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Auditor Report of STI India Ltd.

Mar 31, 2016

To,

The Members of STI India Limited

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of STI India Limited (“the Company”), which comprise the Balance Sheet as at 31 “ March 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the 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 (as amended). This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act; safeguarding the assets of the Company; 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

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

4. 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.

5. 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 standalone financial statements are free from material misstatement.

6. 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 controls relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

7. 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

8. 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 2016, and its profit/loss and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by the Companies (Auditor’s Report) Order, 2016 (“the Order”) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of the Order.

10. As required by Sectionl43(3) of the Act, we report that:

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

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

c. The standalone financial statements 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 (as amended);

e. On the basis of the written representations received from the directors as on 31" March, 2016 and taken on record by the Board of Directors, none of the directors is disqualified as on 31 “ March 2016 from being appointed as a director in terms of Section 64(2) of the Act;

£ We have also audited the internal financial controls over financial reporting (IFCOFR) of the Company as of 31“ March 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated 10* May 2016 as per Annexure II expressed.

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:

i. As detailed in Note 25 to the standalone financial statements, the Company has disclosed the impact of pending litigations on its standalone financial position;

ii. The company does 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.

h. Attention is also invited to;

NoteNo.37in "Notes to Account, regarding the standalone financial statements of the Company having been prepared on going concern basis, notwithstanding the fact that its net worth is completely eroded.

ANNEXURE I TO THE AUDITOR’S REPORT EVEN

DATE CARO 2016:

1. 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 have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

c. The title deeds in respect of all immovable properties are held in the name of the company.

2. In respect of Inventories:

As explained to us physical verification of inventory has been conducted during the year at reasonable intervals by the management and in our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories and no material discrepancies were noticed on physical verification.

3. In respect of loans, secured or unsecured granted by the Company to other Companies, firms, LLP or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

a. The terms and conditions of grant of such loans are not prejudicial to the interest of the Company.

b. The repayment of the principal are regular. Loan is given Interest free.

c. The amounts are payable on demand.

4. The Company has complied with the provisions of section 185 and 186 of the Companies Act, 2013 in respect of Loans granted during the year. There is no Investments, guarantees and securities taken place during the year.

5. During the year the company has not accepted any deposits from public or by any means hence the said clause 3(v) of the said order is not applicable to the Company.

6. As per the information and explanations provided to us, we are of the opinion that in pursuant to the prescribed rules by Central Government, the Company had maintained cost records u/s. 148(1) (d) of the Companies Act, 2013, however we have not done a detailed examination of the same.

7. In respect of Statutory Dues:

(a) According to record of the Company produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees" state insurance, income tax, sales tax, service tax, customs duty, excise duty, cess and other statutory dues applicable to it. According to the information and explanations given, no undisputed amounts payable in respect of Income-Tax, sales tax, service tax, customs duty, excise duty/cess were outstanding as at 31“ March, 2016 for a period of more than six months from the date they became payable except as given below:

Statement of Arrears of statutory dues outstanding for more than six months as at 31“ March 2016:

(Rs. in lacs)

S. No.

Nature of the Dues

Amount

Period to which amount relates

1.

Central Sales Tax

3.87

1995-96

2.

Central Sales Tax

12.65

1997-98

3.

Entry Tax

11.40

1996-97

4.

Entry Tax

4.04

1997-98

5.

Madhya Pradesh Sales Tax (M.P.S.T)

8.39

1997-98

Total

40.35

Outstanding Interest amount on the above dues (S. No 1 to 5) as on if March 2016 is Rs. 94.49 lacs.

(b) According to the records of the company there are no dues of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess which have not been deposited on account of any dispute except as given below.

_(Rs.in Lacs)

Nature of the Act

Nature of the Dues

Amount

Period to which the amount relates

Forum where dispute is pending

Central Sales Tax Act, 1956

Central Sales Tax Act, 1956 Central Sales Tax Act, 1944

Central Sales Tax Act, 1944 Income Tax Act, 1961

CST

Excise Duty Excise Duty

Excise Duty Income Tax

63.00

27.03

65.49

11.02

7.00

1995-96

September 2004 March 2004 to September 2004 2007-08 & 2008-09 2004-05

Writ Petition filed in M.P High Court In the High Court of M,P In the High Court of M.P

Additional Commissioner of Central Excise Indore

CIT (Appeals) Indore

Total

173.54

8. As per the information and explanations given to us the company has not taken loans from bank or financial institutions. The company has not defaulted in repayment of dues to debenture holders.

9. During the year the Company has not raised any fund by way of initial public offer or further public offer (including debt instruments) and term loans, therefore no comments under the clause are called for.

10. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

11. According to the provisions of section 197 read with Schedule V to the Companies Act, 2013, the Company has not paid any Managerial remuneration during the year, hence this clause is not applicable.

12. In our opinion and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is not a Nidhi company. Hence, in our opinion the clause does not apply to the company.

13. The Company has disclosed all the transactions with the related parties in the Financial Statements during the year and the transactions are in compliance with sections 177 and 188 of Companies Act, 2013.

14. During the year under consideration, the company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures, hence comments under this clause are not called for.

15. According to the provisions of section 192 of Companies Act, 2013 the company has not entered into any non-cash transactions with directors or persons connected with him during the year hence no comments under this clause are called for.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934, hence this clause is not applicable and no comments under this clause are called for.

ANNEXURE H TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE.

Independent Auditor’s report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

1. In conjunction with our audit of the standalone financial statements of STI India Limited (“the Company”) as of and for the year ended 31“ March 2016, we have audited the internal financial controls over financial reporting (IFCOFR) of the company of as of that date.

Management’s Responsibility for Internal Financial

Controls

2. The Company’s Board of Directors is responsible for establishing and maintaining internal financial controls based on the criteria being specified by management. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of the company’s business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company''s IFCOFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India (ICAI) and deemed to be prescribed under section 143 (10) of the Act, to the extent applicable to an audit of IFCOFR, and the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate IFCOFR were established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCOFR and their operating effectiveness. Our audit of IFCOFR included obtaining an understanding of IFCOFR, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s IFCOFR.

Meaning of Internal Financial Controls over Financial Reporting

6. A company''s IFCOFR is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s IFCOFR includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over

Financial Reporting

7. Because of the inherent limitations of IFC0FR, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCOFR to future periods are subject to the risk that IFCOFR may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31“ March 2016, based on the criteria being specified by management.

For V.K BESWAL & ASSOCIATES

Chartered Accountants

C A K.V. Beswal

Partner

Place: Mumbai Membership Number-131054

Date: lO01 May, 2016 Firm Registration No:101083W


Mar 31, 2015

We have audited the accompanying standalone financial statements of STI India Limited ("the Company"), which comprises the Balance Sheet as at March 31, 2015, 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 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 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 of the assets of the company 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 the 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 misstatements, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into 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 issued by the Institute of Chartered Accountants of India, as 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 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 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 audit opinion on the standalone financial statements.

Opinion

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

(a) In the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2015;

(b) In the case of statement of Profit and Loss, 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 year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("the Order") issued by the Central Government of India in terms of sub- section (11) of section 143 of the Act, we give in the Annexure 1 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 purpose of our audit;

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

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

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

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

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

i) The company has disclosed the impact of pending litigations on its financial position in its financial statements.

- Refer note 25 & 26 to the financial statements;

ii) The company does 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.

g) Attention is also invited to;

Note No.38 in "Notes to Account, regarding the standalone financial statements of the Company having been prepared on going concern basis, notwithstanding the fact that its net worth is completely eroded.

Annexure to the Auditor's Report even date (Referred to in paragraph 1 thereof)

1. In respect of Fixed Assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

2. In respect ofInventories:

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

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

3. In respect of loans, secured or unsecured granted by the Company to the companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013:

a) During the year Company has not granted any loans to parties covered in the register maintained under Section 189 of the Companies Act, 2013.

b) In view of our comments above, clause 4 (iii) (a), (b) of the said order is not applicable to the company.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system

5. According to the information and explanations given to us, the Company has not accepted any deposits from public.

6. As per the information and explanations provided to us, we are the opinion that in pursuant to the prescribed rules

by Central Government, the company had maintained cost records u/s. 148(1) (d) of the Companies Act, 2013, however we have not done a detailed examination of the same.

7. In respect ofStatutory Dues:

(a) According to record of the Company produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other statutory dues applicable to it.

(b) According to the information and explanations given, no undisputed amounts payable in respect of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess were outstanding as at 31.03.2015 for a period of more than six months from the date they became payable except as given below:-

Statement of Arrears of statutory dues outstanding for more than six months as at 31st March 2015:

S. Nature ofthe Dues Amount Period to which No. (Rs. in lacs) amount relates

1 Central Sales Tax 3.87 1995-96

2 Central Sales Tax 12.65 1997-98

3 Entry Tax 11.40 1996-97

4 Entry Tax 4.04 1997-98

5 Madhya Pradesh Sales Tax (M.P.S.T) 8.39 1997-98

Total 40.35

Outstanding Interest amount on the above dues (S. No 1 to 5) as on 31st March 2015 is Rs. 87.21 lacs.

(c) According to the records of the company there are no dues of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess which have not been deposited on account of any dispute except as given below.

Nature ofthe Act Nature ofthe Dues Amount Period to which (Rs. In Lacs) the amount relates

Central Sales Central Sales Tax 63.00 1995-96 Tax Act,1956

Central Sales Tax Excise Duty 27.43 September Act,1956 2004

Central Excise Excise Duty 65.49 March 2004 to Act, 1944 September 2004

Central Excise Excise Duty 11.02 2007-08 & Act, 1944 2008-09

Income Tax Income Tax 7.00 2004-05 Act, 1961

Total 173.54

Nature od the Act Forum where dispute is pending

Central Sales Tax Act 1956 Writ Petition filed in M.P. High Court.

Central Sales Tax Act 1956 CESTAT, New Delhi

Central Sales Excise Act In the High court of M.P. 1944

Central Sales Excise Act Additional Commissioner of Central 1944 Excise Indore

Income Tax Act 1961 CIT (Appeals), Indore

(d) According to the records of the company there are no amounts to be transferred to Investor Education & Protection Fund.

8. The accumulated losses of the Company have exceeded fifty percent of its net worth as at 31/03/2015.The company has incurred cash loss of Rs.79.10 lacs during the financial year covered by our audit but not in the immediately preceding financial year.

9. As per the information and explanations given to us the company has not taken loans from bank or financial institutions. There is no default in repayment of dues to debenture holders.

10. The company has given Corporate guarantees in connection with loan taken by holding company from banks. The terms and conditions of the guarantees given are not prejudicial to the interest of the company.

11. According to the records of the Company, the Company has not obtained any term loans during the year. Hence, comments under the clause are not called for.

12. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For V.K. Beswal & Associates Charted Accountants Placce: Mumbai CA K. V. Beswal Partner Date: 15th May, 2015 Membership No.131054


Mar 31, 2014

Report on the Financial Statements

We have audited the accompanying financial statements of STI India 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") accounting standards notified under the Companies Act, 1956 ("the Act") read with the general circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. 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 judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

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

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

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

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

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

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

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

d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in subsection (3C) of section 211 of the Companies Act, 1956 read with the general circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013;

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

Annexure to the Auditor''s Report even date

(Referred to in paragraph 1 thereof)

1. In respect of Fixed Assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

c) Based on our scrutiny of the records of the company and the information & explanation received by us, we report that there were sale of fixed assets during the year but the fixed assets disposed off did not constitute a substantial part of the fixed assets of the company.

2. In respect of Inventories:

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories 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 the companies, firms or other parties covered in the register maintained under Section 301 of the companies Act, 1956:

a) During the year Company has not granted any loans to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In view of our comments above, clause 4 (iii) (b), (c) & (d) of the said order is not applicable to the company.

c) During the year Company has taken loans from 1 party covered in the register maintained under Section 301 of the Companies Act, 1956 and the maximum amount outstanding during the year and the year-end balance is Rs. 975 lacs.

d) In our opinion and according to the information and explanations given to us, the terms and conditions, are not prima facie prejudicial to the interest of the Company.

e) In respect of the said loans, the same are repayable over a period of 5-7 years.

f) In respect of the said loans there is no overdue amount.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and fixed assets. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system.

5. In respect of the contracts or arrangements referred to in 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 to the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices, which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from public.

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

8. As per the information and explanations provided to us, we are the opinion that in pursuant to the prescribed rules by Central Government, the company had maintained cost records u/s. 209(1) (d) of the Companies Act, 1956, however we have not done a detailed examination of the same.

9. In respect of Statutory Dues:

a) According to record of the Company produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees'' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other statutory dues applicable to it.

b) According to the information and explanations given, no undisputed amounts payable in respect of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess were outstanding as at 31.03.2014 for a period of more than six months from the date they became payable except as given below:-

Statement of Arrears of statutory dues outstanding for more than six months as at 31st March 2014:

S. Nature of the Dues Amount Period to which No. (Rs. in lacs) amount relates

1 Central Sales Tax 3.87 1995-96

2 Central Sales Tax 12.65 1997-98

3 Entry Tax 11.40 1996-97

4 Entry Tax 4.04 1997-98

5 Madhya Pradesh Sales Tax (M.P.S.T) 8.39 1997-98

Total 40.35

Interest amount on the above dues (S. No 1 to 5) as on 31st March 2014 is Rs. 79.94 lacs.

(c) According to the records of the company there are no dues of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess which have not been deposited on account of any dispute except as given below :

Nature of the Act Nature of the Dues Amount (Rs. In Lacs)

Central Sales Central Sales Tax 63.00 Tax Act,1956

Central Sales Tax Central Sales Tax 1.43 Act,1956

Central Excise Excise Duty 27.03 Act, 1944

Central Excise Excise Duty 65.49 Act, 1944

Central Excise Excise Duty 11.02 Act, 1944

Income Tax Income Tax 7.00 Act, 1961

Total 174.97

Nature of the Act Period to which Forum where dispute is the amount pending relates

Central Sales 1995-96 Writ Petition filed in Tax Act,1956 M.P. High Court.

Central Sales Tax 2004-05 Appeal filed in M.P. Act,1956 Commercial Tax Appellate Board Bhopal

Central Excise September CESTAT, New Delhi Act, 1944 2004

Central Excise March 2004 In the High court Act, 1944 to September of M.P 2004

Central Excise 2007-08 & Additional Act, 1944 2008-09 Commissioner, of Central Excise Indore

Income Tax 2004-05 CIT (Appeals) Act, 1961 Indore

10. The accumulated losses of the Company have exceeded fifty percent of its net worth as at 31/03/2014.The company has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. As per the information and explanations given to us the company has not obtained any loan from banks & financial institution. Hence, comments under the clause are not called for.

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

13. In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is neither a Chit Fund nor a nidhi/mutual benefit society. Hence, in our opinion, the requirements of para 4 (xiii) of the Order do not apply to the company.

14. As per records of the company and information and explanations given to us by the management, company is not dealing or trading in shares, securities, debentures and other investments.

15. The company has given Corporate guarantees in connection with loan taken by holding company from banks. The terms and conditions of the guarantees given are not prejudicial to the interest of the company.

16. According to the records of the Company, the Company has not obtained any term loans during the year. Hence, comments under the clause are not called for.

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

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. During the period covered by audit report the company has not issued any debentures.

20. During the year the company has not raised any money by way of public issue.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For V.K. Beswal & Associates Chartered Accountants

CA K.V Beswal Partner Place: Mumbai M. No. 131054 Date : 05th May, 2014 Firm Registration No.: 101083W


Mar 31, 2013

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

Management's Responsibility forthe Finaneial 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. Forming an Opinion and Repotting on Financial Statements of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and arc 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 judgement, 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 arc appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and die reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

(b) In the case of the Profit and Loss Account, of the profit' loss forthe year ended on that date; and

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

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

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

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

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

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

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

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

Annexure to the Auditor's Report even date (Referred to in paragraph 1 thereof)

1. In respect of Fixed Assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

c) Based on our scrutiny of the records of the company and the information & explanation received by us, we report that there were sale of fixed assets during the year but the fixed assets disposed off did not constitute a substantial part of the fixed assets of the company.

2. In respect of Inventories:

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories 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 the companies, firms or other parties covered in the register maintained under Section 301 of the companies Act, 1956:

a) During the year Company has not granted any loans to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In view of our comments above, clause 4 (iii) (b), (c) & (d) of the said order is not applicable to the company.

c) During the year Company has taken loans from 1 party covered in the register maintained under Section 301 of the Companies Act, 1956 and the maximum amount outstanding during the year is 1975 lacs and the year-end balance is *975 lacs.

d) In our opinion and according to the information and explanations given to us, the rate of interest, where applicable and other terms and conditions, are not prima facie prejudicial to the interest of the Company.

e) In respect of the said loans, the same are repayable on demand and there is no repayments schedule.

f) In respect of the said loans, the same are repayable on demand and therefore the question of overdue amounts docs not arise. In respect of interest, where applicable there are no overdue amounts.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and fixed assets. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system.

5. In respect of the contracts or arrangements referred to in 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 to the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices, which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from public.

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

8. As per the information and explanations provided to us, we

* are the opinion that in pursuant to the prescribed rules by Central Government, the company had maintained cost records u/s. 209( 1) (d) of the Companies Act, 1956, however we have not done a detailed examination of the same.

9. In respect of Statutory Dues:

a) According to record of the Company produced before us, die Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection Kind, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other statutory dues applicable to it.

b) According to the information and explanations given, no undisputed amounts payable in respect of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess were outstanding as at 31.03.2013 for a period of more than six months from the date they became payable except as given below:-

Statement of Arrears of statutory dues outstanding for more than six months as at 31 st March 2013:

S. Nature of the Dues Amount Period to which No. (Rs in lacs) amount relates

1 Central Sales Tax 3.87 1995-96

2 Central Sales Tax 12.65 1997-98

3 Entry Tax 11.40 1996-97

4 Entry Tax 4.04 1997-98

5 Madhya Pradesh Sales 8.39 1997-98 Tax (M.P.S.T)

Total 40.35

Interest amount on the above dues (S. No 1 to 5) as on 31 st March 2013 is Rs 72.68 lacs.

(c) According to the records of the company there are no dues of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess which have not been deposited on account of any dispute except as given below.

Name of the Nature of Use Due Amount Act (Rs in Lacs

Central Sale Central Sales Tax 63.00 Tax Act, 1956

Central Sale Central Sales Tax 1.43 Tax Act. 1956



Central Excise Excise Duty 27.03 Act, 1944

Central Excise Excise Duty 65.49 Act, 1944

Central Excise Excise Duty 11.02 Act, 1944

Income Tax Income Tax 7.00 Act, 1961

Total 174.97

Name of the Period to which Forum where dispute Act the amount is Pending

Central Sale 1095-96 Writ Petition filed in Tax Act, 1956 M.P. I ligh Court.

Central Sale 2004-05 Appeal filed in M.P. Tax Act. 1956 Commercial Tax Appellate Board Bhopal

Central Excise September CESTAT, New Delhi Act, 1944 2004

Central Excise March 2004 In the High court Act, 1944 to September of M.P 2004

Central Excise 2007-08 & Additional Act, 1944 2008-09 Commissioner, of Central Excise

2004-05 CIT(Appcals) Income Tax Indore Act, 1961

Total

10. The accumulated losses of the Company have exceeded fifty percent of its net worth as at 31.03.2013.The company has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. As per the information and explanations given to us the company is generally regular in making the repayments due to banks & financial institution and as at March 31, 2013 there is no overdue amount.

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

13. In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is neither a Chit Fund nor a nidhi/mutual benefit society. Hence, in our opinion, the requirements of para 4 (xiii) of the Order do not apply to the company.

14. As per records of the company and information and explanations given to us by the management, company is not dealing or trading in shares, securities, debentures and other investments.

15. The company has given Corporate guarantees in connection with loan taken by holding company from banks. The terms and conditions of the guarantees given are not prejudicial to the interest of the company.

16. According to the records of the Company, the Company has not obtained any term loans during the year. Hence, comments under the clause are not called for.

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

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. During the period covered by audit report the company has not issued any debentures.

20. During the year the company has not raised any money by way of public issue.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

ForV. K. Beswal & Associates Chartered Accountants

CA R. P. Laddha Partner Membership No. 48195 Firm Rcgn. No. I0I083W


Mar 31, 2012

We have audited the attached Balance Sheet of STI India Limited as at 31st March, 2012, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date 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.

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

1. As required by the Companies (Auditor's Report) Order, 2003 as amended issued by the Central Government in terms of sub-Section (4A) of Section 227 of the Companies Act, 1956. We enclose in the annexure hereto a Statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

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

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

i) In so far as it relates to the Balance Sheet of the state of affairs of the Company as at March 31, 2012.

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

iii) In so far as it related to the Cash Flow Statement, of the Cash Flows for the year ended on that date.

1. In respect of Fixed Assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

c) Based on our scrutiny of the records of the company and the information & explanation received by us, we report that there were sale of fixed assets during the year but the fixed assets disposed off did not constitute a substantial part of the fixed assets of the company.

2. In respect of Inventories:

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories 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 the companies, firms or other parties covered in the register maintained under Section 301 of the companies Act, 1956:

a) During the year Company has not granted any loans to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In view of our comments above, clause 4 (iii) (b), (c) & (d) of the said order is not applicable to the company.

c) During the year Company has taken loans from 1 party covered in the register maintained under Section 301 of the Companies Act, 1956 and the maximum amount outstanding during the year is Rs 15.90 crores and the year- end balance is Rs 7.25 crores.

d) In our opinion and according to the information and explanations given to us, the rate of interest, where applicable and other terms and conditions, are not prima facie prejudicial to the interest of the Company.

e) In respect of the said loans, the same are repayable on demand and there is no repayments schedule.

f) In respect of the said loans, the same are repayable on demand and therefore the question of overdue amounts does not arise. In respect of interest, where applicable there are no overdue amounts.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and fixed assets. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system.

5. In respect of the contracts or arrangements referred to in 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 to the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices, which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from public.

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

8. As per the information and explanations provided to us, we are the opinion that in pursuant to the prescribed rules by Central Government, the company had maintained cost records u/s. 209(1) (d) of the Companies Act, 1956, however we have not done a detailed examination of the same.

9. In respect of Statutory Dues:

a) According to record of the Company produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other statutory dues applicable to it.

b) According to the information and explanations given, no undisputed amounts payable in respect of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess were outstanding as at 31.03.2012 for a period of more than six months from the date they became payable except as given below:-

Statement of Arrears of statutory dues outstanding for more than six months as at 31st March 2012:

Sl. Nature of the Dues Amount Period to which

No. (Rs in lacs) amount relates

1 Central Sales Tax 3.87 1995-96

2 Central Sales Tax 12.65 1997-98

3 Entry Tax 11.40 1996-97

4 Entry Tax 4.04 1997-98

5 Madhya Pradesh Sales Tax (M.P.S.T) 8.39 1997-98

Total 40.35 _

Interest amount on the above dues (S. No 1 to 5) as on 31st March 2012 is Rs 65.41 lacs.

(c) According to the records of the company there are no dues of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess which have not been deposited on account of any dispute except as given below.

Nature of the Act Nature of the Dues Amount Period to which Forum where dispute is

(RsIn Lacs) the amount pending

relates

Central Sales Central Sales Tax 63.00 1995-96 Writ Petition filed in

Tax Act,1956 M.P High Court.

State Sales Tax State Sales Tax 2.88 1997-98 Writ Petition No.

Act 1068 / 2003 pending

before M.P High Court

Central Sales Tax Central Sales Tax 1.43 2004-05 Appeal filed in M.P.

Act,1956 Commercial Tax

Appellate Board Bhopal

M. P. Vat Vat 0.45 2009-10 Additional

Act, 2002 Commissioner of

Tax Appeals, Indore

Central Excise Excise Duty 2129.07 March 2004 Commissioner of

Act, 1944 to September Customs & Central

2008 Excise

Central Excise Excise Duty 27.03 September CESTAT, New Delhi

Act, 1944 2004

Central Excise Excise Duty 65.49 March 2004 In the High court

Act, 1944 to September of M.P

2004

Central Excise Excise Duty 11.02 2007-08 & Additional

Act, 1944 2008-09 Commissioner, of

Central Excise Indore

Income Tax Income Tax 7.00 2004-05 CIT (Appeals)

Act, 1961 Indore

Total 2307.37

10. "In our opinion, the accumulated losses of the Company are more than its net worth reflecting erosion of its entire net worth". The company has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. As per the information and explanations given to us the company is generally regular in making the repayments due to banks & financial institution and as at March 31, 2012 there is no overdue amount.

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

13. In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is neither a Chit Fund nor a nidhi/mutual benefit society. Hence, in our opinion, the requirements of para 4 (xiii) of the Order do not apply to the company.

14. As per records of the company and information and explanations given to us by the management, company is not dealing or trading in shares, securities, debentures and other investments.

15. 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.

16. According to the records of the Company, the Company has not obtained any term loans during the year. Hence, comments under the clause are not called for.

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

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. During the period covered by audit report the company has not issued any debentures.

20. During the year the company has not raised any money by way of public issue.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For V.K. Beswal & Associates

Chartered Accountants

CA R.P. Laddha

Partner

Place: Mumbai M. No. 48195

Date : 04.05.2012 Firm Registration No.: 101083W


Mar 31, 2011

We have audited the attached Balance Sheet of STI India Limited as at 31st March, 2011, the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date 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.

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

1. As required by the Companies (Auditor's Report) Order, 2003 as amended issued by the Central Government in terms of sub-Section (4A) of Section 227 of the Companies Act, 1956. We enclose in the annexure hereto a Statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

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

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

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

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

e) On the basis of written representations received from directors as on March 31, 2011 and taken on record by the Board of Directors, we report that none of the Directors are disqualified as on March 31, 2011 from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956.

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

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

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

iii) In so far as it related to the Cash Flow Statement, of the Cash Flows for the year ended on that date.

Annexure to the Auditor's Report even date (Referred to in paragraph 1 thereof)

1. In respect of Fixed Assets:

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

b) The fixed assets have been physically verified by the management at reasonable intervals during the year. We are informed that no material discrepancies were noticed by the management on such verification.

c) Based on our scrutiny of the records of the company and the information & explanation received by us, we report that there were sale of fixed assets during the year but the fixed assets disposed off did not constitute a substantial part of the fixed assets of the company.

2. In respect of Inventories:

a) As explained to us physical verification of inventories has been conducted during the year by the management at reasonable intervals.

b) In our opinion, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanation given to us, the Company is maintaining proper records of its inventories 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 the companies, firms or other parties covered in the register maintained under Section 301 of the companies Act, 1956:

a) During the year Company has not granted any loans to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

b) In view of our comments above, clause 4 (iii) (b), (c) & (d) of the said order is not applicable to the company.

c) During the year Company has taken loans from 2 parties covered in the register maintained under Section 301 of the Companies Act, 1956 and the maximum amount outstanding during the year is Rs. 23.05 crores and the year-end balance is Rs 15.90 crores.

d) In our opinion and according to the information and explanations given to us, the rate of interest, where applicable and other terms and conditions, are not prima facie prejudicial to the interest of the Company.

e) In respect of the said loans, the same are repayable on demand and there is no repayments schedule.

f) In respect of the said loans, the same are repayable on demand and therefore the question of overdue amounts does not arise. In respect of interest, where applicable there are no overdue amounts.

4. In our opinion and according to the information and explanations given to us, there is adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and fixed assets. Further, on the basis of our examination of the books and records of the company, carried out in accordance with the auditing standards generally accepted in India and according to the information and explanations given to us, we have neither come across nor have we been informed of any continuing failure to correct weaknesses in the aforesaid internal control system.

5. In respect of the contracts or arrangements referred to in 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 to the register required to be maintained under that section.

b) In our opinion and according to the information and explanations given to us, transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Act and exceeding the value of Rupees Five Lakhs in respect of any party during the year, have been made at prices, which are prima facie reasonable having regard to the prevailing market prices at the relevant time.

6. According to the information and explanations given to us, the Company has not accepted any deposits from public.

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

8. As per the information and explanations provided to us, we are the opinion that in pursuant to the prescribed rules by Central Government, the company had maintained cost records u/s. 209(1) (d) of the Companies Act, 1956, however we have not done a detailed examination of the same.

9. In respect of Statutory Dues:

a) According to record of the Company produced before us, the Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other statutory dues applicable to it.

b) According to the information and explanations given, no undisputed amounts payable in respect of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess were outstanding as at 31.03.2011 for a period of more than six months from the date they became payable except as given below:-

Statement of Arrears of statutory dues outstanding for more than six months as at 31st March 2011:

S. Nature of the Dues Amount Period to which No. (Rs. in lacs) amount relates

1 Central Sales Tax 3.87 1995-96

2 Central Sales Tax 12.65 1997-98

3 Entry Tax 11.40 1996-97

4 Entry Tax 4.04 1997-98

5 Madhya Pradesh Sales Tax (M.P.S.T) 8.39 1997-98

6 Sales tax against C-form 0.21 2009-10

Total 40.56

Interest amount on the above dues (S.No 1 to 4) as on 31st March 2011 is Rs. 45.30 lacs.

(c) According to the records of the company there are no dues of Income-Tax, sales tax, wealth tax, service tax, customs duty, excise duty/cess which have not been deposited on account of any dispute except as given below.

Nature of the Nature of the Amount Period to Forum where Act Dues (Rs. In which dispute is Lacs) the pending amount relates

Central Sales Central Sales 66.88 1995-96 Writ Petition Tax Act,1956 Tax filed in Tax M.P. High Court.

State Sales State Sales 11.28 1997-98 Writ Petition Tax Act Tax No.1068 / 2003 pending before M.P High Court

Central Sales Central Sales 11.43 2004-05 Appeal filed Tax Act Tax in M.P.,1956 Commercial Tax Appellate Board Bhopal

Central Excise Excise Duty 2129.07 March 2004 Commissioner Act, 1944 to Septe Customs & mber Central 2008 Excise Central Excise Excise Duty 27.03 September CESTAT, New Act, 1944 2004 Delhi

Central Excise Excise Duty 65.49 March 2004 In the High Act, 1944 to court of M.P September 2004

Central Excise Cenvat credit 11.24 October Additional Act, 1944 Service tax to March Commissioner, 2008 Custom, Centr al Excise, Service tax Indore

Total 2312.42

10. "In our opinion, the accumulated losses of the Company are more than its net worth reflecting erosion of its entire net worth". The company has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

11. As per the information and explanations given to us the company is generally regular in making the repayments due to banks & financial institution and as at March 31, 2011 there is no overdue amount.

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

13. In our opinion, and to the best of our information and according to the explanations provided by the management, we are of the opinion that the company is neither a Chit Fund nor a nidhi/mutual benefit society. Hence, in our opinion, the requirements of para 4 (xiii) of the Order do not apply to the company.

14. As per records of the company and information and explanations given to us by the management, company is not dealing or trading in shares, securities, debentures and other investments.

15. 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.

16. According to the records of the Company, the Company has not obtained any term loans during the year. Hence, comments under the clause are not called for.

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

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. During the period covered by audit report the company has not issued any debentures.

20. During the year the company has not raised any money by way of public issue.

21. Based upon the audit procedures performed and information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the course of our audit.

For V. K. Beswal & Associates Chartered Accountants

CA R. P. Laddha Partner Membership No. 48195 Firm Regn. No. 101083W

Place: Mumbai Date : June 4, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of STI India Limited as at 31st March, 2010, the Profit and Loss Account and the Cash Flow Statement 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.

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

We report that:

1. As required by the Companies (Auditors Report) Order, 2003 as amended by Companies (Auditors Report) (Amendment) Order 2004 (together the Order) issued by the Central Government in terms of Section 227(4A) of the Companies Act, 1956 (the "Act"), and on the basis of such checks as were considered appropriate and according to the information and explanations given to us, we enclose in the annexure hereto a Statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph 1 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 comply with the accounting standards as referred to in section 211 (3C) of the Companies Act, 1956 except for:

-Non Compliance of Accounting Standards 26 "Intangible Asset" in respect of amortization of computer software (Ref. Schedule No. 25, Note No. J 5) and

-Non Compliance of Accounting Standard 1 "Disclosure of Accounting Policies" in respect of Interest amounting to Rs. 2.41 crores on delayed payments to suppliers being accounted for on cash basis. (Ref. Schedule No. 25, Note No. 14).

v) The Company has not redeemed the Optionally Convertible Debentures Series-2, (which became due on 16th October 2007), Series-1 & 3 (which became due on OlndAugust 2008) and series 4 (which became due on 16th October 2008), apparently the provisions of clause (g) of sub- section (1) of Section 274 of the Companies Act, 1956 are attracted due to such default. The management is of the firm belief that the default in redeeming the debentures is merely technical in nature, since economic ownership of the Optionally Convertible Debentures and Majority Share-holding of the company are held by the same Investors. Further, the management has obtained a legal opinion also on the same, according to which the provisions of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 are not applicable due to non obstante clause contained in provision of section 22 and 32 of Sick Industrial Company (SpecialProvision) Act, 1985.

Given the legal opinion and views express by the management, we have refrained from expressing our opinion on the applicability of said section to the directors of the company.

vi) Attention is drawn to

(a) Note No. 7 of Schedule 25 regarding failure of the company to redeem the OCDs on its due dates.

(b) Note No. 8 of Schedule 25 regarding transfer of all series of Optionally Convertible Debentures by the debenture holders to a third party.

(c) Note No. 9 of Schedule 25 regarding waiver of interest due and payable on Optionally Convertible Debentures by the debenture holders.

(d) Note No. 10 of Schedule 25 regarding waiver of principal outstanding amounting to Rs. 28.18 crores by the debenture holders on the Optionally Convertible Debentures due and payable by the company.

(e) Note No. 12 of Schedule 25 regarding the changes in the Accounting Policy of valuation of closing stock. As a result of change in the Accounting Policy, the value of closing stock has decreased by Rs. 14,4 7,399/-.

(f) Note No. 14 of Schedule 25 regarding accounting of Interest amounting to Rs. 2.41 crores on delayed payments to suppliers on cash basis.

(g) Note No. 15 of Schedule 25 regarding Non Compliance of Accounting Standard 26 "Intangible Asset" in respect of amortization of computer software.

(h) Note No. 18 of Schedule 25 regarding non- provision of Wealth tax liability in the books of accounts.

(i) Point No. 9(b) of the report annexed regarding tax liability amounting Rs. 40.77 lacs outstanding for a period of more than six months.

*(j) Point No. 10 of the report annexed regarding the accumulated losses of the Company exceeding its net worth reflecting erosion of entire net worth.

(k) Point no. 11 of the report annexed regarding default to the extent Rs. 141 crores in respect of Optionally Convertible Debentures (all series).

(l) Point no. 21 of the report annexed regarding certain financial transactions read with point no. 19 of the notes to accounts. cumulatively resulting in overstatement of loss for the year byRs. 14.47 lacs.

vii)Subject to our comments in paragraph 2(vi) above, in our opinion, and to the best of our information and according to the explanations given to us, the said accounts read together with the Notes appearing in Schedule 25, 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 accented in India.

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

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in paragraph 1 of our report of even date to the members of STI India Limited for the year ended 31st March, 2010)

1. a) The Company has maintained proper records showing particulars, quantitative details and situation of its fixed assets.

b) The company has a programme of physical verification of its fixed assets which, in our opinion, is reasonable having regard to the size of the company and the nature of its assets. Management has physically verified the fixed assets according to the programme and no discrepancies have been noticed on such verification as compared to book records.

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 as such the disposal, has not affected the going concern status of the Company.

2. a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable having regard to the nature of business and particular circumstances.

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

c) In our opinion and information and explanation given to us, the company has maintained proper records of inventories and no material discrepancies were noticed on physical verification.

3. a) According to the information and explanations given to us the company during the year, the company has taken unsecured loans from two companies covered in the register to be maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs.87 lacs and the year-end balance of loan taken from such party was Nil.

b) In our opinion, the rate of interest and other terms and conditions of loan taken from companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956 are not prima facie, prejudicial to the interest of the company.

c) In respect of the aforesaid loans, the company is regular in repaying the principal amounts as stipulated, where applicable and has been regular in the payment of interest.

d) According to the information and explanations given to us the company during the year has not granted 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. Accordingly, the provisions of clauses 4(iii) (b) to (d) of the Order are not applicable.

4. In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the company and nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls system of the company.

5. a) As explained to us, there are no contracts or arrangements that need to be entered into the register maintained under Section 301 of the Companies Act, 1956. b) According to the information and explanations given to us, there are no transactions made in pursuance of contracts or arrangements required to be entered in the register maintained under Section 301 of the Companies Act, 1956.

6. The company has not accepted any deposits from the Public within the meaning of section 58A & 58AA of the Companies Act, 1956 and rules framed thereunder.

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

8. We have broadly reviewed the books of accounts relating to material, labour and other items of cost maintained by the company pursuant to the Rules made by Central Government for the maintenance of cost records under section 209(l)(d) of the Companies Act, 1956 and we are of the opinion that prima facie the prescribed accounts & records have been made and maintained.

9. (a) According to the information and explanations given to us and the records of the company examined by us, in our opinion, undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs duty, excise duty, cess and other statutory dues have been generally regularly deposited with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the company examined by us, no undisputed amounts, except the fallowings payable in respect of income tax, sales tax, wealth tax, service tax, customs duty, excise duty and cess, were in arrear as at 31.03.2010 for a period of more than six months from the date they became payable.

Statement of Arrears of statutory dues outstanding for more than six months as at 31st March 2010:

S. Nature of the Dues Amount Period to which No. (Rs. in lacs) amount relates

1 Central Sales Tax 3.87 1995-96

2 Central Sales Tax 12.65 1997-98

3 Entry Tax 11.40 1996-97

4 Entry Tax 4.04 1997-98

5 Madhya Pradesh Sales Tax (M.P.S.T) 8.39 1997-98

6 Sales tax against C-form 0.42 2009-10

Total 40.77

Interest amount on the above dues (S.No I to 4) as on 31st March 2010isRs. 39.55lacs.

(c) According to the information & explanation given to us, the following statutory dues of the company have not been deposited on account of disputes:

Nature of the Nature of the Dues Amount (Rs. In Lacs)

Central Sales Central Sales Tax 66.88 Tax Act.1956

State Sales Tax State Sales Tax 11.28 Act

Central Sales Tax Central Sales Tax 1.43 Act,1956

Central Excise Excise Duty 2129.07 Act, 1944

Central Excise Excise Duty 27.03 Act, 1944

Central Excise Excise Duty 65.49 Act, 1944

Central Excise Cenvat credit of 11.24 Act, 1944 Service tax



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

Central Sales Tax Act.1956 1995-96 Writ Petition filed in MP. High Court.

State Sales Tax Act 1997-98 Writ Petition No. 1068/ 2003 pending before M.P High Court

Central Sales Tax Act,1956 2004-05 Appeal filed in M.P. Commercial Tax Appellate Board Bhopal

Central Excise Act, 1944 March 2004 Commissioner of to September Customs & Central 2008 Excise

Central Excise Act, 1944 September CESTAT, New Delhi 2004

Central Excise Act, 1944 March 2004 In the High court to September of M.P 2004

Central Excise Act, 1944 October 2005 Additional to March Commissioner, 2008 Custom, Central Excise, Service tax Indore

10. "In our opinion, the accumulated losses of the Company are more than its net worth reflecting erosion of its entire net worth". During the current financial year the company has not incurred cash losses. However, during the immediately preceding financial year, to the current financial year, the company has incurred cash losses.

11. According to the records of the company examined by us and the information and explanation given to us, the company has defaulted in repayment of dues to debenture holders.

In respect of Optionally Convertible Debentures (all series) amounting to Rs. 141 crores, the company has defaulted in redemption of such debentures falling due on or before 16- 10-2008, the detail of such are given below. However, post balance sheet date, in the month of October, 2010, the debenture holders have waived the principal amounting to Rs. 28.18 crores and outstanding interest due to them payable by the company and thereafter transferred these OCDs to a third party. The company has also defaulted in payment of interest thereon, however, post balance sheet, the debenture holders have also waived the interest due thereon.

Date of OCD Series Amount Date of allotment (Rs in Crores) maturity

02-02-07 OCD 1 22.90 02-08-08

16-04-07 OCD 2 13.00 16-10-07

02-02-07 OCD 3 5.10 02-08-08

16-04-07 OCD 4 100.00 16-10-08

141.00

12 Based on our examination of the records and the information & explanations given to us, the company has not granted any loans and / or advances on the security by way of pledge of shares, debentures and other securities. Accordingly, the provisions clause 4 (xii) of the order are not applicable.

13. In our opinion, the provisions of clause 4(xiii) of the order are not applicable to the company, as the company is not a chit fund company or nidhi / mutual benefit fund / society.

14. In our opinion, the company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the order are not applicable to the company.

15. According to the information and explanations given to us, during the year the company has not given any guarantee for loans taken by others from banks and financial institutions.

16. In our opinion, and according to the information and explanations given to us, the company has not taken any term loan during the year.

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

18. The company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

19. During the year the company has not issued any debentures.

20. The Company has not raised any money by public issues during the year.

21. During the course of our examination of the books and records of the company, carried out in accordance with generally accepted auditing practices in India, we have read with point no. 19 of the notes to accounts neither come across any instance of fraud on or by the company, noticed or reported during the year, nor have we been informed of such cases by the management.

For Vikas Kochhar & Associates

Firm Registration No.: 014536N Chartered Accountants

Vikas Kochhar

Partner

M. No. 87054

Place: New Delhi

Date: 25th November, 2010

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