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Auditor Report of Triveni Turbine Ltd.

Mar 31, 2014

1. We have audited the accompanying financial statements of Triveni Turbine Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2014, the Statement of profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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 and cash flows of the Company in accordance with the Accounting Standards notifed under the Companies Act, 1956 of India (the Rs.Act''), read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

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 auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is suffcient 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 March 31, 2014;

(b) in the case of the Statement of profit and Loss, of the profit 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

7. As required by ''the Companies (Auditor''s Report) Order, 2003'', as amended by Rs.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 "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 paragraphs 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 account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from Bangalore Unit of the Company not visited by us;

c. the report on the accounts of the Bangalore unit of the company audited under section 228 by a person other than the company''s auditor has been forwarded to us as required by clause (c) of sub-section (3) of Section 228 and have been dealt with in preparing our report in the manner considered necessary by us.

d. the Balance Sheet, Statement of profit and Loss and Cash Flow Statement dealt with by this report are in agreement with the books of accounts and with the audited returns received from the Bangalore Unit of the Company.

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 notifed under the Act read with the General Circular 15/2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013;

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

Annexure to Independent Auditors'' Report Referred to in paragraph 7 of the Independent Auditors'' Report of even date to the members of Triveni Turbine Limited on the financial statements as of and for the year ended March 31, 2014

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

(b) Major items of fixed assets have been physically verifed by the management during the year. As explained to us, no material discrepancies were noticed on such verifcation as compared to the book records. In our opinion the frequency of verifcation 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 verifed by the Management to the extent practicable at reasonable intervals during the year. In our opinion the frequency of verifcation is reasonable.

(b) According to information given to us, the procedures for physical verifcation 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 physical 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. (a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly paragraphs 4(iii)(b) to 4(iii)(d) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

(b) According to the information and explanations given to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(iii)(f) and (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) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

(b) According to the information and explanations given to us no comparable quotations are available with the company in respect of transactions made, in pursuance of contracts or arrangements exceeding the value of Rs. 0.50 million relating to the purchase of gears, gear boxes, spares, sub contract for turnkey project and services received, sale of steam turbine and spare parts and rendering of services. We are informed by the management that the charges so paid and received for such transactions, are reasonable having regard to the volume of business, quality and the specialized nature of goods and services involved.

6. The Company has not accepted any deposits from the public under the provisions of Section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and the rules framed there under.

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 account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records 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 made and 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 March 31, 2014 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 custom duty, wealth tax and cess which have not been deposited on account of any dispute. Disputed income tax, excise duty, sales tax and service tax which have not been deposited on account of matters pending before appropriate authorities is as under:

S. Name of the Nature of Period to which it Amount No Statue Dues relates (Rs. in Million)

1 Central Excise Excise Duty FY 1998-99 5.44 Act, 1944

2 Central Excise Excise Duty FY 2000-01 30.88 Act, 1944 to FY 2003-04

3 Central Excise Excise Duty FY 2007-08 3.83 Act, 1944

4 Finance Act Service Tax FY 2008-09 13.44 1994 to FY 2011-12

5 Finance Act Service Tax FY 2007-08 31.09 1994 to FY 2011-12

6 Income-tax Act Income-tax FY 2010-11 4.58 1961

7 Income-tax Act Income-tax FY 2011-12 0.25 1961

8 Central Sales Sales Tax FY 2010-11 16.36 Tax Act 1956 Interest 6.14 Penalty 1.64

Name of the Statue Amount Paid Forum where dispute is (Rs. in Million) pending

Central Excise Act, 1944 2.80 Hon''ble Supreme Court of India

Central Excise Act, 1944 23.35 Hon''ble Supreme Court of India

Central Excise Act, 1944 - CESTAT

Finance Act 1994 3.25 Commissioner of Central Excise (Appeals).

Finance Act 1994 1.27 CESTAT

Income-tax Act 1961 - Commissioner of Income- tax (Appeals)

Income-tax Act 1961 - Commissioner of Income- tax (Appeals)

Central Sales Tax Act 1956 7.12 Joint Commissioner of Commercial Tax (Appeals) 0.28

0.08

10. The Company has no accumulated losses as at March 31, 2014 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 explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to banks during the year. The company has no outstanding dues in respect of financial institutions or debenture holders.

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, clause 4(xiii) 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(xiv) of the Companies (Auditors'' Report) Order, 2003 is 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 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 practices 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 nor have we been informed of such case by the management.

For J.C. Bhalla and Co.

Chartered Accountants

FRN : 001111N

Sudhir Mallick Place : Noida (U.P.) Partner

Date : May 27, 2014 Membership No.80051


Mar 31, 2013

Report on the Financial Statements

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

Management''s responsibility for Financial Statements

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

Auditor''s responsibility

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

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

Opinion

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

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

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

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

Report on Other Legal and Regulatory Requirements

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

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

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

b) in our opinion proper books of account as required by law have been kept by the Company so far as appears from our examination of those books and proper returns adequate for the purpose of our audit have been received from Bangalore Unit of the Company not visited by us;

c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of accounts and with the returns received from the Bangalore Unit of the Company not visited by us;

d) the report of the auditors of the Company''s Bangalore Unit has been forwarded to us and has been considered in preparing our report;

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

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

g) Since the Central Government has not issued any notification as to the rate at which the cess is to be paid under section 441A of the Companies Act, 1956 nor has it issued any Rules under the said section, prescribing the manner in which such cess is to be paid, no cess is due and payable by the Company.

(Referred to in our report of even date on the accounts for the year ended on 31st March, 2013 of Triveni Turbine Limited)

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

b) The fixed assets have been physically verified by the management during the year. 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.

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. 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. As explained to us, there were no material discrepancies noticed on physical verification of inventories as compared to the book records.

3. a) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly paragraphs 4(iii)(b) to 4(iii)(d) of the Companies (Auditors'' Report) Order, 2003 are not applicable to the Company.

b) According to the information and explanations given to us, the Company has not taken any loan, secured or unsecured from companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly, the provisions of clause 4(iii)(f) and (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) According to the information and explanations given to us, we are of the opinion that the particulars of contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except that for the purchase of gears, gear boxes, spares, sub contract for turnkey project and services received, payment of rent, sale of spare parts and rendering of services no comparable quotations are available. We are informed by the management that the charges so paid and received for such transactions, are reasonable having regard to the volume of business, quality and the specialized nature of goods and services involved.

6. The Company has not accepted any deposit from the public under the provisions of Section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and the rules framed there under.

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 account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records 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 made and 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 31st March 2013 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 sales tax, custom duty, wealth tax and cess which have not been deposited on account of any dispute. Disputed income tax, excise duty and service tax which have not been deposited on account of matters pending before appropriate authorities is as under:

S. Name of the Nature of Period to which it Amount No Statue Dues relates (Rs. in Million)

1 Central Excise Excise Duty FY 1998-99 5.44 Act, 1944

2 Central Excise Excise Duty FY 2000-01 to FY 30.88 Act, 1944 2003-04

3 Central Excise Excise Duty FY 2007-08 3.60 Act, 1944

4 Finance Service Tax FY 2007-08 to 15.20 Act 1994 FY 2011-12

27.19

5 Income-tax Act Income-tax FY 2010-11 4.58 1961

Name of the Statue Amount Paid Forum where dispute is (Rs. in Million) pending

Central Excise Act 1944 2.80 Hon''ble Supreme Court of India

Central Excise Act 1944 23.34 Hon''ble Supreme Court of India

Central Excise Act 1944 - Commissioner of Central Excise (Appeals)

Finance Act 1994 - Commissioner of Central Excise (Appeals).

- CESTAT

Income Tax Act 1961 - Commissioner of Income- tax (Appeals)

10. The Company has no accumulated losses as at 31st March 2013 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 explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to banks 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, clause 4(xiii) 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(xiv) of the Companies (Auditors'' Report) Order, 2003 is 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 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 nor have we been informed of such case by the management. For and on behalf of

J.C. Bhalla and Co.

Chartered Accountants

FRN : 001111N

Sudhir Mallick

Place : Noida (U.P) Partner

Date : May 23, 2013 Membership No.80051


Mar 31, 2012

We have audited the attached Balance Sheet of Triveni Turbine Limited as at 31st March 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 report of the auditors of the Company's Bangalore Unit, 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 report of the auditors of the Company's Bangalore Unit where such audit has not been conducted by us.

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

d) The report of the auditors of the Company's Bangalore Unit has been forwarded to us and has 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 31st March 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 31st March, 2012;

b) In the case of the Statement of Profit and Loss, 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.

Referred to in Paragraph "1" of our report of even date on the accounts for the year ended March 31, 2012 of Triveni Turbine Limited.

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

b) The fixed assets have been physically verified by the management during the year. As explained to us, no material discrepancies were noticed on such verification as compared to the book records.

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. 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 physical 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) The Company has not granted any loan, secured or unsecured to companies, firms or other parties covered in the register maintained under Section 301 of the Act. Accordingly paragraphs 4(iii)(b), 4(iii)(c) and 4(iii)(d) of the Companies (Auditors' Report) Order, 2003 are not applicable to the Company.

b) The Company has taken unsecured loan from a Company covered in the register maintained under Section 301 of the Act. The maximum amount involved during the year was Rs 203.90 Million and outstanding balance at the end of the year was Rs Nil.

c) In our opinion and according to the information, rate of interest and other terms and conditions on which loan has been taken by the Company are not prima facie, prejudicial to the interest of the Company.

d) In respect of the loan taken, the Company is regular in repaying the principal amount as stipulated and has been regular in the payment of interest.

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) According to the information and explanations given to us, we are of the opinion that the particulars of all contracts or arrangements that need to be entered into the register maintained under section 301 of the Companies Act, 1956 have been so entered.

b) According to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except that for the purchase of Gears, Gear Boxes, Spares and Services received, payment of rent, sale of Spare parts and rendering of Services no comparable quotations are available. We are informed by the management that the charges so paid and received for such transactions, are reasonable having regard to the volume of business, quality and the specialised nature of goods and services involved.

6. The Company has not accepted any deposit from the public under the provisions of Section 58A, 58AA or any other relevant provision of the Companies Act, 1956 and the rules framed there under.

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 account maintained by the Company pursuant to the Rules made by the Central Government for maintenance of cost records 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 made and 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 31st March, 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 income tax, sales tax, custom duty, wealth tax and cess which have not been deposited on account of any dispute. Disputed excise duty and service tax which have not been deposited on account of matters pending before appropriate authorities is as under:

1 Central Excise Act, 1944 Excise Duty FY 1998-99 5.44 2.80 Hon'ble Supreme Court of India

2 Central Excise Act, 1944 Excise Duty FY 2000-01 To FY 2003-04 30.88 23.35 Hon'ble Supreme Court of India

3 Central Excise Act, 1944 Excise Duty FY 2007-08 3.36 - Commissioner of Central Excise (Appeals)

4 Finance Act 1994 Service Tax FY 2007-08 to FY 2009-10 12.80 - Commissioner of Central and FY 2011-12 Excise (Appeals) II. Bangalore 10. The Company has no accumulated losses as at 31st March 2012 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 explanations given to us, we are of the opinion that the Company has not defaulted in repayment of dues to banks 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, clause 4(xiii) 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(xiv) of the Companies (Auditors' Report) Order, 2003 is 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 have been applied for the purpose for which they were raised. Further, the term loans transferred to the Company pursuant to the Scheme of Arrangement sanctioned by the Hon'ble Allahabad High Court are considered to have been applied for the purpose for which they were obtained.

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 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 : May 07, 2012 Membership No.80051

 
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