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Auditor Report of Triveni Engineering & Industries Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of Triveni Engineering & Industries Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2015, 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, in which are incorporated the returns for the year ended on that date audited by the Branch Auditors of the Company's Mysore Unit, Water Business Unit, Noida and Project Division, Noida.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS

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

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on these 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 thereunder.

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

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

We believe that the audit evidence we have obtained is sufcient 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 this Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its loss and its cash flows for the year ended on that date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

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

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

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

b) in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books & proper returns adequate for the purpose of our audit have been received from Mysore Unit, Water Business Unit, Noida and Projects Division, Noida of the Company not visited by us ;

c) the report on the accounts of the Mysore Unit, Water Business Unit, Noida and Projects Division, Noida of the company audited under sub-section (8) of section 143 by the branch auditors have been sent to us and have been properly dealt with by us in preparing this report.

d) the balance sheet, the statement of Profit and loss and the cash flow statement dealt with in this report are in agreement with the books of account and with the returns received from the Mysore Unit, Water Business Unit, Noida and Projects Division, Noida of the Company not visited by us;

e) 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;

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

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

i) the Company has disclosed the impact of pending litigation on its financial position in its financial statements. Refer Note No.32 of the financial statements;

ii) The Company did not have any long term contracts including derivatives contracts for which there were, any material foreseeable losses.

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

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 1 of the Independent Auditors' Report of even date under the heading "Report on Other Legal and Regulatory Requirements" to the members of Triveni Engineering and Industries Limited on the standalone financial statements as of and for the year March 31, 2015.

We report that :

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

b) Major items of fixed assets have been physically verified by the management during the year as per information given to us. As explained to us, no material discrepancies were noticed on such verification as compared to the book records. In our opinion the frequency of verification is reasonable having regard to the size of the Company and nature of its activities.

2) a) Inventories have been physically verified by the Management to the extent practicable at reasonable intervals during the year. In our opinion the frequency of verification is reasonable.

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

c) The Company is maintaining proper records of inventory. The discrepancies noticed on such verifcation as compared to the book records were not material having regard to the size and nature of the operations of the Company and have been properly adjusted in the books of account.

3) The Company has not given any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 189 of the Act. Accordingly paragraphs 3 (iii) (a) and 3 (iii) (b) of the Companies (Auditor's Report) Order, 2015 are not applicable to the Company.

4) According to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the Company and the nature of its business for the purchase of inventory and fxed assets and 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 system.

5) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Sections 73 to 76 of the Act or any other relevant provisions of Act, and the Companies (Acceptance of Deposits) Rules, 2014 with regard to the deposits accepted from the public in the earlier period. As per the information and explanations given to us, no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal on the Company in respect of deposits accepted.

6) We have broadly reviewed the books of accounts maintained by the Company in respect of the products where pursuant to the rules made by the Central Government the maintenance of cost records has been prescribed under Section 148 (1) of the Companies Act, 2013, and are of the opinion that prima facie the prescribed accounts and records have been maintained. However, we are not required to carry out and have not carried out a detailed examination of the records with a view to determine whether they are accurate or complete.

7) a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income tax, sales tax, wealth tax, service tax, custom duty, value added tax, excise duty, cess and other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears as at March 31, 2015 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us, there are no dues of wealth tax, custom duty, and cess which have not been deposited on account of any dispute. Disputed income tax, sales tax, value added tax, service tax and excise duty which have not been deposited on account of matters pending before appropriate authorities are as under:

s. Name of statute Forum where dispute is nature of no. pending dues

1 Income Tax Act, 1961 Commissioner Income Tax Income Tax (Appeal)

Assessing Authority Income Tax

2 Central Sales Act & Sales / Assessing Authority Sales Tax Trade Tax Acts of various states

Commissioner (Appeal) Sales Tax Penalty Interest

Appellate Tribunal Sales Tax

High Court Sales Tax Penalty

3 Excise Act, 1944 Commissioner (Appeal) Excise Duty Penalty

Appellate Tribunal Excise Duty Penalty

High Court Excise Duty Penalty

Supreme Court Excise Duty Penalty

4 The Finance Act, 1994 Appellate Tribunal Service Tax Penalty Commissioner (Appeal) Service Tax Penalty

5 UP Sugar Promotion Policy High Court Entry Tax 2004 Sales Tax



S. Name of Statute Amount* Year No. (Rs. in lacs)

1 Income Tax Act 1961 1,717.63 2004-05,

2005-06, 2006-07 &

2009-10

117.73 2010-11

2 Central Sales Act & Sales/ 149.61 1991-92, Trade Tax Acts of various 1993-94,

1994-95,

1996-97

1997-98,

2000-01

2002-03

37.74 1996-97,

52.20 2008-09

74.24 to 2011-12

4.01 1987-88,

1994-95,

1998-99,

1999-00,

2007-08

101.22 1993-94,

0.21 1994-95

1996-97,

1999-00,

2006-07,

2007-08

3. Excise Act 1944 21.18 1994-95,

9.62 1995-96,

2007-08 to

2009-10,

2011-12 to

2013-14

567.49 1995-96,

390.07 1996-97,

2003-04,

2004-05 to

2006-07,

2008-09 to

2013-14

234.56 1997-98,

12.90 1998-99,

1999-00,

2003-04

2005-06

2007-08 to

2010-11

1.70 2010-2011

1.73

4 The Finance Act 1994 55.97 2004-05,

31.29 2005-06,

2007-08 to

2011-12

1.15 2012-13,

0.02 2013-14

5 UP Sugar Promotion Policy 997.49 2006-07 to 2004 36.24 2014-15

* Net of amounts paid under protest or otherwise.

c ) The amount required to be transferred to the Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made thereunder has been transferred to such fund within time.

8) In our opinion, the accumulated losses of the Company are not more than ffty percent of its net worth. The Company has incurred cash losses during the year and in the immediately preceding financial year.

9) 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, banks or debenture holders during the year.

10) 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.

11) In our opinion, the term loans raised during the year have been applied for the purpose for which were raised.

12) During the course of our examination of the books of accounts and records carried out in accordance with the generally accepted auditing practice and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year. For J.C. Bhalla and Co.

Chartered Accountants

FRN : 001111N

Sudhir Mallick

Place : Noida (U.P.) Partner

Date : May 27, 2015 Membership No. 80051


Sep 30, 2012

We have audited the attached Balance Sheet of Triveni Engineering & Industries Limited as at 30th September 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date both annexed thereto. These financial statements are the responsibility of the Company''s management. Our responsibility is to express an opinion on these financial statements based on our audit.

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 Companies (Auditors'' Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A) of Companies Act, 1956 and on the basis of such checks of the books and records of the company as we considered appropriate after considering the reports of the other auditors of the Company''s Engineering Units, we give in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph "1" above: -

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 accounts as required by law have been kept by the company so far as appears from the examination of the books and according to the reports of the Engineering Units auditors where such audit has not been conducted by us.

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

d) The reports of the Engineering Units auditors have been forwarded to us and have been considered in preparing our report.

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

f) On the basis of the written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the Company is disqualified as on 30th September 2012 from being appointed as a Director in terms of Clause (g) of sub section (1) of Section 274 of the Companies Act, 1956.

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

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 30th September, 2012 ;

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

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

Referred to in Paragraph "1" of our report of even date on the accounts for the year ended on 30th September, 2012 of Triveni Engineering & Industries Limited.

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

(b) Major items of fixed assets have been physically verified by the management during the year as per information given to us. As explained to us, no material discrepancies were noticed on such verification as compared to the available book records. In our opinion the frequency of verification is reasonable having regard to the size of the company and nature of its activities.

(c) In our opinion, the company has not disposed off substantial part of fixed assets during the year and hence, going concern status of the company is not affected.

2. (a) Inventories have been physically verified by the Management to the extent practicable at reasonable intervals during the year or at the year-end at all locations of the company. In our opinion the frequency of verification is reasonable.

(b) According to information given to us, the procedures for physical verification of the inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on such verification as compared to the book records were not material having regard to the size and nature of the operations of the company and have been properly adjusted in the books of account.

3. (a) According to the information and explanations given to us, the Company has granted unsecured loan to a party covered in the register maintained under Section 301 of the Companies Act, 1956. The maximum amount involved during the year was Rs. 1792.11 lacs and the year end balance of loan granted to such party was Rs. Nil.

(b) In our opinion, the rate of interest and other terms and conditions of such loan are not, prima facie, prejudicial to the interest of the company.

(c) The party has repaid the principal amount as stipulated and has also been regular in the payment of interest.

(d) In respect of aforesaid loan there was no amount outstanding at the end of the year.

(e) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4 (iii) (e) to (g) of the Order are not applicable to the Company.

4. According to the information and explanations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fixed assets and 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 system.

5. (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 Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 exceeding the value of Rupees five lakhs or more in respect of any party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except that transactions in respect of sale of goods, rendering of services, receipt of rent, purchase of stores & spare parts, receiving services and payment towards sales and marketing cost with a party for which no comparable quotations are available. We are informed by the management that the price and charges so received and paid for such transactions, are reasonable having regard to the volume of business, quality and the specialised nature of goods and services involved.

6. In our opinion and according to the information and explanations given to us, the company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of Act, and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. As per the information and explanations given to us, no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal on the Company in respect of deposits accepted.

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 maintained by the company in respect of the products where pursuant to the rules made by the Central Government the maintenance of cost records has been prescribed under Section 209(1)(d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribed accounts and records have been maintained . However, we are not required to carry out and have not carried out a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) 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, custom duty, excise duty, cess and other statutory dues applicable to it. According to the information and explanations given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears as at 30th September 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of wealth tax, service tax and cess which have not been deposited on account of any dispute. Disputed income tax, sales tax, excise duty and custom duty which have not been deposited on account of matters pending before appropriate authorities are as under:

S. No Name of Statute Forum where dispute is pending

1 Income Tax Act, 1961 Appellate Tribunal Commissioner Income Tax (Appeals)

2 Central Sales Act & Sales/ Commissioner (Appeals) Trade Tax Acts of various states

Appellate Tribunal

High Court

3 Excise Act, 1944 Commissioner (Appeals)

Appellate Tribunal

High Court

4 Customs Act, 1962 Commissioner (Appeals)

5 UP Sugar Promotion Policy High Court 2004

Name of Statute Nature of dues Amount* Year (Rs.in lacs)

Income Tax Act, 1961 Penalty 29.99 1999-2000

Income Tax 812.93 2006-2007

Central Sales Act & Sales/ Trade Tax Acts of Various States Sales Tax 117.14 1977-1978,

Penalty 52.20 1991-1992 to

Interest 74.24 1994-1995,

2002-2003,

2004-2005,

2008-2009

Sales Tax 96.84 1987-1988,

2006-2007,

2007-2008

Sales Tax 10.66 1979-1980,

Penalty 0.21 1980-1981,

1986-1987,

1994-1995 to

1996-1997

Excise Act, 1944 Excise Duty 32.16 1995-1996,

Penalty 28.38 2006-2007 to

Interest 2011-2012

Excise Duty 592.79 1995-1996 to

Penalty 435.42 1996-1997,

Interest 292.27 2003-2004 to

2011-2012

Excise Duty 11.89 1996-1997

Penalty 12.90 to

Interest 5.01 2005-2006

Customs Act, 1962 Custom Duty 3.36 2007-2008

UP Sugar Promotion Policy 2004 Entry Tax 746.91 2006-07 to

Sales Tax 36.24 2011-12

* Net of amounts paid under protest or otherwise and includes demand aggregating to Rs. 70.62 lacs for which appeals will be filed with the prescribed time, as informed to us.

10. The company does not have any accumulated loss as at the end of the financial year. The Company has incurred cash losses in the current financial year but has not incurred cash losses in the immediately preceding financial year.

11. 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, banks or debenture holders during the year.

12. In our opinion and according to the information and explanations given to us, 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.

13. In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, provisions of clause 4(xiii) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

14. In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, provisions of Clause 4(xiv) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the company.

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. In our opinion, the term loans raised during the year have been applied for the purpose for which they were raised.

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. During the year, 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.

19. According to the information and explanations given to us, during the period covered by our audit, the company has not issued debentures requiring creation of any security or charge.

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

21. During the course of our examination of the books of accounts and records carried out in accordance with the generally accepted auditing practice and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For and on behalf of

J C Bhalla & Company

Chartered Accountants

FRN : 001111N

Sudhir Mallick

Place : Noida (U.P.) Partner

Date : November 21, 2012 Membership No. 80051


Sep 30, 2010

We have audited the attached Balance Sheet of Triveni Engineering & Industries Limited as at 30th September 2010, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date both anneRs.ed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to eRs.press an opinion on these financial statements based on ouraudit.

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 eRs.amining, 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 Companies (Auditors Report) Order, 2003 issued by the Central Government in terms of Section 227 (4A) of Companies Act, 1956 and on the basis of such checks of the books and records of the company as we considered appropriate after considering the reports of the other auditors of the Companys Engineering Units, we give in the AnneRs.ure a statement on the matters specified in paragraph 4 and 5 of the said order.

2. Further to our comments in the AnneRs.ure referred to in paragraph "1" above:-

a) We have obtained all the information and eRs.planations, which to the best of our knowledge and belief were necessary for the purposes 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 the eRs.amination of the books and according to the reports of the Engineering Units auditors where such audit has not been conducted by us.

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

d) The reports of the Engineering Units auditors have been forwarded to us and have been considered in preparing our report.

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

f) On the basis of the written representations received from the Directors and taken on record by the Board of Directors, we report that none of the Directors of the company is disqualified as on 30th September 2010 from being appointed as a Director in terms of Clause (g) of sub section (1) of Section 274 ofthe Companies Act, 1956.

In our opinion and to the best of our information and according to the eRs.planations given to us the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the Company as at 30th September, 2010;

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

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

anneRs.ure to auditors report

Referred to in Paragraph "1" of our report of even date on the accounts for the year ended on 30th September, 2010 of Triveni Engineerings Industries Limited.

1. (a) The company has generally maintained proper records showing full particulars including quantitative details and situation of fiRs.ed assets.

(b) Major items of fiRs.ed assets have been physically verified by the management during the year as per information given to us. As eRs.plained to us, no material discrepancies were noticed on such verification as compared to the available book records. In our opinion the frequency of verification is reasonable having regard to the size of the company and nature of its activities.

(c) In our opinion, the company has not disposed off substantial part of fiRs.ed assets during the year and hence, going concern status of the company is not affected.

2. (a) Inventories have been physically verified by the Management to the eRs.tent practicable at reasonable intervals during the year or at the year-end at all locations of the company. In our opinion the frequency of verification is reasonable.

(b) According to information given to us, the procedures for physical verification of the inventories followed by the management are reasonable and adequate in relation to the size of the company and nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on such verification as compared to the book records were not material having regard to the size and nature of the operations of the company and have been properly adjusted in the books of account.

3. (a) According to the information and eRs.planations given to us, the Company has not granted any loans, secured or unsecured to companies, firms and other parties covered in the register maintained under Section 301 of the Companies Act, 1956. Accordingly, paragraphs 4(iii)(b), (c) and (d) of the Order are not applicable.

(b) In our opinion and according to the information and eRs.planations given to us, the company has taken unsecured loan by way of fiRs.ed deposit under public fiRs.ed deposit scheme of the company from one party covered in the register maintained under section 301 of the Act. The maRs.imum amount of the loan involved during the year and the year end balance of the loan taken from such party was Rupees 0.25 million.

(c) In our opinion and according to the information and eRs.planations given to us, the rate of interest and other terms and conditions on which loan has been taken from a party covered in the register maintained under section 301 of the Companies Act, 1956 are as applicable to public deposits accepted by the company and are thus not prima facie, prejudicial to the interest of the company.

(d) In respect of the loan taken, the company is repaying the principal amount and is paying the interest as stipulated.

4. According to the information and eRs.planations given to us, there are adequate internal control procedures commensurate with the size of the company and the nature of its business for the purchase of inventory and fiRs.ed assets and 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 system.

5. (a) In our opinion and according to the information and eRs.planations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion and according to the information and eRs.planations given to us, the transactions made in pursuance of contracts or arrangements entered in the register maintained under Section 301 of the Companies Act, 1956 eRs.ceeding the value of Rupees half million or more in respect of any party have been made at prices which are reasonable having regard to prevailing market prices, wherever comparable prices are available, at the relevant time.

6. In our opinion and according to the information and eRs.planations given to us, the company has complied with the provisions of Section 58A, 58AA or any other relevant provisions of Act, and the Companies (Acceptance of Deposits) Rules, 1975 with regard to the deposits accepted from the public. As per the information and eRs.planations given to us, no order under the aforesaid sections has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other Tribunal on the Company in respect of deposits accepted.

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 maintained by the company in respect of the products where pursuant to the rules made by the Central Government the maintenance of cost records has been prescribed under Section 209(1 )(d) of the Companies Act, 1956, and are of the opinion that prima facie the prescribed accounts and records have been maintained . However, we are not required to carry out and have not carried out a detailed eRs.amination of the records with a view to determine whether they are accurate or complete.

9. (a) 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 taRs., sales taRs., wealth taRs., service taRs., custom duty, eRs.cise duty, cess and other statutory dues applicable to it. According to the information and eRs.planations given to us, no undisputed amounts payable in respect of aforesaid dues were in arrears as at 30th September 2010 for a period of more than siRs. months from the date they became payable.

(b) According to the information and eRs.planations given to us, there are no dues of custom duty, wealth taRs., service taRs. and cess which have not been deposited on account of any dispute. Disputed income taRs., sales taRs. and eRs.cise duty which have not been deposited on account of matters pending before appropriate authorities are as under:

Sl. Name of Statute Forum where Nature of dues No. dispute is pending

1 Income TaRs. Act, 1961 Commissioner (Appeals) Penalty Income TaRs. Income TaRs.

2 Central Sales Act & Sales/ Assessing Authority Sales TaRs. Trade TaRs. Acts of various states

Commissioner (Appeals) Sales TaRs.

Appellate Tribunal Sales TaRs. Penalty Interest

High Court ERs.cise Duty Penalty

3 ERs.cise Act, 1944 Commissioner (Appeals) ERs.cise Duty Penalty Interest

Appellate Tribunal ERs.cise Duty Penalty Interest

High Court ERs.cise Duty Penalty Interest

Supreme Court Interest

4 UP Sugar Promotion High Court Entry TaRs. Policy 2004 Sales TaRs.



Name of Statue Amount* Year (Rs. in Million)

Income TaRs. Act, 1961 19.68 2000-01

5.26 2006-07

100.05 2007-08

Central Sales Act& Sales/ Trade TaRs. Acts of various states 0.15 2008-09

2009-10

14.09 1977-78 1993-94 1994-95 2001-02 to 2007-08

3.47 1987-88

5.22 1993-94

7.42 1995-96

1997-98 2001-02 to 2003-04

1.07 1980-81

0.02 1994-95

1996-97

ERs.cise Act, 1944 3.63 1995-96

2.38 2003-04

0.80 2007-08 to 2010-11

36.82 1996-97

24.83 2001-02 to 24.73 2008-09

1.89 1998-99

1.99 2001-02

0.50 2003-04 to 2005-06

10.17 2001-02 to 2003-04

UP Sugar Promotion Policy 2004 18.58 2006-07 to

3.62 2010-11

10. The company has no accumulated losses as at 30th September 2010 and has not incurred any cash losses in the financial year covered by our audit and immediately preceding financial year.

11. Based on our audit procedures and according to the information and eRs.planations given to us, we are of the opinion that the company has not defaulted in repayment of dues to financial institutions, banks or debenture holders during the year.

12. In our opinion and according to the information and eRs.planations given to us, 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.

13. In our opinion, the company is not a chit fund or a nidhi/ mutual benefit fund/ society. Therefore, clause 4(Rs.iii) of the Companies (Auditors Report) Order, 2003 is not applicable to the Company.

14. In our opinion, the company is not dealing or trading in shares, securities, debentures and other investments. Accordingly, Clause 4(Rs.iv) of the Companies (Auditors Report) Order, 2003 is not applicable to the company.

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

16. In our opinion, the term loans raised during the year have been applied for the purpose for which they were raised eRs.cept term loan of Rupees 30.56 million which remained unutilized at the end of the year. Pending utilization, the amount is kept in no lien account with a bank in accordance with the terms and conditions of the loan.

17. According to the information and eRs.planations given to us and on an overall eRs.amination 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. During the year, 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.

19. According to the information and eRs.planations given to us, during the period covered by our audit, the company has not issued debentures requiring creation of any security or charge.

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

21. During the course of our eRs.amination of the books of accounts and records carried out in accordance with the generally accepted auditing practice and according to the information and eRs.planations given to us, no fraud on or by the company has been noticed or reported during the year nor have we been informed of such case by the management.

For and on behalf of J. C. Bhalla & Company

Chartered Accountants FRN:001111N

Sudhir Mallick

Place:Noida(U.P.) Partner

Date : November 19, 2010 Membership No.80051

 
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