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Auditor Report of Ucal Fuel Systems Ltd.

Mar 31, 2015

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

Auditor's Responsibility

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

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. 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 give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion, we draw attention to Note No. 31 of the Notes forming part of Financial Statements for the year, in respect of impairment of investment in the foreign wholly owned subsidiary company M/s Amtec. Being a technical matter, we have relied on the estimates and assumptions made by the Company for not considering any provision for impairment/ diminution as at 31st March, 2015.

Report on Other Legal and Regulatory Requirements

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

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; and

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements

* Refer Note 30 to the financial statements;

ii the Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 7 and 11 to the financial statements; and

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

(g) Attention is invited to Note No.41, of Notes to Accounts, regarding managerial remuneration to directors, which is in excess of the limits prescribed by the Companies Act, 2013.

ANNEXURE TO THE AUDITOR'S REPORT

The Annexure referred to in our report to the members of UCAL FUEL SYSTEMS LIMITED ('the Company') for the year ended 31 March 2015. We report that:

(1) In respect of its Fixexd Assets

a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. The company is in the process of updating its Fixed Asset register.

b) The Company has a programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of 3 years. No material discrepancies were noticed on such verification. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets

(2) In respect of its Iventories

a) Physical verification of inventory has been conducted at reasonable intervals by the management.

b) The procedures for physical verification of inventory 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 and no material discrepancies were noticed on physical verification.

(3) The Company has not granted during the year, loans to bodies corporate covered in the register maintained under section 189 of the Companies Act, 2013 ('the Act').

(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, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in the internal control system of the Company.

(5) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public and hence compliance with directives issued by the reserve Bank of India and the provisions of Section 73 to 76 or any other relevant provisions of the Act and the rules framed there under are not applicable.

(6) As per the books and records produced to us and explanations offered thereon, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government under Sec 148 of the Companies Act, 2013, have been made and maintained. However we are not required and have not made any detailed examination of the said records, with a view to determine whether they are accurate or complete.

(7) a) According to the records produced, the company is generally regular in depositing with appropriate authorities

the undisputed applicable 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 and Cess.

b) According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess were outstanding at the year end, for a period of more than six months from the date they became payable.

c) As per the information and explanations given to us, following are the statutory dues which have not been deposited on account of dispute.

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

Income Tax Act Income Tax AY 2000-01 3.59

Income Tax Act Income Tax AY 2003-04 146.58

Income Tax Act Income Tax AY 2005-06 73.66

Income Tax Act Income Tax AY 2010-11 258.35

Income Tax Act Income Tax AY 2012-13 389.22

Central Excise Act Service Tax FY 2011-12 1.23

Central Excise Act Central Excise FY 2008-09 16.80

Central Excise Act Central Excise FY 2006-07 120.43

Central Excise Act Central Excise FY 2007-08 3.56

Central Excise Act Central Excise (August 1.83 2003 - June 2004)

Central Excise Act Central Excise (January 34.93

2001 - August 2003)

Central Excise Act FY 2002-03 44.14

Central Excise Act Service Tax-FY-2011-12 1.95

Central Sales Tax CST Plant-1 1.04

Central Sales Tax CST Plant 8 4.77

VAT Act VAT plant (7 and 8) 83.07

Indian Stamp Act Stamp Duty 31.37

Name of the Forum where dispute is pending Statute

Income Tax Act High Court of Madras

Income Tax Act CIT Appeals, Chennai

Income Tax Act ITAT, Chennai

Income Tax Act ITAT, Chennai

Income Tax Act CIT Appeals, Chennai

Central Excise Act Additional Commissioner of Service Tax

Central Excise Act Commissioner of Central Excise, Pondicherry

Central Excise Act Joint Commissioner of Central Excise

Central Excise Act Joint Commissioner of Central Excise, Delhi

Central Excise Act Assistant Commissioner of Central Excise, Tambaram Division

Central Excise Act Chief Commissioner Excise (Appeals)

Central Excise Act Additional Commissioner, Gurgaon.

Central Excise Act Commissioner Appeals (Gurgoan)

Central Sales Tax Appellate Deputy Commissioner

Central Sales Tax Appellate Deputy Commissioner, Chennai

VAT Act Appellate Deputy Commissioner, Chennai

Indian Stamp Act Inspector General of Registration (Appeals) Chennai, Tamil Nadu

d) According to the information and explanations given to us the amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules there under has been transferred to such fund within time

(8) The company does not have accumulated losses as at the end of the Financial Year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(9) The company has not defaulted in repayment of dues to any financial institutions or bank or debenture holders

(10) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantees for loans taken by others from bank and financial institutions are not prima facie prejudicial to the interests of the company.

(11) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

(12) Based upon the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For G BALU ASSOCIATES, Chartered Accountants FRN: 000376S

RAJAGOPALAN B Place : Chennai Partner Date : 28.05.2015 Membership No. 217187


Mar 31, 2014

We have audited the accompanying financial statements of UCAL FUEL SYSTEMS Limited ("the Company") which comprise the Balance Sheet as at 31st March 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

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") read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Sec 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s 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 March 31st, 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.

Emphasis of Matter

We draw attention to Note No. 31 of the Notes to Accounts with regard to the diminution in the value of investment in the subsidiary company M/s Amtec Precision Products Inc. Our opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

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

e. On the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on 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.

f. Attention is invited to Note No.40, of Notes to Accounts, regarding managerial remuneration to directors, which is in excess of the limits prescribed by the Companies Act, 1956.

(1) a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. The company is in the process of updating its Fixed Asset register.

b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

c) No substantial parts of fixed assets have been disposed off during the year.

(2) a) Physical verification of inventory has been conducted at reasonable intervals by the management.

b) The procedures for physical verification of inventory 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 and no material discrepancies were noticed on physical verification.

(3) The company has taken unsecured loan from few parties covered in the Register maintained under Sec. 301 of the Act to the extent of Rs. 4.33 Crores (outstanding as on 31.03.2013 is Rs. 7.69 Crores). The rate of interest and other terms and conditions of the loan taken is prima-facie not prejudicial to the interest of the company. There is no stipulation regarding the repayment of the loan.

(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, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in the internal control system of the Company.

(5) In our opinion and according to the information and explanations given to us

a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section, and

b) the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(6) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public and hence compliance with directives issued by the Reserve Bank of India and the provisions of Sec. 58 A, 58 AA or any other relevant provisions of the Act and the rules framed thereunder are not applicable.

(7) In our opinion, the company has adequate internal audit system commensurate with its size and nature of its business.

(8) As per the books and records produced to us and explanations offered thereon, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government under Sec. 209 (1) (d) of the Companies Act, 1956, have been made and maintained. However we are not required and have not made any detailed examination of the said records, with a view to determine whether they are accurate or complete.

(9) a) According to the records produced, the company is generally regular in depositing with appropriate authorities the undisputed applicable 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 and Cess.

b) As per the information and explanations given to us, following are the statutory dues which have not been deposited on account of dispute.

Nature of Nature of the Dues Amount Dues/Statute Rs. in Lakhs

Income Tax Act Income Tax AY 1996-97 14.02

Income Tax Act Income Tax AY 1999-00 4.12

Income Tax Act Income Tax AY 2000-01 3.59

Income Tax Act Income Tax AY2005-06 2.55

Income Tax Act Income Tax AY 2005-06 101.91

Income Tax Act Income Tax AY 2006-07 171.43

Income Tax Act Income Tax AY 2007-08 2.09

Central Excise Service Tax FY 2005-06 1.93 act

Central Excise Act Service Tax FY 2011-12 0.69

Central Excise Act Service Tax FY 2011-12 1.23

Central Excise Act Service Tax FY 2010-11 4.81

Central Excise Act Central Excise FY-2008-09 16.80

Central Excise Act Central Excise FY 2006-07 120.43

Central Excise Act Central Excise FY 2007-08 3.56

Central Excise Act Central Excise (August 2003- June-2004) 1.83

Central Excise Act Central Excise (January 2001 - August 2003) 34.93

Central Excise Act FY 2002-03 44.14

Central Sales Tax CST Plant-1 1.04 act

Central Sales Tax CST Plant 8 4.77

VAT Act VAT plant (7 & 8) 83.07

Indian Stamp Act Stamp Duty 31.37

Nature of Dues/ Forum where dispute is pending

Income Tax Act High Court of Madras

Income Tax Act High Court of Madras

Income Tax Act High Court of Madras

Income Tax Act CIT Appeals III, Chennai

Income Tax Act CIT Appeals III, Chennai

Income Tax Act CIT Appeals III, Chennai

Income Tax Act CIT Appeals III, Chennai

Central Excise Act Commissioner of Central Excise Appeals

Central Excise Act Deputy Commissioner of Service Tax

Central Excise Act Commissioner (Appeals) Central Excise

Central Excise Act Deputy Commissioner, Tambaram

Central Excise Act Commissioner of Central Excise, Pondicherry

Central Excise Act Joint Commissioner of Central Excise

Central Excise Act Joint Commissioner of Central Excise, Delhi

Central Excise Act Assistant Commissioner of Central Excise, Tambaram Division

Central Excise Act Chief Commissioner Excise (Appeals)

Central Excise Act Additional Commissioner, Gurgaon.

Central sales tax Act Appellate Deputy Commissioner

Central sales tax Act Appellate Deputy Commissioner, Chennai

VAT Act Appellate Deputy Commissioner, Chennai

Indian Stamp Act Inspector General of Registration (Appeals) Chennai, Tamil Nadu

(10) The company does not have accumulated losses as at the end of the Financial Year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(11) The company has not defaulted in repayment of dues to any financial institutions or bank or debenture holders.

(12) The company has not granted any 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 Fund, Nidhi or Mutual Fund or Society.

(14) The company is not dealing or trading in shares, securities, debentures and other investments.

(15) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantees for loans taken by others from bank and financial institutions are not prima facie prejudicial to the interests of the company.

(16) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

(17) On the basis of an overall examination of the accounts of the company, no funds raised on short term basis have been used for long term investments.

(18) The company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of Companies Act,1956.

(19) The company has not issued any debentures during the year

(20) The company has not raised any money through public issues during the year.

(21) Based upon the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.



For G. BALU ASSOCIATES, Chartered Accountants FRN: 000376S

G. BALASUBRAMANYAN Place: Chennai Partner Date:09.05.2014 Membership Number: 007628


Mar 31, 2013

Report on the Financial Statements

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

Management''s Responsibility 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.

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.

Emphasis of Matter

We draw attention to Note No. 31 of the Notes to Accounts with regard to the diminution in the value of investment in the subsidiary company M/s Amtec Precision Products Inc. Our opinion is not qualified in respect of this matter.

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.

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

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

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

f. Attention is invited to Note No.40, of Notes to Accounts, regarding managerial remuneration to directors, which is in excess of the limits prescribed by the Companies Act, 1956.

The Annexure referred to in our report to the members of UCAL FUEL SYSTEMS LIMITED (''the Company'') for the year ended 31 March 2013. We report that:

(1) a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets. The company is in the process of updating its Fixed Asset register.

b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

c) No substantial parts of fixed assets have been disposed off during the year.

(2) a) Physical verification of inventory has been conducted at reasonable intervals by the management.

b) The procedures for physical verification of inventory 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 and no material discrepancies were noticed on physical verification.

(3) The company has taken unsecured loan from few parties covered in the Register maintained under Sec. 301 of the Act to the extent of Rs. 7.69 Crores (outstanding as on 31.03.2012 is Rs. 8.84 Crores). The rate of interest and other terms and conditions of the loan taken is prima-facie not prejudicial to the interest of the company. There is no stipulation regarding the repayment of the loan.

(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, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in the internal control system of the Company.

(5) In our opinion and according to the information and explanations given to us

a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section, and

b) the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(6) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public and hence compliance with directives issued by the Reserve Bank of India and the provisions of Sec. 58 A, 58 AA or any other relevant provisions of the Act and the rules framed there under are not applicable.

(7) In our opinion, the company has adequate internal audit system commensurate with its size and nature of its business.

(8) As per the books and records produced to us and explanations offered thereon, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government under Sec. 209 (1) (d) of the Companies Act, 1956, have been made and maintained. However we are not required and have not made any detailed examination of the said records, with a view to determine whether they are accurate or complete.

(9) a) According to the records produced, the company is generally regular in depositing with appropriate authorities the undisputed applicable 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 and Cess.

b) As per the information and explanations given to us, following are the statutory dues which have not been deposited account of dispute.

Nature of Period Amount Forum where dispute Dues/Statute Rs. in Lakhs is pending

Income Tax Act Asst Year - 1996-97 14.02 High Court of Madras

Income Tax Act Asst Year - 1999-00 4.12 High Court of Madras

Income Tax Act Asst Year - 2000-01 3.59 High Court of Madras

Income Tax Act Asst Year - 2005-06 2.55 CIT Appeals III, Chennai

Income Tax Act Asst Year - 2005-06 101.91 CIT Appeals III, Chennai

Income Tax Act Asst Year - 2006-07 171.43 CIT Appeals III, Chennai

Income Tax Act Asst Year - 2007-08 2.09 CIT Appeals III, Chennai

Central Excise Act Financial year-2005-06 1.93 Commissioner of Central - Service Tax Excise Appeals

Central Excise Act Financial year-2011-12 4.36 Deputy Commissioner of - Service Tax Service Tax

Central Excise Act Financial year-2011-12 24.81 Additional Commissioner of - Service Tax Service Tax

Central Excise Act Financial year-2010-11 4.81 Deputy Commissioner, - Service Tax Tambaram

Central Excise Act Financial year-2007-08 17.00 Commissioner of Central Excise, Pondicherry

Central Excise Act Financial year-2006-07 120.43 Joint Commissioner of Central Excise

Central Excise Act Financial year-2007-08 3.56 Joint Commissioner of Central Excise, Delhi

Central Excise Act Central Excise (August 2003- June-2004) 1.83 Assistant Commissioner of Central Excise, Tambaram Division

Central Excise Act Central Excise (January 2001 - August 2003) 34.93 Chief Commissioner Excise (Appeals)

Central Excise Act Financial year-2002-03 44.14 Additional Commissioner, Gurgaon.

Central Sales Tax Act Financial year-2005-06 1.04 Appellate Deputy Commissioner

Central Sales Tax Act Financial year-2006-07 4.77 Appellate Deputy Commissioner, Chennai

VAT Act Financial year-2007-08 83.07 Appellate Deputy Commissioner, Chennai

ESI Act ESI (01.04. 2000-30.06. 2002) 1.27 Regional Director, Gurgaon

Indian Stamp Act Stamp Duty 31.37 Inspector General of Registration (Appeals) Chennai, Tamil Nadu

(10) The company does not have accumulated losses as at the end of the Financial Year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(11) The company has not defaulted in repayment of dues to any financial institutions or bank or debenture holders.

(12) The company has not granted any 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 Fund, Nidhi or Mutual Fund or Society.

(14) The company is not dealing or trading in shares, securities, debentures and other investments.

(15) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantees for loans taken by others from bank and financial institutions are not prima facie prejudicial to the interests of the company.

(16) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

(17) On the basis of an overall examination of the accounts of the company, no funds raised on short term basis have been used for long term investments.

(18) The company has not made any preferential allotment of shares during the year to parties and companies covered in the Register maintained under Section 301 of Companies Act,1956.

(19) The company has not issued any debentures during the year.

(20) The company has not raised any money through public issues during the year.

(21) Based upon the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For G. BALU ASSOCIATES,

Chartered Accountants

FRN: 000376S

R. RAVISHANKAR

Place : Chennai Partner

Date : 16.05.2013 Membership number: 26819


Mar 31, 2012

1. We have audited the attached Balance Sheet of M/s. UCAL FUEL SYSTEMS LIMITED, Chennai, as at 31 st March 2012, the Statement of Profit and Loss and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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.

3. a. Attention is invited to Note no.31 of Notes to Accounts with regards to the diminution in the value of investment in subsidiary company M/s Amtec Precision Products Inc.

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

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

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

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

c. The Balance Sheet and Profit and Loss Account dealt with by the report are in agreement with the books of account.

d. In our opinion the Balance Sheet and Profit and Loss Account 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 from the Directors and taken on record by the Board of Directors of the Company, we report that, none of the director is disqualified as on 31st March 2012 from being appointed as Director of the Company, in terms of Clause (g) of subsection (1) of Section 274 of Companies Act, 1956.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read 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;

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 of the company 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.

ANNEXURE TO THE AUDITOR'S REPORT STATEMENT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF M/s. UCAL FUEL SYSTEMS LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31st MARCH 2012

(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 at reasonable intervals and no material discrepancies were noticed on such verification.

c) No substantial parts of fixed assets have been disposed off during the year.

(2) a) Physical verification of inventory has been conducted at reasonable intervals by the management.

b) The procedures for physical verification of inventory 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 and no material discrepancies were noticed on physical verification.

(3) The company has taken unsecured loan from few parties covered in the Register maintained under Sec. 301 of the Act to the extent of Rs. 8.94 Crores (outstanding as on 31.03.2011 is Rs. 9.57 Crores). The rate of interest and other terms and conditions of the loan taken is prima-facie not prejudicial to the interest of the company. There is no stipulation regarding the repayment of the loan.

(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, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in the internal control system of the Company.

(5) In our opinion and according to the information and explanations given to us

a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section, and

b) the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(6) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public and hence compliance with directives issued by the Reserve Bank of India and the provisions of Sec. 58 A, 58 AA or any other relevant provisions of the Act and the rules framed there under are not applicable.

(7) In our opinion, the company has adequate internal audit system commensurate with its size and nature of its business.

(8) As per the books and records produced to us and explanations offered thereon, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government under Sec. 209 (1) (d) of the Companies Act, 1956, have been made and maintained.

(9) a) According to the records produced, the company is generally regular in depositing with appropriate authorities the undisputed applicable 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 and Cess.

b) As per the information and explanations given to us, following are the statutory dues which have not been deposited on account of dispute.

Name of the Statute Nature of the Dues Amount Forum where dispute in Lakhs is pending

Income Tax Act Income Tax AY 1996-97 14.02 High Court of Madras

Income Tax Act Income Tax AY 1999-00 4.12 High Court of Madras

Income Tax Act Income Tax AY 2000-01 3.59 High Court of Madras

Income Tax Act Income Tax AY 2005-06 2.55 CIT Appeals III, Chennai

Income Tax Act Income Tax AY 2005-06 101.91 CIT Appeals III, Chennai

Income Tax Act Income Tax AY 2006-07 171.43 CIT Appeals III, Chennai

Finance Act Service Tax 1.93 Commissioner of Central Excise Appeals Finance Act Service Tax (07.07.1997- 15.08.2002) 145.99 High Court of Madras

Finace Act Service Tax 0.10 Tribunal, Chennai

Central Excise Act Central Excise 17.00 Commissioner of Central Excise, Pondicherry

Central Excise Act Central Excise 2197.04 Joint Commissioner of Central Excise, Delhi

Central Excise Act Central Excise 120.43 Joint Commissioner of Central Excise

Central Excise Act Central Excise 15.21 Tribunal Excise Forum, Gurgaon

Central Excise Act Central Excise 3.56 Joint Commissioner of Central Excise, Delhi

Central Excise Act Central Excise (August 2003-June 2004) 1.83 Assistant Commiss -ioner of Central Excise, Tambaram Division

Central Excise Act Central Excise (January 2001 - August 2003) 34.93 Chief Commissioner Excise (Appeals)

ESI Act ESI (01.04.2000- 30.06.2002) 1.27 Regional Director, Gurgaon

Commercial Tax Sales Tax (31.05.2002 to 30.05.2011) 44.14 Additional Commissioner, Gurgaon

Indian Stamp Act Stamp Duty 31.37 Inspector General of Registration (Appeals) Chennai, Tamil Nadu

(10) The company does not have accumulated losses as at the end of the Financial Year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(11) The company has not defaulted in repayment of dues to any financial institutions or bank or debenture holders.

(12) The company has not granted any 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 Fund, Nidhi or Mutual Fund or Society.

(14) The company is not dealing or trading in shares, securities, debentures and other investments.

(15) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantees for loans taken by others from bank and financial institutions are not prima facie prejudicial to the interests of the company.

(16) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

(17) On the basis of an overall examination of the accounts of the company, no funds raised on short term basis have been used for long term investments.

(18) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of Companies Act, 1956.

(19) The company has not issued any debentures during the year.

(20) The company has not raised any money through public issues during the year.

(21) Based upon the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

For G. BALU ASSOCIATES,

FRN: 000376S

Chartered Accountants

R. RAVISHANKAR Place: Chennai Partner

Date : 10.08.2012 Membership number: 26819




Mar 31, 2011

1. We have audited the attached Balance Sheet of M/s. UCAL FUEL SYSTEMS LIMITED, Chennai, as at 31st March 2011, the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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.

3. a. Attention is invited to note no. 6 of schedule 19, i.e. notes to accounts with regard to the diminution in value of investment in subsidiary company M/s Amtec Precision Products Inc.

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

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

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

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

c. The Balance Sheet and Profit and Loss Account dealt with by the report are in agreement with the books of account.

d. In our opinion the Balance Sheet and Profit and Loss Account 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 from the Directors and taken on record by the Board of Directors of the Company, we report that, none of the director is disqualified as on 31st March 2011 from being appointed as Director of the Company, in terms of Clause (g) of subsection (1) of Section 274 of Companies Act, 1956.

f. In our opinion and to the best the of our information and according to the explanations given to us, the said accounts read 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;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March 2011,

b) in the case of the Profit and Loss Account, of the profit of the company 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.

ANNEXURE TO THE AUDITOR'S REPORT

STATEMENT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF M/s. UCAL FUEL SYSTEMS LIMITED 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 fixed assets.

b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

c) No substantial parts of fixed assets have been disposed off during the year.

(2) a) Physical verification of inventory has been conducted at reasonable intervals by the management.

b) The procedures for physical verification of inventory 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 and no material discrepancies were noticed on physical verification.

(3) The company has taken unsecured loan from one party covered in the Register maintained under Sec. 301 of the Act, outstanding balance as on 31.03.2011 is Rs. 9.58 Crores (Previous Year Rs.9.58 Crores) The rate of interest and other terms and conditions of the loan taken is prima-facie not prejudicial to the interest of the company. There is no stipulation regarding the repayment of the loan.

(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, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in the internal control system of the Company.

(5) In our opinion and according to the information and explanations given to us

a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section, and

b) the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(6) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from the public and hence compliance with directives issued by the reserve Bank of India and the provisions of Sec. 58 A, 58 AA or any other relevant provisions of the Act and the rules framed there under are not applicable.

(7) In our opinion, the company has adequate internal audit system commensurate with its size and nature of its business.

(8) As per the books and records produced to us and explanations offered thereon, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government under Sec. 209 (1) (d) of the Companies Act, 1956, have been made and maintained.

(9) a) According to the records produced, the company is generally regular in depositing with appropriate authorities the undisputed applicable 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 and Cess.

b) As per the information and explanations given to us, following are the statutory dues which have not been deposited on account of dispute.

Name of the Statute Nature of the Dues Amount Forum where dispute in Lakhs is pending

Income TaxAct Income Tax AY 1996-97 14.02 High Court of Madras

Income Tax Act Income Tax AY 1999-00 4.12 High Court of Madras

Income Tax Act Income Tax AY 2000-01 3.59 High Court of Madra Income Tax Act Income Tax AY 2005-06 2.55 CIT Appeals III, Chennai Income Tax Act Income Tax AY 2005-06 30.61 CIT Appeals HI, Chennai

Service Tax Act Service Tax 5.00 Supreme Court

Service Tax Act Service Tax (07.07.1997-15.08.2002) 145.99 High Court of Madras

Service Tax Rules Service Tax (01.04.2004-09.09.2004) 96.00 Commissioner of Service Tax

Central Excise Act Central Excise 17.00 Commissioner of Central Excise, Pondicherry

central Excise Act Central Excise 2.00 Commissioner Appeal, Chennai

Central Excise Act Central Excise 2197.04 Joint Commissioner of Central Excise, Delhi

Central Excise Act Central Excise 120.43 Joint Commissioner of Central Excise

Central Excise Act Central Excise 15.21 Tribunal Excise Forum, Gurgaon

Central Excise Act Central Excise 2.23 Tribunal,Delhi

Central Excise Act Central Excise 3.56 Joint Commissioner of Central Excise, Delhi

Central Excise Act Central Excise 3.79 Tribunal,Delhi

Central Excise Act Central Excise 0.59 Joint Commissioner of Central Excise, Delhi

Central Excise Act Central Excise 22.21 Additional Commissi -oner of Central Excise, Delhi

ESI Act ESI ( 01.04.2000 - 30.06.2002) 1.27 Regional Director, Gurgaon

Central Excise Act Central Excise (August 2003 - June 2004) 1.83 Assistant Commiss -ioner of Central Excise, Tambaram Division

Central Excise Act Central Excise (January 2001 - August 2003) 34.93 Chief Commissioner Excise (Appeals)

Indian Stamp Act Stamp Duty 31.37 Inspector General of Registration (Appeals) Chennai, Tamil Nadu

(10) The company does not have accumulated losses as at the end of the Financial Year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(11) The company has not defaulted in repayment of dues to any financial institutions or bank or debenture holders.

(12) The company has not granted any 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 Fund, Nidhi or Mutual Fund or Society.

(14) The company is not dealing or trading in shares, securities, debentures and other investments.

(15) In our opinion and according to the information and explanations given to us, the terms and conditions on which the company has given guarantees for loans taken by others from bank and financial institutions are not prima facie prejudicial to the interests of the company.

(16) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

(17) On the basis of an overall examination of the accounts of the company, no funds raised on short term basis have been used for long term investments.

(18) The company has not made any preferential allotment of shares to parties and companies covered in the Register maintained under Section 301 of the Companies Act, 1956.

(19) The company has not issued any debentures during the year.

(20) The company has not raised any money through public issues during the year.

(21) Based upon the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year.

Notes

1. The above Statement has been prepared in the indirect method except in the case of Dividend, Interest received and paid, Purchase and Sale of Investments,Sale of Fixed Assets and Direct taxes which have been considered on the basis of actual movement of cash, with corresponding adjustments in assets and liabilities.

2. Cash and Cash Equivalent represents Cash and Bank Balances only.

3. Proceeds from Borrowings are shown net of repayments and without Exchange fluctuation.

4. Additions to Fixed Assets are stated exclusive of Capital Work-in-Progress between the beginning and end of the year and is treated as part of Investing Activities.

For G. BALU ASSOCIATES,

Chartered Accountants

G.BALASUBRAMANYAN

Partner

Place : Chennai Membership number: 7628

Date : 27.05.2011 FRN: 000376S


Mar 31, 2010

1. We have audited the attached Balance Sheet of M/s. UCAL FUEL SYSTEMS LIMITED, Chennai, as at 31st March 2010, the Profit and Loss Account and Cash Flow Statement of the Company for the year ended on that date annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit 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.

3. a. Attention is invited to note no. 6 and note no. 10 to notes to accounts respectively with regard to the diminution in value of investment in subsidiary company M/s Amtec Precision Products, Inc. and accounting for amalgamation of UCAL Machine Tools Ltd. as per court order.

b. As required by the Companies (Auditors Report) Order, 2003, as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraph 4 and 5 of the said Order.

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

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

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

c. The Balance Sheet and Profit and Loss Account dealt with by the report are in agreement with the books of account.

d. In our opinion the Balance Sheet and Profit and Loss Account 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 from the Directors and taken on record by the Board of Directors of the Company, we report that, none of the director is disqualified as on 31st March 2010 from being appointed as Director of the Company, in terms of Clause (g) of subsection (1) of Section 274 of Com- panies Act, 1956.

f. In our opinion and to the best the of our information and according to the explanations given to us, the said accounts read 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 gener- ally accepted in India;

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

b) in the case of the Profit and Loss Account, of the profit of the company 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.

ANNEXURE TO THE AUDITORS REPORT

STATEMENT REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE

TO THE MEMBERS OF UCAL FUEL SYSTEMS LIMITED 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 fixed assets. The Company is in the process of updating the Fixed Assets Register.

b) The fixed assets have been physically verified by the management at reasonable intervals and no material discrepancies were noticed on such verification.

c) No substantial parts of fixed assets have been disposed off during the year.

(2) a) Physical verification of inventory has been conducted at reasonable intervals by the management.

b) The procedures for physical verification of inventory 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 and no material discrepancies were noticed on physical verification.

(3) The Company has taken unsecured loan from one party covered in the Register maintained under Sec. 301 of the Act to the extent of Rs. 24 Crores (outstanding as on 31.03.2010 is Rs. 9.57 Crores). The rate of interest and other terms and conditions of the loan taken is prima-facie not prejudicial to the interest of the Company. There is no stipulation regarding the repayment of the loan.

(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, for the purchase of inventory and fixed assets and for the sale of goods and services. There is no continuing failure to correct major weaknesses in the internal control system of the Company.

(5) In our opinion and according to the information and explanations given to us

a) the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956, have been entered in the register required to be maintained under that section, and

b) the transactions made in pursuance of such contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(6) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public and hence compliance with directives issued by the reserve Bank of India and the provisions of Sec. 58 A, 58 AA or any other relevant provisions of the Act and the rules framed there under are not applicable.

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

(8) As per the books and records produced to us and explanations offered thereon, we are of the opinion that, prima facie, the cost records and accounts prescribed by the Central Government under Sec. 209 (1) (d) of the Companies Act, 1956, have been made and maintained.

(9) a) According to the records produced, the Company is generally regular in depositing with appropriate authorities the undisputed applicable 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 and Cess.

b) As per the information and explanations given to us, following are the statutory dues which have not been deposited on account of dispute.

Name of the Statute Nature of the dues Amount in Forum where dispute Rs. Lakhs is pending

Income Tax Act Income Tax AY 1996-97 14.02 High Court of Madras

Income Tax Act Income Tax AY 1999-00 4.12 High Court of Madras

Income Tax Act Income Tax AY 2000-01 3.59 High Court of Madras

Income Tax Act Income Tax AY 2005-06 2.55 CIT Appeals III, Chennai

Income Tax Act Income Tax AY 2005-06 0.42 CIT Appeals III, Chennai

Income Tax Act Income Tax AY 2004-05 2.30 CIT Appeals III, Chennai

Service Tax Act Service Tax 5.00 Supreme Court

Service Tax Act Service Tax (07.07.1997- 15.08.2002) 145.99 High Court of Madras

Service Tax Rules Service Tax (01.04.2004 - 09.09.2004) 96.00 Commissioner of Service Tax

Central Excise Act Central Excise 17.00 Commissioner of Central Excise, Pondicherry

Central Excise Act Central Excise 2.00 Commissioner Appeal, Chennai

Central Excise Act Central Excise 2,197.04 Joint Commissioner of Central Excise, Delhi

Central Excise Act Central Excise 120.43 Joint Commissioner of Central Excise

Central Excise Act Central Excise 15.21 Tribunal Excise Forum, Gurgaon

TNGST Act Sales Tax (1998-1999 & Joint Commissioner of Commercial 1999-2000) 10.53 Taxes, Chennai

Haryana VAT Act VAT 2004-05 70.96 Assessing Authority, Gurgaon

ESI Act ESI (01.04.2000 - 30.06.2002) 1.27 Regional Director , Gurgaon

Central Excise Act Central Excise (August 2003 - 1.83 Assistant Commissioner of June 2004) Central Excise, Tambaram Division

Central Excise Act Central Excise (January 2001) 34.93 Chief Commissioner Excise (Appeals)

Indian Stamp Act Stamp Duty 31.37 Inspector General of Registration (Appeals) Chennai, Tamil Nadu

(10) The Company does not have accumulated losses as at the end of the Financial Year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(11) The Company has not defaulted in repayment of dues to any financial institutions or bank or debenture holders.

(12) The Company has not granted any 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 Fund, Nidhi or Mutual Fund or Society.

(14) The Company is not dealing or trading in shares, securities, debentures and other investments.

(15) In our opinion and according to the information and explanations given to us, the terms and conditions on which the Company has given guarantees for loans taken by others from bank and financial institutions are not prima facie prejudicial to the interests of the Company.

(16) In our opinion and according to the information and explanations given to us, the term loans were applied for the purposes for which they were obtained.

(17) On the basis of an overall examination of the accounts of the Company, no funds raised on short term basis have been used for long term investments.

(18) The Company has made preferential allotment of shares to parties and companies covered in the Regis- ter maintained under Section 301 of the Act and price at which shares have been issued is not prejudicial to the interest of the Company.

(19) The Company has not issued any debentures during the year.

(20) The Company has not raised any money through public issues during the year.

(21) Based upon the audit procedures performed and on the basis of the information and explanations given to us, no fraud on or by the Company has been noticed or reported during the year.

For M/s.G.BALU ASSOCIATES

Chartered Accountants

G. BALASUBRAMANYAN

Place: Chennai PARTNER

Date : 31.08.2010 Membership Number: 7628

FRN: 000376S

 
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