. Company has maintained proper records of the transactions and contracts and timely entries been made therein. The shares, securities, debentures and other long- term investments have been held by the company in its own name.

15. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, clause 4(xv) of the order is not applicable.

16. In our opinion and based on the information and explanation given to us, no term loans were borrowed during the year and consequently, the provisions of clause 4 (xvi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

17. According to the information and explanation given to us, the Company has not raised any funds on short-term basis. All assets have been funded by shareholder''s funds.

18. During the year, the company has not made any preferential allotment of share to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4(xviii) of the order is not applicable.

19. The company has not issued any debentures. Accordingly, clause 4(xix) of the order is not applicable.

20. The company has not raised any money by way of public issue during the year. Accordingly, clause 4(xx) of the order is not applicable.

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

For V. Sahai Tripathi &Co. Chartered Accountants Firm''s Registration Number: 000262N

(Manish Mohan) Place: New Delhi Partner Dated: 28th May, 2014 Membership No. 91607


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of SIEL Financial Services Limited ("the Company''), which comprise the Balance Sheet as at March 31,2013, and the Statement of Profit and Loss and Cash Flow Statement for the yearthen ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

Auditor''s Responsibility

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

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

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

Basis for Qualified Opinion

The 5% Cumulative Redeemable Preference Shares of Rs 7,30,00,000 were due for redemption on 12* January, 2007. As per Section 80 of the Companies Act, 1956, such preference shares shall be redeemed either out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption. The Company has not created Capital Redemption Reserve due to insufficient profits, required for the redemption of 5% Cumulative Redeemable Preference Shares of Rs 7,30,00,000 on 1T January, 2007 nor it redeemed the same by issuing fresh capital. Preference Shares cannot be issued for the tenure of more than 10 years and aforesaid Preferences Shares are already outstanding for redemption beyond ten years which is not in line with Section 80 of the Companies Act, 1956. The same has been explained in Note-1 (vii) to the financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph, 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 loss for the year ended on that date; and

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

Emphasis of Matter

We draw your attention to Note No-17 to the financial statements indicating that the accounts of the company have been prepared on the basis that the company is a going concern although the ability of the company to continue its operation in the foreseeable future is dependent on the improvement of the related market conditions and financial position of the company. Our opinion is not qualified in respect of this matter.

We draw your attention to Note No-16 to the financial statements on Contingent Liability for non-payment of Cumulative Preference Dividend of Rs 5,55,20,000. Our opinion is not qualified in respect of this matter.

We draw attention to Note 1(vii) to the financial statement which describes the uncertainty, related to the outcome of the non compliance of Section 80 of the Companies Act, f956 where the company, and every office of the company is in default. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

b. except for the matter described in the Basis for Qualified Opinion paragraph, 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 ofaccount;

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 Companies Act, 1956.

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

ANNEXURE TO THE AUDITORS'' REPORT

(Referred to in paragraph (3) of our report of even date)

Annexure referred to in paragraph (3) of Auditor''s Report to the members of Siel Financial Services Limited on the financial statements for the year ended March SI, 2013

1. In respect of Fixed Assets :-

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

(b) We are informed that a major portion of fixed assets, other than assets given on lease has been verified by the management in accordance with phased program of verification adopted by the company. In our opinion, the frequency of verification is reasonable having regard to the size of the company and nature of its fixed assets.

(c) During the year the Company has not disposed off or retired or written off any substantial assets.

2. In respect of Inventories:

a) During the financial year ending 31-March-2013, there were no Inventories maintained by the Company, except inventories comprising of shares.

b) During the year, the inventories comprising of shares have been physically verified by the management. In our opinion, the frequency of verification is reasonable.

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

d) On the basis of our examination of the records of inventories, the company is maintaining proper records of inventory and no material discrepancies were noticed on physical verification.

3. In respect of loans, secured or unsecured, granted or taken by the company to/ from companies, firms or other parties covered in the register maintained undersection 301 of the Companies Act, 1956:-

(a) According to the information and explanations given to us, the company has taken unsecured loans/Inter Corporate Deposit from one company covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year and the year-end balances of such advance aggregates to Rs. 365.88 lacs which is same in both the cases.

(b) No interest is payable to Holding Company on the amount of Loan. This Loan is Interest Free. The other terms and conditions of loan taken by the company are prima-facie not prejudicial to the interest of the company.

(c) Company is not required to pay interest on the unsecured loan as it is interestfree.

(d) To the best of our knowledge and according to the information and explanations given to us, the Company has not granted any unsecured loan(s) to any party, firms or Companies covered in the register maintained under Section 301 of the Companies Act, 1956.

(e) Accordingly, the rest of the sub-clauses are not applicable to the Company during the reporting period ending 31 -March-2013.

4. In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and nature of its business with regard to purchases and sales of stocks of shares and purchase of fixed assets. There is no sale of services. Further, on the basis of our examination and according to the information and explanations given to us, we have neither come across nor have been informed of any instance of major weaknesses in the aforesaid internal control system.

5. lnrespectoftransactionscoveredunderSection301 of the Companies Act, 1956:-

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

b. However, no transaction covered under Section 301 of the Companies Act, 1956, have been entered during the year ending 31-March-2013. Accordingly the rest of the clause is not applicable.

6. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of sections 58Aand 58AA or any other relevant provisions of the Companies Act, 1956 to the extent applicable with regard to the deposits accepted from the public. As per the information and explanations given to us, no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India, any other court or any other tribunal with regard to fixed deposits.

7. The company does not have an average annual turnover exceeding five crore rupees for a period of three consecutive financial years immediately preceding the financial year concerned, however the paid up capital & reserves of the Company are more than Rs 50 Lacs. Considering the volume of work, the internal control, system is commensurate with its size and nature of its business.

8. According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under section 209(1)(d)oftheCompaniesAct, 1956.

9. In respect of statutory dues:

a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, the company is generally regular in depositing the undisputed statutory dues including Income Tax and other material statutory dues as applicable, with the appropriate authorities. According to the information and explanations given to us, no undisputed amount payable in respect of the aforesaid dues where outstanding as at 31" March, 2013 for a period of more then six months from the date of becoming payable.

(b) According to the information and explanations given to us and the records of the company produced before us, there were no dues in respect of Sales Tax, Income-tax, Custom Duty, Wealth Tax, Excise Duty, and Cess as at March 31,2013, which have not been deposited on account of a dispute and pending before appropriate authorities

10. According to the records of the company, the Company''s accumulated losses are in excess of fifty percent of the net worth of the company. The company has incurred cash losses (after excluding the balances written off of Rs 642,864) during the financial year ended March 31,2013 as well as during the financial year ending 31st March, 2012.

11. The Company has no borrowings from financial institutions, banks, or debenture holders. Accordingly the clause is not applicable to the Company.

12. The Company has not granted loans and advances on the basis of security byway of pledge of shares and other securities. Accordingly, clause 4(xii) of the order is not applicable.

13. The company is not a chit fund or a nidhi / mutual benefit fund/ society. Therefore, clause 4(xiii) of the Companies (Auditor''s Report) Order 2003 is not applicable to the company.

14. According to the information and explanations given to us, during the year, the company has not entered into any transactions of dealing or trading in shares, securities, debentures and other investments. Shares and securities already held as stock in trade, have been held by the company in its name.

The shares and securities, debentures and other long-term investments which have been held by Company as Long-Term Investments, have been held by the company in its own name.

15. In our opinion, and according to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions during the year. Accordingly, clause 4(xv) of the order is not applicable.

16. In our opinion and based on the information and explanation given to us, no term loans were borrowed during the year and consequently, the provisions of clause 4 (xvi) of the Companies (Auditor''s Report) Order, 2003 are not applicable to the company.

17. According to the information and explanation given to us, the Company has not raised any funds on short-term basis. All assets have been funded by shareholder''s funds.

18. During the year, the company has not made any preferential allotment of share to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, clause 4(xviii) of the order is not applicable.

19. The company has not issued any debentures. Accordingly, clause 4(xix) of the order is not applicable.

20. The company has not raised any money byway of public issue during the year. Accordingly, clause 4(xx) of the order is not applicable.

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



For V. Sahai Tripathi &Co.

Chartered Accountants

Firm''s Registration Number: 000262N



(Manish Mohan)

Place : New Delhi Partner

Dated : 28" May, 2013 Membership No. 91607

 
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