Auditor Report of SVOGL Oil Gas and Energy Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of Shiv-vani Oil & Gas Exploration Services Limited (the "Company"), which comprise the Balance Sheet as at 31st March,2015, and the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management's Responsibility for the standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,2013(" the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standard Specified under Section 133 of the Act, read with Rule 7 of the Companies(Accounts) Rules,2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities, the 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 misstatement, whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provision 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 thereudner.

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors' 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 auditors consider internal control relevant to the Company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies(Auditor's Report) Order,2015 ("the order") issued by the Central Government of India in term of Sub-Section(11) of Section 143 of the Act(hereinafter referred to as the "Order") and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in the paragraphs 3 and 4 of the Order.

2. As required by Section 143(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 accounts 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 Cash Flow Statement dealt with by this Report are in agreement with books of account:

(d) In our opinion, the aforesaid standalone financial statement comply with the Accounting Standards under Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014;

(e) On the basis of written representations received from the directors as on 31st March 2015, and taken on records by the Board of Directors, none of the directors are disqualified as on 31st March 2015, from being appointed as a director in terms of clause(g) of sub-section(2) of section 164 of the Act.

(f) With respect to the other matters to be include in the Auditor Report in accordance with Rule 11 of the Companies (Audit and Auditor's) 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 31-5(a) to 5(f) to the financial statements.

(ii) There has been no delay in transferring amount required to be transferred to the Investors Education and Protection

Fund to the extent legally allowed to be transferred

Annexure to the Auditor's Report of Shiv-Vani Oil & Gas Exploration Services Ltd

The Annexure referred to in our report to the Members of Shiv-vani Oil & Gas Exploration Services Ltd for the year ended on 31st March,2015. We report that,

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

(ii) A major portion of fixed assets has been physically verified by the management during the year. In our opinion, the frequency of verification of the fixed assets by the management is reasonable having regards to the size of the Company and the nature of its assets. The discrepancies noticed have been properly dealt with in the books of accounts.

2. (i) The management has conducted physical verification of inventory at reasonable intervals.

(ii) In our opinion and according to the information and explanations given to us, the procedure for physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(iii) In our opinion Company has maintained proper records of inventory and no material discrepancies were noticed on physical verification.

3. In respect of the loans, secured or unsecured, granted or taken by the Company to/from Companies, firm or other parties in the register maintained under section 189 of the Companies Act, 2013.

(i) The Company has given interest free loan to Corporate/ to its subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs.3,689,918,331/-

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

(iii) The said interest free loan given to a wholly owned subsidiary of the Company are repayable on demand and there is no repayment schedule.

(iv) In respect of the loan given by the Company to the corporate, the same is repayable on demand the questions of overdue amount does not arise.

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 sale of goods and services . During the course of our audit, no continuing major weakness has been noticed in the internal control systems;

5. The Company has not accepted any deposits from the public.

6. In our opinion and according to the information and explanations given to us the Central Government has not prescribed maintenance of cost records under section 148 (1) of the Companies Act 2013 in respect of the Company's products.

7. (a) As per the records of the Company and information and explanations provided to us, the Company is not regular in depositing the undisputed statutory dues including Provident Fund, Investor Educaton and Protection fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, WCT. Tax deduct at sources, Customs Duty, Excise Duty, Cess and other Statutory dues with appropriate authorities. According to the information and explanations given to us, no un disputed amounts payable in respect of the aforesaid dues were outstanding as at March 31,2015 for a period of more than six months from the date of becoming payable except Tax Deducted at source dues aggregating to Rs.46,507,048/-(Previous year Rs.64,590,336/-) VAT dues aggregating to Rs.42,302,658/- (Previous year 45,062,958/-), Work Contract Tax dues aggregating to Rs.11,727,696/- (Previous Year Rs.10,670,375/- ), professional Tax dues aggregating to Rs.2,481,030/-( Previous Year Rs.1,625,791/-), Dividend Distribution Tax dues aggregating Rs.7,520,832/-(Previous Year Rs.7,520,832/-) Provident Fund dues aggregating Rs.Nil (Previous Year Rs.6,710,598/) and Services Tax dues aggregating to Rs.835,695,272/-(Previous year Rs.1,420,782,067/-) were payable at the year end.

(b) Following are the details of disputed statutory dues that have not paid to the concerned authorities

Nature of Statute Nature of Dues Amount (Rs.) Pending

Service Tax Demand 479,531,062

Service Tax Demand 317,919,573

Central Excise Penal Proceeding 1,250,000

Income Tax Act Income Tax 338,567,479

Nature of Statute Period to which Forum where dispute is Pending the amount relates Pending

Service Tax Upto 2007-2008 Service Tax Appellate Tribunal

Service Tax 2010-2013 Service Tax Commissioner

Central Excise 2007-2008 High Court

Income Tax Act 2005-06 to ITAT, New Delhi 2008-09

(c) According to the information and explanation given to us, no amount is required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Act.

8. The Company have accumulated losses of Rs.135,08,70,182/ at the end of the Financial year .Resulting in the fully erosion of Net-worth of the Company and it has incurred cash loss during the financial year amounting Rs.306,98,53,734/-.

9. As per books and records maintained by the Company and according to the information and explanation given to us, the Company has defaulted in repayment of loans and interest dues to financial institutions or Bank amounting to Rs.360.58 crores which is reflected under note-4 "Long term borrowing" - "Secured" - "from Banks" and under note no 10-'Other Current Liabilities' - 'Current maturities of long term Debts' - in the financial statement.

10. According to the information and explanations given to us, the Company has not given security / guarantee for any loan taken by others from banks & financial institutions.

11. The Company has not raised any term loans during the year.

12. In our opinion and according to the information and explanations given to us by the management which have been relied upon by us, no fraud on or by the Company has been noticed or reported during the year.

For Vijay Prakash Gupta & Associates Chartered Accountants Firm Reg. No:005570N

Vikas Varshney New Delhi Partner June 6, 2015 Membership No:510929

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Mar 31, 2014

We have audited the accompanying financial statements of Shiv-Vani Oil & Gas Exploration Services Limited (the "Company"), which comprise the Balance Sheet as at 31st March,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, which we have signed under reference to this report.

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 accounting principles generally accepted in India, including the Accounting Standards notified under the Companies Act,1956, read with General Circular 8/2014 dated 4 April 2014 issued by the Ministry of Corporate Affairs. 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.

Auditors'' Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with 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 auditors'' 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 auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

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

a. in the case of the Balance Sheet, of the State of affairs of the Company as at 31st March 2014;

b. in the case of the Statement of the 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) 0rder,2003; as amended by the Companies (Auditor''s Report)(Amendment) 0rder,2004; issued by the Central Government of India in term of Sub-Section(4A) of Section 227 of the Act(hereinafter referred to as the "Order") and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in the 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 accounts 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 dealt with by this Report are in agreement with books of account:

d. In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards notified under the Companies Act,1956, read with General Circular 8/2014 dated 4 April 2014 issued by the Minsitry of Corporate Affairs;

e. On the basis of written representations received from the directors as on 31st March 2014, and taken on records by the Board of Directors, none of the directors is disqualified as on 31st March2014, from being appointed as a director in terms of clause(g) of sub-section(1) of section 274 of the Act.



ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 7 of the Independent Auditors'' Report of even date to the member of Shiv-vani Oil & Gas Exploration Services Ltd on the financial statement as of and for the year ended 31st March, 2014.

I. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets. no material discrepancies were noticed on such physical verification.

c) In our opinion the Company has not disposed of a substantial part of its fixed assets during the year and therefore, the going concern status of the Company is not affected.

II. In respect of its inventories:

a) As explained to us, the inventory of store & Spare parts, except goods in transit, lying at different sites, have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the Company and the nature of the Company and the nature of its business.

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

c) The Company has maintained proper records of inventory, as explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records

III. In respect of the loans, secured or unsecured, granted or taken by the Company to/from Companies, firm or other parties in the register maintained under section 301 of the Companies Act,1956;

a) The Company has given interest bearings loan to corporate/interest free to its subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs2,806,335,291/-.

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

c) The said interest free loan given to a wholly owned subsidiary of the Company and there is no repayment schedule.

d) In respect of the loan given by the Company to the corporate, the same is repayable on demand the question of overdue amount does not arise.

e) The Company has taken new loans during the year.

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

V. In respect of the contracts or arrangements referred to section 301 of the Companies act, 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section301 of the Companies Act,1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, there are certain transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act,1956 aggregating during the year to Rs.5,00,000/- or more in respect of any party in the said financial year. The prices at which these have been made are reasonable having to the prevailing prices at that time.

VI. According to the information and explanations to us, the Company has not accepted any deposits from the public. Therefore the provision of Clause (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

VIII. Maintenance of cost records has not been prescribed by central government under section 209 (1) (d) of the Companies Act, 1956.

IX. In respect of statutory dues:

a) According to the records the Company is not regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees, State Insurance, Income Tax, Sales Tax, Wealth Tax, Work Contract Tax, Tax deduct at Sources, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities. According to the information and explanations given to us, no un disputed amounts payable in respect of

the aforesaid dues were outstanding as at March31,2014 for a period of more than six months from the date of becoming payable except Tax deduct at source dues aggregating to Rs.17,51,25,632/-(Previous year Rs.12,90,08,864/-) VAT dues aggregating to Rs.4,50,62,958/-(Previous Year Rs. 1,75,68,135/-), Work Contract Tax dues aggregating to Rs.1,06,70,375/-(Previous year Rs. 57,44,111/-) Professional Tax dues aggregating to Rs.17,09,095/-(Previous Year Nil) Dividend Distribution Tax dues aggregating Rs.75,20,832/-(Previous Year Nill) Provident Fund dues aggregating to Rs.67,10,598/- (Previous Year Nil) And Service Tax dues aggregating to Rs.142,07,82,067/- (Previous Year 127,22,44,795/- were payable at the year end.

b) Following are the details of disputed statutory due that have not Paid to the concerned authorities.

Name of the Nature of Amount Statute pending Dues (Rs.)

Service tax Demand 47,95,31,062

Central Excise Penal Proceeding 1,250,000

Income Tax Act Income Tax 33,85,67,479



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

Service tax 2007-08 Service Tax Appellate Tribunal

Central Excise 2007-08 High Court & Custom

Income Tax Act 2005-06 to 2008-09 Commissioner of Income tax 1961 (Appeals) New Delhi.

X. The Company does not have accumulated losses at the end of the financial year. The Company has incurred cash loss during the financial year amounting to Rs. 4,58,44,0,565/-.

XI. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the payments to Bank, Financial institutions were delayed .

XII. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provisions of clause (xiii) of the Companies (Auditor Report) 0rder,2003 are not applicable to the Company.

XIV. The Company is not dealing or trading in shares, securities, debentures and other investments as such the provision of the clause are not applicable to the Company

XV. According to the information and explanation given to us, the Company has given counter guarantees against the guarantees issued by the Company''s bankers.

XVI. As per information and explanation given to us, term loans raised during the year by the Company have been applied for the purpose for which said loans were raised.

XVII. According to the information and explanations given to us and as per books and records examined by us, as on the date of balance sheet ,no funds raised on short-term basis used for long term investment. Similarly, no funds raised on long-term basis have been used for short-term investment.

XVIII.The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under section 301 of the Companies Act 1956. According to the information and explanation given to us and as per the books and records examined by us, the price at which shares have been issued is not prejudicial to the interest of the Company.

XIX. The Company has not issued any debentures during the year.

XX. The Company has not raised any monies by way of public issues during the year.

XXI. According to the information and explanation given us, and on the basis of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India. We have not come across any such instance of fraud on or by the Company have been noticed or reported during the course of our audit.



For Vijay Prakash Gupta & Associates Chartered Accountants ICAI Firm Reg. No. : 005570N

Vikas Varshney New Delhi Partner September 2, 2014 Membership No.510929

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Mar 31, 2013

Report on the Financial Statements

1. We have audited the accompanying financial statements of Shiv-Vani Oil & Gas Exploration Services Ltd. (the "Company"), which comprise the Balance Sheet as at March 31, 2013 and Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information, which we have signed under reference to this report.

Management''s Responsibility for the Financial Statements

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

Auditors'' Responsibility

3. 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.

4. An Audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors'' 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 auditors consider internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Management, as well as evaluating the overall presentation of the financial statements.

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

Opinion

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

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

b) In the case of the statement of Profit & Loss, of the Profit for the year ended on that date;

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

Report on Other Legal and Regulatory Requirements

7 As required by the Companies (Auditor''s Report) Order, 2003, as amended by the Companies (Auditor''s Report) (Amendment) Order, 2004, issued by the Central Government of India in terms of Sub-Section (4A) of Section 227 of the Act (hereinafter referred to as the Rs.Order'') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in the paragraph 4 and 5 of the Order.

8 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 accounts 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 & Loss dealt with by this Report are in agreement with books of account.

(d) In our opinion, the Balance Sheet, Statement of Profit & Loss dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Act;

(e) On the basis of written representation received from the Directors as on 31st March, 2013, and taken on records by the Board of Directors, none of the Directors is disqualified as on 31st March, 2013, from being appointed as a Director in terms of clause (g) of sub-Section (I) of Section 274 of the Act.

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 7 of the Independent Auditor''s Report of even date to the member of Shiv-Vani Oil & Gas Exploration Services Ltd. on the financial statements as of and for the year ended March 31, 2013.

I. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets no material discrepancies were noticed on such physical verification.

c) In our opinion the company has not disposed of a substantial part of its fixed assets during the year and therefore, the going concern status of the Company is not affected.

II. In respect of its inventories:

a) As explained to us, the inventory of store & Spare parts, except goods in transit, lying at different sites, have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the company and the nature of the company and the nature of its business.

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

c) The Company has maintained proper records of inventory. as explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records.

III. In respect of the loans, secured or unsecured, granted or taken by the company to/from companies, firm or other parties in the register maintained under section 301 of the Companies Act,1956;

a) The Company has given interest bearings loan to corporate/ to its subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year was Rs. 192,38,16,345/-.

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

c) The said interest free loan given to a wholly owned subsidiary of the Company are repayable on demand and there is no repayment schedule.

d) In respect of the loan given by the Company to the corporate, the same is repayable on demand the question of overdue amount does not arise.

e) The Company has taken new loans during the year.

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

V. in respect of the contracts or arrangements referred to section 301 of the companies act 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under section 301 of the Companies Act,1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, there are certain transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act,1956 aggregating during the year to Rs.500000/- or more in respect of any party in the said financial year. The prices at which these have been made reasonable having to the prevailing prices at that time.

VI. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore the provision of Clause (vi) of the companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

VIII. Maintenance of cost records has not been prescribed by central government under section 209 (1) (d) of the Companies Act, 1956.

IX. In respect of statutory dues:

a) According to the records, the Company was not regular in depositing the undisputed statutory dues including Provident Fund, Employees State Insurance Contribution, Sales tax, Work contract ax, Tax deducted at Source and other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed accounts payable in respect of the aforesaid dues were outstanding as at March 31,2013 for a Period of more than six months from the date of becoming payable except Tax deducted at sources dues aggregating to Rs. 12,90,08,864/- (Previous Year – 2,62,31,877), VAT dues aggregating to Rs. 1,75,68,135/-, Work Contract Tax dues aggregating to Rs. 57,44,111/- and Services Tax dues aggregating to Rs. 127,22,44,795/- (Previous Year – Rs. 49,32,81,182) were payable at the year end.

b) Following are the details of disputed statutory due that have not been Paid to the concerned authorities.



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

Service Demand 47,95,31,062 F. Y. 2007-08 Service Tax Appellate Tribunal

Central Excise & Penal Procee ding 12,50,000 F. Y.2007-08 High Court - Bombay Custom

Income Tax Act, Income Tax 33,90,17,125 2005-06 To 2008-09 Commissioner of 1961 Income Tax (Appeals) New Delhi

X. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered of dues to financial year.

XI. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions. Bank or debenture holders.

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

XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund /society. Therefore, the provisions of clause (xiii) of the Companies (Auditor Report) Order,2003 are not applicable to the Company.]

XIV. The Company is not dealing or trading in shares, securities, debentures and other investments as such the provision of the clause are not applicable to the Company.

XV. According to the information and explanation given to us, the company has given counter guarantee against the guarantees issued by the company''s bankers.

XVI. As per information and explanation given to us, term loans raised during the year by the company have been applied for the purpose for which said loans were raised.

XVII.According to the information and explanations given and records examined by us, as on the date of balance sheet ,no funds raised on short-term basis used for long term investment. Similarly, no funds raised on long-term basis have been used for short-term investment.

XVIII.The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act 1956.

XIX. The Company has not issued any debentures during the year.

XX. The company has not raised any monies by way of public issues during the year.

XXI. According to the information and explanation given to us, and on the basis of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India. We have not come across any such instance of fraud on or by the company have been noticed or reported during the course of our audit.



For Vijay Prakash Gupta & Associates

Chartered Accountants

Firm Reg. No. : 005570N



Vikas Varshney

New Delhi Partner

May 30, 2013 Membership No.510929

---

Mar 31, 2012

1. We have audited the attached Balance Sheet of SHIV-VANI OIL & GAS EXPLORATION SERVICES LTD at March 31, 2012, the Profit and Loss Accounts and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company management. Our responsibility is to express an opinion on theses financial statements based on our audit.

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

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

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

a) We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the 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 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 are in compliance with the Accounting Standards referred to in section 211 (3C) of the Companies Act, 1956.

e) On the basis of written representations received from the Directors as on March31,2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March31, 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 accounts read together with the significant Accounting policies and other notes thereon give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles accepted in India:

i. in the case of the Balance sheet, of the state of affairs of the Company as at March 31, 2012;

ii. in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT 31ST MARCH 2012 (Referred to in paragraph 3 above of our Report of even date)

I. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets, no material discrepancies were noticed on such physical verification.

c) In our opinion the Company has not disposed of a substantial part of its fixed assets during the year and therefore, the going concern status of the Company is not affected.

II. In respect of its inventories:

a) As explained to us, the inventory of store & spare parts, except goods in transit, lying at different sites, have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the Company and the nature of the Company and the nature of its business.

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

c) The Company has maintained proper records of inventory. as explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records

III. In respect of the loans, secured or unsecured, granted or taken by the Company to/from Companies, firm or other parties in the register maintained under section 301 of the Companies Act,1956;

a) The Company has given interest bearings loan to corporate/interest free to its subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs.117236082.

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

c) The said interest free loan given to a wholly owned subsidiary of the Company and there is no repayment schedule.

d) In respect of the loan given by the Company to the corporate, the same is repayable on demand the question of overdue amount does not arise.

e) The Company has taken new loans during the year.

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

V. in respect of the contracts or arrangements referred to section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, there are certain transactions in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act,1956 aggregating during the year to Rs. 500,000/-(Rupees Five Lakhs only ) or more in respect of any party in the said financial year. The prices at which these have been made reasonable having to the prevailing prices at that time.

VI. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore the provision of Clause (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

VIII. Maintenance of cost records has not been prescribed by Central Government under Section 209 (1) (d) of the Companies Act, 1956.

IX. In respect of statutory dues:

a) According to the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Work Contract Tax, Tax Deducted at Sources, Customs Duty, Excise Duty, Cess and other statutory dues have been generally regularly deposited with the appropriate authorities. According to the information and explanations given to us, no un disputed amounts payable in respect of the aforesaid dues were outstanding as at March 31, 2012 for a period of more than six months from the date of becoming payable except Tax Deducted at Source dues aggregating to Rs. 26231877 and Service Tax dues aggregating to Rs.49328118 were payable at the year end.

b) Following are the details of disputed statutory due that have not been paid to the concerned authorities.

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

Service tax Demand 479531062 2007-08 Service Tax Appellate Tribunal

Central Excise Penal Proceeding 1250000 2007-08 High Court & Custom

X. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered of dues to financial year.

XI. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that in few cases the payment to Bank, Financial institutions was delayed .

XII. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund /society. Therefore, the provisions of clause (xiii) of the Companies (Auditor Report) Order,2003 are not applicable to the Company

XIV. The Company is not dealing or trading in shares, securities, debentures and other investments as such the provision of the clause are not applicable to the Company.

XV. According to the information and explanation given to us, the Company has given counter guarantee against the guarantees issued by the company's bankers.

XVI. As per information and explanation given to us, term loans raised during the year by the Company have been applied for the purpose for which said loans were raised.

XVII.According to the information and explanations given to us and as per books and records examined by us, as on the date of balance sheet, no funds raised on short-term basis used for long term investment. Similarly, no funds raised on long- term basis have been used for short-term investment.

XVIII.The Company has not made any preferential allotment of shares to parties and Companies covered in the register maintained under Section 301 of the Companies Act, 1956. According to the information and explanation given to us and as per the books and records examined by us, the price at which shares have been issued is not prejudicial to the interest of the company.

XIX. The Company has not issued any debentures during the year; however, first pari passu charge on fixed Assets of the company was created for Optional Convertible Debentures (OCD) of Rs. 2500000000 issued last year.

XX. The Company has not raised any monies by way of public issues during the year.

XXI. According to the information and explanation given to us, and on the basis of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India. We have not come across any such instance of fraud on or by the Company have been noticed or reported during the course of our audit.

For Vijay Prakash Gupta & Associates

Chartered Accountants

Firm Reg. No. : 005570N

Vikas Varshney New Delhi Partner

September 3, 2012 Membership No.510929

---

Mar 31, 2011

1. We have audited the attached Balance Sheet of Shiv-Vani Oil & Gas Exploration Services Ltd. at 31st March, 2011, the Profit and Loss Accounts and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

3. As required by the companies (Auditor Report) Order, 2003 ("the order") issued by central Government of India in terms of Sub-Section (4A) of Section 227 of the Companies Act, 1956 ("the Act"), we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

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

a) We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for the 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 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 are in compliance with the Accounting Standards referred to in Section 211 (3C) of the Companies Act 1956.

e) On the basis of written representations received from the Directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 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 accounts read together with the significant Accounting policies and other notes thereon give the information required by the companies Act,1956, in the manner so required and give a true and fair view in conformity with the accounting principals accepted in India:

i. in the case of the Balance sheet, of the state of affairs of the Company as at 31st March, 2011;

ii. in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT 31ST MARCH 2011 ANNEXURE REFERRED TO IN PARAGRAPH ABOVE OF OUR REPORT OF EVEN DATE

I. In respect of its fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the company and nature of its assets, no material discrepancies were noticed on such physical verification.

c) In our opinion the company has not disposed of a substantial part of its fixed assets during the year and therefore, the going concern status of the Company is not affected.

II. In respect of its inventories:

a) As explained to us, the inventory of store & Spare parts, except goods in transit, lying at different sites, have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the company and the nature of the company and the nature of its business.

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

c) The Company has maintained proper records of inventory. as explained to us, there were no material discrepancies noticed on physical verification of inventory as compared to the book records

III. In respect of the loans, secured or unsecured, granted or taken by the company to/from companies, firm or other parties in the register maintained under Section 301 of the Companies Act, 1956;

a) The Company has given interest bearings loan to corporate/interest free to its subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 5,052.20 millions.

b) In our opinion and according to the information and explanations given to us, the terms and conditions of interest free loans are not prima facie prejudicial to interest of the company.

c) The said interest free loan given to a wholly owned subsidiary of the Company are repayable on demand and there is no repayment schedule.

d) In respect of the loan given by the Company to the corporate, the same is repayable on demand the question of overdue amount does not arise.

e) The Company has taken new loans during the year.

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

V. In respect of the contracts or arrangements referred to Section 301 of the Companies Act, 1956:

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements, that needed to be entered in the register maintained under Section 301 of the Companies Act,1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, there are certain transactions in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act,1956 aggregating during the year to Rs.500,000/- (Rupees Five Lakhs only) or more in respect of any party in the said financial year. The prices at which these have been made reasonable having to the prevailing prices at that time.

VI. According to the information and explanations given to us, the Company has not accepted any deposits from the public. Therefore the provision of Clause (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

VIII. Maintenance of cost records has not been prescribed by central government under Section 209(1)(d) of the Companies Act, 1956.

IX. In respect of statutory dues:

a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, subject to Note no. 11 of Notes to Accounts (Schedule G), the Company has been generally regular in depositing the undisputed statutory dues including provident fund, tax deducted at source, Investor Education and Protection fund, Employee's state insurance, Income Tax, sales tax/Vat, service tax, custom duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities.

b) Following are the details of disputed statutory due that have not Paid to the concerned authorities.

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

Service Tax Demand 549,531,062 2007-08 Service Tax Appellate Tribunal

Central Excise Penal Proceeding 1,250,000 2007-08 High Court & Custom

X. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered of dues to financial year.

XI. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, Bank or debenture holders.

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

XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund /society. Therefore, the provisions of clause (xiii) of the Companies (Auditor Report) Order,2003 are not applicable to the Company

XIV. The Company is not dealing or trading in shares, securities, debentures and other investments as such the provision of the clause are not applicable to the Company.

XV. According to the information and explanation given to us, the company has given counter guarantee against the guarantees issued by the company's bankers.

XVI. As per information and explanation given to us, term loans raised during the year by the company have been applied for the purpose for which said loans were raised.

XVII. According to the information and explanations given to us and as per books and records examined by us, as on the date of balance sheet ,no funds raised on short-term basis used for long term investment. Similarly, no funds raised on long-term basis have been used for short-term investment.

XVIII. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the companies Act 1956. According to the information and explanation given to us and as per the books and records examined by us, the price at which shares have been issued is not prejudicial to the interest of the company.

XIX. The Company had issued Optional Convertible debentures for Rs. 2,500 Millions during the year and created 1st pari passu charge of Assets.(Refer note no B (a) of notes to Accounts ).

XX. The company has not raised any monies by way of public issues during the year.

XXI. According to the information and explanation given to us, and on the basis of our examination of the books and records of the company carried out in accordance with the generally accepted auditing practices in India. We have not come across any such instance of fraud on or by the company have been noticed or reported during the course of our audit.

For Vijay Prakash Gupta & Associates

Chartered Accountants

Firm Registration No: 05577N

Vikas Varshney New Delhi Partner

August 31, 2011 Membership No: 510929

---

Mar 31, 2010

1. We have audited the attached Balance Sheet of Shiv-Vani Oil & Gas Exploration Services Ltd. as at March 31, 2010, the Profit and Loss Accounts and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the company management. Our responsibility is to express an opinion on these financial statements based on our audit.

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

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

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

a) We have obtained all the information and explanation, which to the best of our knowledge and belief were necessary for 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 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 Statements with by this report are in compliance with the Accounting Standards referred to in section 211 (3C) of the Companies Act 1956.

e) On the basis of written representations received from the Directors as on March 31, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on March 31, 2010 from being appointed as a director in terms of clause (g) of sub section (1) of section 274 of the companies Act 1956;

f) 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 significant Accounting policies and other notes thereon give the information required by the companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles accepted in India;

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

ii. In the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE TO THE AUDITORS REPORT 31ST MARCH, 2010 ANNEXURE REFERRED TO IN PARAGRAPH ABOVE OF OUR REPORT OF EVEN DATE

I. In respect of its fixed assets;

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, all the fixed assets have been physically verified by the management in a phased periodical manner, which in our opinion is reasonable, having regard to the size of the Company and nature of its assets no material discrepancies were noticed on such physical verification.

c) In our opinion the Company has not disposed of a substantial part of its fixed assets during the year and therefore, the going concern status of the Company is not affected.

II. In respect of its inventories;

a) As explained to us, the inventory of store & Spare parts, excepts goods in transit, lying at different sites, have been physically verified by the management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable having regard to the Company and the nature of the Company and the nature of its business.

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

c) The Company has maintained proper records of inventory, as explained to us, there were no material discrepancies notices on physical verification of inventory as compared to the book records.

III. In respect of the loans, secured or unsecured, granted or taken by the Company to/from companies, firm or other parties in the register maintained under Section 301 of the Companies Act, 1956;

a) The Company has given interest bearings loan to corporate/interest free to its subsidiaries. In respect of the said loans, the maximum amount outstanding at any time during the year is Rs. 3,502.20 millions.

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

c) The said interest free loan given to a wholly owned subsidiary of the Company are repayable on demand and there is no repayment schedule.

d) In respect of the loan given by the Company to the corporate, the same is repayable on demand the question of overdue amount does not arise.

e) The Company has taken new loans during the year.

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

V. In respect of the contracts or arrangements referred to section 301 of the Companies Act, 1956;

a) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements that needed to the entered in register maintained under Section 301 of the Companies Act, 1956 have been so entered.

b) In our opinion and according to the information and explanations given to us, there are certain transactions in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 aggregating during the year to Rs. 500,000/- (Rupees Five Lakhs only) or more in respect of any party in the said financial year. The prices at which these have been made reasonable having to the prevailing prices at that time.

VI. According to the information and explanations to us, the Company has not accepted any deposits from the public. Therefore the provision of Clause (vi) of the Companies (Auditors Report) Order, 2003 are not applicable to the Company.

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

VIII. Maintenance of cost records has not been prescribed by Central Government under Section 209 (1) (d) of the Companies Act, 1956.

IX. In respect of statutory dues;

a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion, subject to Note no 11 of Notes to Accounts (schedule G), the Company has been generally regular in depositing the undisputed statutory dues including provident fund, tax deducted at source, Investor Education and Protection fund, Employees state insurance, income tax, sales tax/Vat, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. The extent of the arrears of statutory dues outstanding as at March 31, 2010 for a period of more than six month is in respect of Income Tax of Rs. 117,990,335/- and Fringe Benefit Tax of Rs. 380,573/- for the A.Y. 2009-10

b) Following are the details of disputed statutory due that have not Paid to the concerned authorities.

Name of the Nature of Amount Statute pending Dues (Rs. )

Services tax Demand 549,531,062/-

Central Excise & Custom Penal Proceeding 1,250,000/-



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

Services tax 2007-08 Service Tax Appellate Tribunal

Central Excise & Custom 2007-08 High Court



X. The Company does not have accumulated losses at the end of the financial year. The Company has not incurred cash losses during the financial year covered of dues to financial year.

XI. Based on our audit procedures and according to the information and explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, bank or debenture holders.

XII. In our opinion and according to the explanations given to us and based on the information available, no loans and advances have been granted by the Company on the basis of security by way of pledge of shares, debentures and other securities.

XIII. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of the Companies (Auditor Report) Order, 2003 are not applicable to the Company.

XIV. The Company is not dealing or trading in shares, securities, debentures and other investments as such the provision of the clause are not applicable to the Company.

XV. According to the information and explanation given to us, the Company has given counter guarantee against the guarantees issued by the Companys bankers.

XVI. As per information and explanation given to us, term loans raised during the year by the Company have been applied for the purpose for which said loans were raised.

XVII. According to the information and explanations given to us and as per books and records examined by us, as on the date of balance sheet, no funds raised on short-term basis used for long term investment. Similarly, no funds raised on long-term basis have been used for short-term investment.

XVIII. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under section 301 of the Companies Act, 1956. According to the information and explanation given to us and as per the books and records examined by us, the price at which shares have been issued is not prejudicial to the interest of the Company.

XIX. The Company has not issued any debentures during the year, hence the question of creations of security or charge in respect of debentures issued does not arise.

XX. The Company has not raised any monies by way of public issue during the year.

XXI. According to the information and explanation given us, and on the basis of our examination of the books and records of the Company carried out in accordance with the generally accepted auditing practices in India. We have not come across any such instance of fraud on or by the Company have been noticed or reported during the course of our audit.

For Vijay Prakash Gupta & Associates

Firm Registration No. 005570N

Chartered Accountants

Vikas Varshney New Delhi Partner

September 1, 2010 Membership No.510929