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Auditor Report of TVS Electronics Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of TVS Electronics Limited, Chennai - 600 006 ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

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.

Auditors' 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

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 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 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 sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements read together with the annexure to our report 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;

i. in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2015;

ii. in the case of the Statement of Profit and Loss, 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.

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 in terms of sub-section (11) of section 143 of the Act, we give in Annexure, a statement on the matters specified in 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.

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

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

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

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

i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer note no. 26(5) to the financial statements;

ii. The Company did not have any long-term contracts including derivative contract 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.

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

(b) The Assets are physically verified, in phases, by the management during the year as per the regular programme of verification, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. The discrepancies noticed on such verification have been appropriately dealt with in the books of accounts.

(ii) (a) The inventory has been physically verified at reasonable intervals during the year by the management. In our opinion, the frequency of such verification is adequate. It was represented to us that inventories with third parties are also verified from time to time.

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

(c) In our opinion, the company has maintained proper records of inventory. The discrepancies between the physical stocks and the book stocks were not material and have been properly dealt with in the books of account.

(iii) During the year, the company has not granted loan to any company, firm or other parties covered in the register maintained under section 189 of the Companies Act, 2013.

(iv) In our opinion and 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, with regard to purchase of inventory, fixed assets and for the sale of goods and services. During the course of our audit, no continuing failure has been noticed in the internal control system.

(v) The company has not accepted deposits within the meaning of sections 73 to 76 of the Companies Act, 2013, during the year.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government under section 148(1) of the Companies Act, 2013 for maintenance of cost records and are of the opinion that prima-facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) According to the records provided to us, the company is regular in depositing undisputed statutory dues including Provident Fund, Employees' State Insurance, Income Tax, Sales Tax, Wealth Tax,

Duty of Customs, Duty of Excise, Value Added Tax, Cess and other statutory dues with the appropriate authorities. However, we have observed a few instances of belated remittance of Service Tax and Tax Deducted at Source.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax and Cess were in arrears, as at 31st March 2015 for a period of more than six months from the date they became payable.

(c) According to information and explanations given to us, the following are the details of the disputed dues, that were not deposited with the concerned authorities:

Name of the Amount Nature of dues Statute (Rs. in lakhs)

Sales Tax - Sales tax 84.69 Central Sales Tax / Value Added Tax of 7.25 various states

Income Tax Act, Income Tax 429.08 1961

Tax deducted at Source 14.09 and interest thereon

Central Excise Excise Duty 13.23 Act, 1944



Name of the Statute Forum where dispute is pending

Sales Tax - Central Sales Tax / Value Added Tax of various states Departmental Authorities of various States

Kerala Agricultural Income Tax & Sales Tax Appellate Tribunal

Income Tax Act, 1961 Commissioner of Income Tax (Appeals), Chennai.

Central Excise Act, 1944 Customs, Excise and Service Tax Appellate Tribunal, Chennai (CESTAT).

(d) During the year the company has transferred the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 1956 and rules made there under within time.

viii. The Company neither has accumulated losses as at the end of the financial year nor has incurred cash losses during the financial year and in the immediately preceding financial year.

(ix) Based on our verification and according to the information and explanations given by the management, the company has not defaulted in repayment of dues to its bank.

(x) The Company has not furnished any guarantees for loans taken by others from a bank or a financial institution.

(xi) The company has not availed any fresh term loan during the year. The loan availed in earlier year was applied for the purpose for which it was availed.

(xii) Based on the audit procedures adopted and information and explanations given to us by the management, no fraud on or by the company has been noticed or reported during the course of our audit.

For Sundaram & Srinivasan

Chartered Accountants Firm Registration No: 004207S

M BALASUBRAMANIYAM

Chennai Partner

May 06, 2015 Membership No: F7945




Mar 31, 2014

We have audited the accompanying financial statements of TVS Electronics Limited, Chennai - 600 006 ("the Company"), which comprise of Balance Sheet as at 31st March 2014, the Statement of Profit & Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

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

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 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. 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 31st March 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 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, 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 said Order.

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

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

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

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

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

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

Annexure referred to in our report of even date on the accounts for the year ended 31st March, 2014

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

b) The assets are physically verified, in phases, by the Management during the year as per the regular programme of verification, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. The discrepancies noticed on such verification have been appropriately dealt with in the books of account of the Company.

c) The assets disposed off during the year are not substantial and therefore do not affect the going concern status of the Company.

2. a) The stock of raw materials, stores, spare parts and finished goods other than in transit were physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable. In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

b) In our opinion and according to the information and explanations given to us, the procedures of 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.

c) In our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) During the year, the Company has granted interest bearing loan of Rs. 52 lakhs to a Company covered in the Register maintained under section 301 of the Companies Act, 1956.The rate of interest and other terms of the loan are not prima facie prejudicial to the interest of the company. The receipt of interest is regular. The said sum of Rs. 52 Lakhs along with the Opening Balance of Rs. 308.50 lakhs amounting to Rs. 360.50 Lakhs has been repaid by the Loanee.

b) During the year the Company has not availed any loan from companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and 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, with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major or minor weaknesses have been noticed in the internal control system.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the Management, we are of the opinion that the contracts or arrangements that need to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956 have been properly entered in the said Register. b) In our opinion and according to the information and explanations given to us, the transactions entered in the Register maintained under Section 301 and exceeding during the financial year by Rs. 5.00 lakhs in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

7. The internal audit system of the company is entrusted to a firm of Chartered Accountants, which in our opinion, is commensurate with its 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 under Section 209(1)(d) of the Companies Act, 1956 for maintenance of cost records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

9. a) According to the records provided to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities. However delays were noticed in respect of remittance of Professional tax, Service tax and Income tax deducted at source in a few cases.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears, as at 31st March, 2014 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, the following are the details of the disputed dues, that were not deposited with the concerned authorities.

Name of the Amount Statute Nature of dues (Rs. in Forum where dispute lakhs) is pending

Sales Tax - Sales tax 120.84 Departmental Central Sales Tax / Authorities of Value Added Tax of various States various states 7.25 Tribunal

Income Tax Act, Income Tax 267.91 1961 Commissioner of Tax deducted 14.09 Income Tax at Source and (Appeals), Chennai. interest thereon

Finance Act, Service Tax 121.15 Customs, Excise 1994 and Service Tax Appellate Tribunal, Chennai ( CESTAT).

Central Excise Excise Duty 13.23 Customs, Excise Act, 1944 and Service Tax Appellate Tribunal, Chennai (CESTAT).

10. The Company has made cash profit during the year as also in the immediately preceding financial year. Taking into account, the brought forward loss of the preceding year, the surplus is negative. However, this is not in excess of fifty percentage of net worth.

11. Based on our verification and according to the information and explanations given by the Management, the Company has not defaulted in repayment of dues to any financial institution or bank.

12. Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit / nidhi / mutual benefit fund / society and as such clause (xiii) of the Order is not applicable.

14. The Company is not dealing or trading in shares, securities, debentures and other investments. The Company is holding only Long Term Investments. During the year, the Company''s wholly owned subsidiary, namely, Tumkur Property Holdings Limited, Chennai was dissolved and 8000 units in TVS Shriram Growth Fund have been sold to another wholly owned subsidiary of the Company, namely, Prime Property Holdings Limited, Chennai. Proper records have been maintained and timely entries are made in Investment Register maintained pursuant to Section 372 of the Companies Act, 1956. All investments are held in the Company''s own name except in the case of investment in wholly owned subsidiary where certain numbers of shares are held by nominees as provided in Section 49 (3) of the Companies Act, 1956.

15. The Company has not furnished any guarantee for loans taken by others from bank or financial institution.

16. In our opinion, the term loans were applied for the purpose for which the loans were obtained.

17. On the basis of our examination, the Company has not used the funds raised on short-term basis for long-term investments.

18. During the year, the Company has not allotted any shares on preferential basis to parties and companies covered in the Register maintained under section 301 of the Companies Act, 1956. 3,50,000 Equity shares allotted during the year on preferential basis to a person not covered in Register under section 301of the Companies Act, 1956.

19. During the year, the Company has not issued any debentures.

20. During the year, the Company has not raised any money by public issue.

21. During the year, one customer has informed the Company of some misappropriation of spare parts by one of the employees of the Company. However, no claim has been made by the Customer. The matter is under investigation.

For Sundaram & Srinivasan Chartered Accountants Firm Registration No: 004207S

M BALASUBRAMANIYAM Chennai Partner May 08, 2014 Membership No: F7945


Mar 31, 2013

We have audited the accompanying fnancial statements of TVS Electronics Limited, Chennai - 600 006 ("the Company") which comprise of Balance Sheet as at 31st March 2013, and the Statement of Proft and Loss and Cash Flow Statement for the year ended on that date along with Notes on accounts.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these fnancial statements that give a true and fair view of the fnancial position, fnancial performance and cash fows of the Company in accordance with the Accounting Standards refrred 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 fnancial 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 fnancial 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 consolidated fnancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fnancial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the fnancial 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 fnancial 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 fnancial statements.

We believe that the audit evidence we have obtained is suffcient 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 fnancial statements give the information required by the Act in the manner so required and 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 Proft 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 fows 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 specifed in paragraphs 4 and 5 of the Order.

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

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

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

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

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

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

f) Levy and collection of Cess on Turnover or Gross Receipts.

Since the Central Government has not issued any notifcation 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.

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

b) The assets are physically verified, in phases, by the Management during the year as per the regular programme of verification, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. The discrepancies noticed on such verification have been appropriately dealt with in the books of account of the Company.

c) The assets disposed off during the year are not substantial and therefore do not affect the going concern status of the Company.

2. a) The stock of raw materials, stores, spare parts and

finished goods other than in transit were physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable. In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

b) In our opinion and according to the information and explanations given to us, the procedures of 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.

c) In our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) During the year, the Company has granted interest bearing loan of ? 108.50 lakhs to a Company covered in the Register maintained under Section 301 of the Companies Act, 1956.The rate of interest and other terms of the loan are not prima facie prejudicial to the interest of the company. The receipt of interest is regular. The amount due from such company as at year end viz 31st March 2013 is ?308.50 lakhs (including the opening balance as on 01/04/2012 of f 200 lakhs).The principal is due for repayment on or before 31st March, 2014.

b) During the year the Company has not availed any loan from companies covered in the Register maintained under Section 301 of the Companies Act 1956.

4. In our opinion and 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, with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control system.

5. a) Based on the audit procedures applied by us and according to the information and explanations provided by the Management, we are of the opinion that the contracts or arrangements that need to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956 have been properly entered in the said Register.

b) In our opinion and according to the information and explanations given to us, the transactions entered in the Register maintained under Section 301 and exceeding during the financial year by ? 5.00 lakhs in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time..

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

7. The internal audit system, of the Company is entrusted to a firm of Chartered Accountants, which in our opinion, is commensurate with its 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 under Section 209(1)(d) of the Companies Act, 1956 for maintenance of cost records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. a) According to the records provided to us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-Tax, Sales-Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities. However delays were noticed in respect of remittance of Service tax and Income tax deducted at source in two instances.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears, as at 31st March, 2013 for a period of more than six months from the date they became payable.

10. The Company neither has accumulated losses as at the end of the financial year nor has incurred cash loss during the financial year and in the immediately preceding year.

11. Based on our verification and according to the information and explanations given by the Management, the Company has not defaulted in repayment of dues to any financial institution or bank.

12. Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit / nidhi / mutual benefit fund / society and as such clause (xiii) of the Order is not applicable.

14. The Company is not dealing or trading in shares, securities, debentures and other investments. The Company is holding only Long Term Investments. All investments are held in the Company''s own name except in the case of investment in wholly owned subsidiaries where certain number of shares are held by nominees as provided in Section 49 (3) of the Companies Act, 1956.

15. The Company has not given any guarantee for loans taken by others from bank or financial institution.

16. In our opinion, the term loans were applied for the purpose for which the loans were obtained.

17. On the basis of our examination, the Company has not used the funds raised on short-term basis for long-term investments.

18. During the year, the Company has not allotted any shares on preferential basis to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. During the year, the Company has not issued any debentures.

20. During the year, the Company has not raised any money by public issue.

21. Based on the audit procedures adopted and information and explanations given to us by the Management, no fraud on or by the Company has been noticed or reported during the course of our audit.

For Sundaram & Srinivasan

Chartered Accountants

Firm Registration No.: 004207S

M. BALASUBRAMANIYAM

Chennai Partner

20th May, 2013 Membership no.: F7945


Mar 31, 2012

We have audited the attached Balance Sheet of M/s. TVS Electronics Limited, "Jayalakshmi Estates", 29, Haddows Road, Chennai - 600 006 as at 31s1 March, 2012, the Statement of Profit & Loss for the year ended 31st March, 2012 annexed thereto and the Cash Flow Statement for the year ended on that date. 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.

1. We conducted our audit in accordance with the Auditing Standards generally accepted in India. These 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor's Report) Order, 2003 and amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to above, we state that -

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

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

(c) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement referred to in this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and the 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.

(e) On the basis of written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that no Director is disqualified from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the said date;

(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 notes thereon, particularly the notes under AS13 (Accounting for Investments), 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:

(i) in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

(ii) in so far as it relates to the Statement of Profit and Loss, of the profit of the Company for the year ended 31s1 March, 2012; and

(iii) in so far as it relates to the Cash Flow Statement, of the cash flows for the year ended on that date.

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

b) The assets are physically verified, in phases, by the Management during the year as per the regular programme of verification, which in our opinion is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. The discrepancies noticed on such verification have been appropriately dealt with in the books of account of the Company.

c) During the year the Company has disposed off unused assets and the loss arising there from is disclosed as exceptional item of expenditure. The assets disposed off during the year are not substantial and therefore do not affect the going concern status of the Company.

2. a) The stock of raw materials, stores, spare parts and

finished goods other than in transit were physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable. In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

b) In our opinion and according to the information and explanations given to us, the procedures of 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.

c) In our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) During the year, the Company has granted unsecured loan of Rs 521 lakhs (Balance as at 31.03.2012 Rs 200 lakhs) to a Company covered in the Register maintained under Section 301 of the Companies Act, 1956. The rate of interest and other terms and conditions of the loan are not prima facie prejudicial to the interest of the Company. The receipt of Principal amount and interest thereon are regular. As on the date of Balance Sheet there was no overdue amount recoverable on the said unsecured loans.

b) During the year the Company has not availed any loan from companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and 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, with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control system.

5. a) Based on the audit procedures applied by us and

according to the information and explanations provided by the Management, we are of the opinion that the contracts or arrangements that need to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956 have been properly entered in the said Register.

b) In our opinion and according to the information and explanations given to us, the transactions entered in the Register maintained under Section 301 and exceeding during the financial year by Rs 5.00 lakhs in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

7. The Company has an internal audit system, which in our opinion, is commensurate with its 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 under Section 209(1 )(d) of the Companies Act, 1956 for maintenance of cost records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. a) According to the records provided to us, the Company

is generally regular in depositing undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income-Tax, Sales-Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other statutory dues with the appropriate authorities. However marginal delay was noticed in respect of one Employee State Insurance remittance.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears, as at 31st March, 2012 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, the following are the details of the disputed dues, that were not deposited with the concerned authorities.

Name of the Nature of dues Amount Forum where dispute is Statue (Rs in Pending lakhs)

Sales Tax Statutory Forms 270.08 Assistant Commissioner Acts of Entry Tax/ /Deputy Commissioner various Warranty Appellate Authorities - States replacement Commercial Taxes of stock related/ various states. Turnover dispute

Income Tax a) Cost of 220.20 Commissioner of Income Tax Act, 1961 acquisition of (Appeal), Chennai. certain capital asset sold and determination of capital gain. b) Claim of TDS 49.65 disallowed.

c) Inventory 193.82 write-off disallowed.

d) Wrong levy of 14.42 interest under various provisions of the Act.

Service Tax Dispute on 121.15 Customs, Excise and Service availment of Tax Appellate Tribunal, input tax credit Chennai (CESTAT). for exempted and dutiable goods.

Excise Refund disputed 13.23 Customs, Excise and Service Tax Appellate Tribunal, Chennai (CESTAT).

Customs Special 10.25 The Commissioner of Customs Additional Duty (Appeals), Chennai refund claim rejected by department.

10. The Company neither has accumulated losses as at the end of the financial year nor has incurred cash losses during the financial year and in the immediately preceding year.

11. Based on our verification and according to the information and explanations given by the Management, the Company has not defaulted in repayment of dues to any financial institution or bank.

12. Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit / nidhi / mutual benefit fund / society and as such clause (xiii) of the Order is not applicable.

14. The Company is not dealing or trading in shares, securities, debentures and other investments. All investments are held in the Company's own name except in the case of investment in wholly owned subsidiaries where certain number of shares are held by nominees as provided in Section 49 (3) of the Companies Act, 1956.

15. The Company has not given any guarantee for loans taken by others from bank or financial institution.

16. In our opinion, the term loans were applied for the purpose for which the loans were obtained.

17. On the basis of our examination, the Company has not used the funds raised on short-term basis for long-term investments.

18. During the year, the Company has not allotted any shares on preferential basis to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. During the year, the Company has not issued any debentures.

20. During the year, the Company has not raised any money by public issue.

21. Based on the audit procedures adopted and information and explanations given to us by the Management, no fraud on or by the Company has been noticed or reported during the course of our audit.

For SUNDARAM & SRINIVASAN

Chartered Accountants

Firm Registration No: 004207S



M BALASUBRAMANIYAM

Partner

Chennai Membership No. F7945

May 3,2012.


Mar 31, 2011

We have audited the attached Balance Sheet of M/s. TVS Electronics Limited, "Jayalakshmi Estates", 29, Haddows Road, Chennai - 600 006 as at 31st March, 2011, the Profit & Loss Account for the year ended 31st March, 2011 annexed thereto and the Cash Flow Statement for the year ended on that date. 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.

1. We conducted our audit in accordance with the Auditing Standards generally accepted in India. These 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditor's Report) Order, 2003 and amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to above, we state that -

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

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

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss Account and the 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;

(e) On the basis of written representations received from the Directors of the Company and taken on record by the Board of Directors, we report that no Director is disqualified from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the said date;

(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 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 generally accepted in India:

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

(ii) in so far as it relates to the Profit and Loss Account, of the profit of the Company for the year ended 31st March, 2011; and

(iii) in so far as it relates to the Cash Flow Statement, of the cash flows for the year ended on that date.

Annexure to the Auditors' Report Annexure referred to in our report of even date on the accounts for the year ended 31st March, 2011

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

b) The assets are physically verified, in phases, by the Management during the year as per the regular programme of verification, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such physical verification. The discrepancies noticed on such verification have been appropriately dealt with in the books of account of the Company.

c) During the year Company has disposed off unused assets and the loss arising therefrom is disclosed as exceptional items of expenditure (vide Schedule XIX). The assets disposed off during the year are not substantial and therefore does not affect the going concern status of the Company.

2. a) The stock of raw materials, stores, spare parts and

finished goods other than in transit were physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable. In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

b) In our opinion and according to the information and explanations given to us, the procedures of 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.

c) In our opinion, the Company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) During the year, the Company has not granted any unsecured loans to companies, firms or other parties covered in the Register maintained under Section 301 of the Companies Act, 1956. Hence reporting on rate of interest charged and other conditions does not arise. In respect of unsecured loans in the nature of Inter Corporate Deposits made in an earlier year outstanding at the commencement of year under report, the Company has received back the outstanding principal due and interest thereon in full.

b) During the year the Company has not availed any loan from companies covered in the Register maintained under Section 301 of the Companies Act 1956.

4. In our opinion and 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, with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control system.

5. a) Based on the audit procedures applied by us and

according to the information and explanations provided by the Management, we are of the opinion that the contracts or arrangements that need to be entered in the Register maintained in pursuance of Section 301 of the Companies Act, 1956 have been properly entered in the said Register.

b) In our opinion and according to the information and explanations given to us, the transactions entered in the Register maintained under Section 301 and exceeding during the financial year by Rs. 5.00 lakhs in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

7. The Company has an internal audit system, which in our opinion, is commensurate with its 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 under Section 209(1)(d) of the Companies Act, 1956 for maintenance of cost records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. a) According to the records provided to us, the Company is generally regular in depositing 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 with the appropriate authorities. However, marginal delays were noticed in respect of ESI remittance in 3 instances.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess were in arrears, as at 31st March, 2011 for a period of more than six months from the date they became payable.

c) According to the information and explanations given to us, the following are the details of the disputed dues, that were not deposited with the concerned authorities.

Name of the Nature of dues Amount Statute (Rs. in Lakhs)

Sales Tax Acts of Statutory Forms/Entry Tax/ Warranty 306.98 various states replacement stock related/ Turnover dispute

Income Tax Act, Disallowance of expenditure relating 1294.22 1961 to valuation assets acquired on amalgamation.

Income Tax Act, Payments to Foreign Consultants, Cost 228.02 1961 of acquisition of an asset as regards computation of Capital Gain and time of taxing of income received in advance and TDS demand based on E-Return filed.

Service Tax Dispute on availment of input tax 121.15 credit for exempted and dutiable goods

Excise Refund disputed 13.23

Customs Special Additional Duty (SAD) refund 10.25 claim rejected by department

Name of the Forum where dispute Statute is pending

Sales Tax Acts of Assistant Commissioner/Deputy various states Commissioner / Appellate authorities - Commercial Taxes of various states

Income Tax Act, Commissioner of 1961 Income Tax (Appeal), Chennai Income Tax Act, Commissioner of 1961 Income Tax (Appeal), Chennai Service Tax Customs, Excise and Service Tax Appellate Tribunal, Chennai (CESTAT)

Excise Customs, Excise and Service Tax Appellate Tribunal, Chennai ( CESTAT)

Customs The Commissioner of Customs (Appeals), Chennai

10. The Company neither has accumulated losses as at the end of the financial year nor has incurred cash loss during the financial year. The Company incurred cash loss in the immediately preceding financial year.

11. Based on our verification and according to the information and explanations given by the Management, the Company has not defaulted in repayment of dues to any financial institution or bank.

12. Based on our examination and according to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The Company is not a chit / nidhi / mutual benefit fund / society and as such clause (xiii) of the Order is not applicable.

14. The Company is not dealing or trading in shares, securities, debentures and other investments. All investments are held in the Company's own name except in the case of investment in wholly owned subsidiaries where certain number of shares are held by nominees as provided in Section 49 (3) of the Companies Act, 1956.

15. The Company has not given any guarantee for loans taken by others from bank or financial institution.

16. In our opinion, the term loans were applied for the purpose for which the loans were obtained.

17. On the basis of our examination, the Company has not used the funds raised on short-term basis for long-term investments.

18. During the year, the Company has not allotted any shares on preferential basis to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

19. During the year, the Company has not issued any debentures.

20. During the year, the Company has not raised any money by public issue.

21. Based on the audit procedures adopted and information and explanations given to us by the Management, no fraud on or by the Company has been noticed or reported during the course of our audit.

For SUNDARAM & SRINIVASAN Chartered Accountants Firm Registration No: 004207S

M BALASUBRAMANIYAM Partner Membership No: F7945 Chennai May 27, 2011


Mar 31, 2010

We have audited the attached Balance Sheet of M/s. TVS Electronics Limited, "Jayalakshmi Estates, 29, Haddows Road, Chennai - 600 006 as at 31st March, 2010, the Profit & Loss Account for the year ended 31st March, 2010 annexed thereto and the cash flow statement for the year ended on that date. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

1. We conducted our audit in accordance with the auditing

standards generally accepted in India. These 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 presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion.

2. As required by the Companies (Auditors Report) Order, 2003 and amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

3. Further to our comments in the Annexure referred to above, we state that -

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

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

(c) The Balance Sheet, Profit and Loss Account and Cash Flow Statement referred to in this report are in agreement with the books of account;

(d) In our opinion, the Balance Sheet, Profit and Loss account and the 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.

(e) On the basis of written representations received from the directors of the company, as on March 31, 2010 and taken on record by the Board of Directors, we report that no director is disqualified from being appointed as a director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956 on the said date;

(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 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 generally accepted in India:

(i) in so far as it relates to the Balance Sheet, of the state of affairs of the Company as at 31st March, 2010;

(ii) in so far as it relates to the Profit and Loss Account, of the loss of the company for the year ended 31st March, 2010; and

(iii) in so far as it relates to the cash flow statement, of the cash flows for the year ended on that date.



Annexure to the Auditors Report

Annexure referred to in our report of even date on the accounts for the year ended 31st March, 2010.

1. a) The company has maintained proper records

showing full particulars including quantitative details and situation of the fixed assets.

b) The assets are physically verified, in phases, by the Management during the year as per the regular programme of verification, which in our opinion, is reasonable having regard to the size of the company and the nature of its assets. No material discrepancies were noticed on such physical verification. The discrepancies noticed on such verification have been appropriately dealt with in the books of account of the company.

c) The assets disposed off during the year are not substantial and therefore does not affect the going concern status of the company.

2. a) The stock of raw materials, stores, spare parts and

finished goods other than in transit were physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable. In respect of inventory with third parties, which have not been physically verified, there is a process of obtaining confirmation from such parties.

b) In our opinion and according to the information and explanations given to us, the procedures of 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.

c) In our opinion, the company has maintained proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been properly dealt with in the books of account.

3. a) During the year, the company has not granted any

unsecured loans to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Hence reporting on rate of interest charged and other conditions does not arise. However, in respect of unsecured loans in the nature of Inter Corporate Deposits made in an earlier year outstanding at the commencement of year under report, the company is regularly receiving the interest at contracted rate. Principal amount received back

during the year is Rs. 19 lakhs and Principal outstanding is Rs. 164.29 lakhs. The terms and other conditions of the loan are not prima facie prejudicial to interest of the company. b) During the year the company has taken unsecured loan of Rs 28 lakhs from the holding company covered in the register maintained under section 301 of the Companies Act, 1956. The terms and other conditions of the loan are not prima facie prejudicial to interest of the company.Principal outstanding is Rs Nil at the end of the financial year.

4. In our opinion and 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, with regard to purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit, no major weaknesses have been noticed in the internal control system.

5. a. Based on the audit procedures applied by us and

according to the information and explanations provided by the management, we are of the opinion that the contracts or arrangements that need to be entered in the register maintained in pursuance of Section 301 of the Companies Act, 1956 have been properly entered in the said register. b. In our opinion and according to the information and explanations given to us, the transactions entered in the register maintained under Section 301 and exceeding during the financial year by Rs.5.00 lakhs in respect of each party have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

6. The company has not accepted any deposits from the public. (Please refer note below Schedule XII).

7. The company has an internal audit system, which in our opinion, is commensurate with its 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 under Section 209(1)(d) of the Companies Act, 1956 for maintenance of cost records and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

9. a. According to the records provided to us, the company is generally regular in depositing 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 with the appropriate authorities. However, a solitary instance of delay of six days was noticed in respect of ESI remittance.

b. According to the information and explanations given to us, no undisputed amounts payable in

respect of income tax, wealth tax, sales tax, service tax, customs duty, excise duty and cess were in arrears, as at 31st March, 2010 for a period of more than six months from the date they became payable.

c. According to the information and explanations given to us, the following are the details of the disputed dues, that were not deposited with the concerned authorities.

Name of the Statute Nature of dues Amount Forum where dispute (Rs.in lakhs) is pending

Sales Tax Act Statutory Forms / Entry Tax/ 134.19 Assistant Commiss- ioner / various states Warranty replacement stock Deputy Commissi- oner / Appellate related / Turnover dispute authorities-Comme- rcial Taxes of various states

Income Tax Act, 1961 Disallowance of expenditure 225.85 Income tax Appellate Tribunal relating to payments to foreign constultants, cost of acquisition of an asset as regards compu- tation of capital gain and time of taxing of income received in advance

10. The company has no accumulated losses as at the end of the financial year. It has incurred cash loss during the financial year. There is cash loss in the immediately preceding financial year.

11. Based on our verification and according to the information and explanations given by the management, the company has not defaulted in repayment of dues to any financial institution or bank.

12. Based on our examination and according to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

13. The company is not a chit / nidhi / mutual benefit fund / society and as such clause (xiii) of the order is not applicable.

14. The company is not dealing or trading in shares, securities, debentures and other investments. All investments are held in the companys own name except in the case of investment in wholly owned subsidiaries where certain number of shares are held by nominees as provided in Section 49 (3) of the Companies Act, 1956.

15. The company has not given any guarantee for loans taken by others from bank or financial institution.

16. In our opinion, the term loans were applied for the purpose for which the loans were obtained.

17. On the basis of our examination, the company has not used the funds raised on short-term basis for long-term investments.

18. During the year, the company has not allotted any shares on preferential basis to parties and companies covered in the register maintained under Section 301 of the Companies Act, 1956.

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

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

21. Based on the audit procedures adopted and information and explanations given to us by the management, no fraud on or by the company has been noticed or reported during the course of our audit.

For SUNDARAM & SRINIVASAN Chartered Accountants Firm Registration No:004207S

M BALASUBRAMANIYAM Partner Membership No. F7945

Chennai

29th July, 2010



 
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