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Auditor Report of W S Industries (India) Ltd.

Mar 31, 2015

We have audited the accompanying financial statements of W.S. Industries (India) Limited ('the Company'), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss and the Cash Flow Statement for the period then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the 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 and presentation 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 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 financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

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

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

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

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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 31,2015;

b) in the case of Statement of Profit and Loss, of the LOSS for the period ended on that date and

c) in the case of Cash flow Statement, of the cash flows for the period ended on that date;

Emphasis of Matter

Without qualifying our opinion, we draw your attention that the accumulated losses of the company is more than 100% of the net worth of the company, requiring reference to BIFR.

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 ourexamination 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 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 31 March 2015 taken on record by the Board of Directors, none of the directors is disqualified as on 31 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 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:

(g) There has been a delay in transferring the amount of unclaimed dividend, required to be transferred, to the Investor Education and Protection Fund by the company.

ANNEXURE TO INDEPENDENT AUDITORS' REPORT

The Annexure referred to in our Independent Auditors' Report to the members of the Company on the financial statements for the period ended 31 March 2015, we report that:

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

(b) The company has a regular program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner at reasonable intervals by the management. According to the information and explanations given to us, no material discrepancies where observed by the management on such verification.

(ii) (a) The stock of inventory has been physically verified by the management at reasonable intervals during the period. In our opinion the frequency of verification is reasonable.

(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 and nature of its business.

(c) The company is maintaining proper records of inventory. No material discrepancy was noticed on such physical verification.

(iii) (a) According to the information and explanations given to us and on the basis of our examination of the books of accounts, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act 2013. Consequently the provisions of clause (iii) (a) (b) and (c) are not applicable to the company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business with regard to purchase of fixed assets and sale of services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) The Company has not accepted any deposits from the public and hence this clause is not applicable to the company.

(vi) Central Government has prescribed maintenance of cost records under sub- section (1) of section 148 of the Companies Act and such accounts and records have been prepared and maintained by the company.

(vii) (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund, income tax, sales tax, service tax, duty of customs, value added tax, cess and other material statutory dues have not been regularly deposited during the period by the Company with the appropriate authorities. As explained to us, the Company have dues on account of employees' state insurance, Provident fund, income tax, sales tax, service tax, value added tax, cess and other material dues

According to the information and explanations given to us, there are undisputed amounts payable in respect of provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, value added tax, cess and other material statutory dues were in arrears as at 31 March 2015 fora period of more than six months from the date they became payable:

s.no NATURE OF DUES AMOUNT OUTSTANDING FOR MORE THAN SIX MONTHS (IN Rs.)

1 PROVIDENT FUND 24,31,836

2 SALES TAX-VAT 6,25,471

3 SALES TAX-CST 2,45,729

4 TDS 1,13,23,910

5 PROPERTYTAX 4,28,632

6 PROFESSIONAL TAX 9,37,633

7 GRATUITY TOLIC 1,78,45,737

TOTAL AMOUNT OUTSTANDING 3,38,43,948

(b) According to the information and explanations given to us, there are material dues of Income tax which have not been deposited with the appropriate authorities on account of any dispute.

Name of the Statue Nature of dues Amount Forum where (< in millions) dispute is pending

Income Tax Act Income Tax 0.40 High Court

(c) 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, there has been a delay in transfer to such fund.

(viii) The Company has accumulated losses as at the end of the period, which are more than 100% of the net worth of the company, and has incurred cash loss during the period and also during the immediately preceding financial year.

(ix) According to the information and explanations given to us, the Company has defaulted in repayment of dues to its banks/financial institutions, to the extent of the following:

a. An amount of Rs. 867.12 Million towards principal has fallen due on 31st March 2015 (including Rs.407.12 Million fallen due on 31 st March 2014)

b. An amount of Rs. 260.99 Million towards interest has fallen due on 31st March 2015 (including Rs. 118.03 Million fallen due on 31 st March 2014).

c. An amount of Rs.83.31 Million towards interest on NCD has fallen due on 31st March 2015 (including Rs. 30.67 Million fallen due on 31 st March 2014).

(x) In our opinion and according to the information and the explanations given to us, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xi) According to the information and explanations given to us, the term loan taken by the company were applied for the purpose for which they have been obtained.

(xii) According to the information and explanations given to us, no material fraud on or by the Company has been noticed or reported during the course of our audit.

17,Bishop wailers avenue
Chella K. Srinivasan Place: Chennai Partner Date: 30th May, 2015 Membership Number: 023305


Sep 30, 2014

1) Report on Financial Statements

We have audited the accompanying financial statements of W.S. Industries Limited ("the Company") which comprise the Balance Sheet as at 30th September 2014 and 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.

2) 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.

3) Auditors'' Responsibility

a) 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.

b) 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 company''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.

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

4) 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 30th September 2014

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

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

Emphasis of Matter

Without qualifying our opinion, we draw your attention, that the accumulated losses of the company is more than of the net worth of the company, requiring reference to the BIFR.

5) 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.

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

(e) On the basis of written representations received from the Directors as on 30th September 2014 and taken on record by the Board of Directors, none of the Director is disqualified as on 30th September 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 TO INDEPENDENT AUDITORS'' REPORT

(Referred to in paragraph 5 (1) under ''Report on other Legal Reqirements'' section of our report of even date)

(i) In respect of the Company''s fixed assets

(a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) The company has a program of physical verification of its fixed assets by which all fixed assets are verified in a phased manner over a period of three years. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the company and the nature of its assets. According to information and explanations given to us, no material discrepancies where observed by the management on such verification.

(c) According to the information and explanations given to us, during the year, the company has not disposed off any substantial part of fixed assets during the year which affects the going concern concept.

(ii) (a) In our opinion and according to the information and explanations given to us, the physical verification of inventory has been conducted by the management at reasonable intervals.

(b) The procedures of physical verification 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 is maintaining proper records of inventory and we are informed that no material discrepancies were noticed on physical verification.

(iii) According to the information and explanations given to us and on the basis of our examination of the books of account, the Company has not granted/ taken any loans, secured or unsecured, to companies, firms or other parties listed in the register maintained under Section 301 of the Companies Act, 1956 during the year. Consequently, the provisions of clauses 4(iii) (a) to (g) of the order are not applicable to the Company.

(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 and the nature of its business with regard to purchase of fixed assets and with regard to the sale of goods. In our opinion and according to the information and explanations given to us, there is no continuing failure to correct major weaknesses in internal control system.

(v) (a) According to the information and explanations provided by the management, the particulars of contracts or arrangements referred to in section 301 of the Act have been entered in the register required to be maintained under section 301 of the Companies Act 1956.

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

(vi) The company has not accepted Fixed Deposit from the Public hence directives issued by the Reserve Bank of India and the provisions of Section 58A and 58 AA or any other relevant provisions of the Act, and rules framed there under are not applicable for the year under audit.

(vii) A firm of Chartered Accountants is appointed as Internal Auditors of the company for the period under review. In our opinion the company has an internal audit system that is commensurate with its size and nature of its business.

(viii) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, 2011 prescribed by the Central Government under Section 209 (1) (d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) According to the information and explanations given to us;

(a) Undisputed statutory dues including Provident fund, Investor''s education and protection fund, employee State Insurance, income-tax, sales tax, wealth tax, service tax, Customs Duty, Excise Duty, Cess have not generally been regularly deposited with appropriate authorities. There are no undisputed amounts payable in respect of such statutory dues which have remained outstanding as at 30th September 2014 for a period of more than six months from the date they became payable.

(b) At the end of the financial year there were no dues of sales tax, Income Tax, Wealth Tax, Service Tax, Customs duty, Cess which have not been deposited on account of any dispute except as follows:

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

Income Tax Income Tax 0.40 High Court

(x) The Company has accumulated losses as at the end of the financial year and has incurred cash loss during the financial year and has not incurred cash loss during immediately preceding financial year. The accumulated losses is more than 100% of the networth of the company.

(xi) 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 banks/ financial institutions, except the following

(a) An amount of Rs. 30.70 million towards principal has fallen due on 30th September 2014.

(b) An amount of Rs. 157.70 million towards interest has fallen due on 30th September 2014.

(xii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit/nidhi /mutual benefit fund society. Therefore, the provisions of clause 4(xiii) of the Order is not applicable to the Company.

(xiv) The Company is not dealing or trading in shares, securities, debentures hence clause (xiv) is not applicable.

(xv) According to the information and explanations given to us, the company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) According to the information and explanations given to us, the term loans taken by the company were applied for the purpose for which they were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the company, we report that no funds raised on short-term basis, have been used during the year for long term investments by the company.

(xviii) 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.

(xix) The company has not issued debentures in during the year.

(xx) During the year the management has not raised money through public issue and hence we offer no comments on the same.

(xxi) According to the information and explanations given to us, by the Company, no fraud on or by the company has been noticed or reported, during the course of our audit.

17 Bishop Wallers Avenue (West) For M/S. S.VISWANATHAN CIT Colony, Mylapore, Chartered Accountants Chennai-600 004 Firm Regn. No.004770S

Chella K. Srinivasan Place: Chennai Partner Date: 29th November, 2014 Membership Number: 023305


Mar 31, 2012

We have audited the attached Balance Sheet of M/s. W.S. Industries (India) Limited as at 31st March 2012 and also the Statement of Profit and Loss of the Company for the year ended on that date annexed thereto and 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.

We have 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 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.

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

Further to our comments in Annexure referred to above, we report that;

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

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

c) The balance sheet and profit and loss account dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Profit and Loss Account read with Schedules and Notes thereon dealt with by this Report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act 1956, so far as applicable.

e) On the basis of the written representation received from the directors as on 31st March 2012 we report that none of the directors is disqualified as on 31st March 2012 from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act 1956

f) Subject to the above, in our opinion and to the best of our information and explanation given to us, they said accounts read with 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 the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2012 and

ii. In the case of Statement of Profit and Loss of the LOSS for the year ended on that date.

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

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in Paragraph (3) of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars including quantitative details

and situation of fixed assets.

(b) The fixed assets of the company have been physically verified during the year by the management and no material discrepancies between the book records and the physical inventory have been noticed.

(c ) During the year, the Company has not disposed off any substantial part of its fixed assets, affecting the going concern.

(ii) (a) Physical verification of stocks of Finished Goods, Stores, Spare Parts and Raw materials was conducted by the management during the period, except materials lying with third parties from whom confirmation certificates have been obtained. Materials in Bond have been verified with the respective Bills of Entry. In our opinion, the frequency of verification was reasonable.

(b) The procedures of physical verification of stocks followed by the management are reasonable and adequate, commensurate to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining 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 Accounts.

(iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company has taken a loan from a party covered in the register maintained under Section 301 of the Companies Act 1956. The maximum amount involved during the year and the year end balance was Rs 16.30 Crores.

(iv) In our opinion the terms and conditions are not prejudicial to the interest of the Company, (iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems, commensurate with the size of the company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to sale of goods.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act 1956, have been made at prices, which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) As explained to us, the company has complied with the Provisions of Section 58A of the Companies Act, 1956.

(vii) A firm of Chartered Accountants is appointed as Internal Auditors of the company for the period under review. !n our opinion, the company has internal audit system commensurate with its size and nature of its business.

(viii) (a) The Company is regular in depositing its 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 any other statutory dues with the appropriate authorities.

(b) At the end of the financial year there were no dues of sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess which have not been deposited on account of any dispute except as follows:

Amount Forum where Name of the statute Nature of dues ( Rs in Lakhs ) dispute is pending

Income Tax Income Tax 4.00 High Court

Income Tax Income Tax 33.18 CIT, Appeals

(ix) The Company has not defaulted in repayment of dues to Financial Institutions or Banks, except the following:-

(a) an amount ofRs 245.30 Lakhs has fallen due on 31st March 2012 and since been paid.

(b) an amount of Rs 77.80 Lakhs has fallen due on 20th March 2012.

(x) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xi) According to the information and explanations give to us, the company has not given any guarantee for loans taken by others from Banks and Financial Institutions.

(xii) The term loans availed during the year have been utilized for the purpose for which they have been raised.

(xiii) The Company has incurred cash losses in the financial year under report, however, no cash loss has been incurred in the immediately preceding financial year.

(xiv) The funds raised by the Company on short term basis have not been used for long term investments.

(xv) 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.

(xvi) No fraud on or by the Company has been noticed or reported during the course of our audit.

(xvii) Other provisions of Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 are not applicable.

For M/S. S. VISWANATHAN

Chartered Accountants

Firm Regn. No. 004770S

CHELLA K SRINIVASAN

Chennai PARTNER

31st May 2012 Membership No.: 023305


Mar 31, 2011

We have audited the attached Balance Sheet of M/s. W.S. Industries (India) Limited as at 31st March 2011 and also the Profit and Loss Account of the Company for the year ended on that date annexed thereto and 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.

We have 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 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.

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

Further to our comments in Annexure referred to above, we report that;

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

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

c) The balance sheet and profit and loss account dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Profit and Loss Account read with Schedules and Notes thereon dealt with by this Report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act 1956, so far as applicable.

e) On the basis of the written representation received from the directors as on 31st March 2011 we report that none of the directors is disqualified as on 31st March 2011 from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act 1956

f) Subject to the above, in our opinion and to the best of our information and explanation given to us, the said accounts read with 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 the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2011 and

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

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

ANNEXURE TO THE AUDITORS' REPORT (Referred to in Paragraph (3) of our report of even date)

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

(b) The fixed assets of the company have been physically verified during the year by the management and no material discrepancies between the book records and the physical inventory have been noticed.

(c) During the year, the Company has not disposed off any substantial part of its fixed assets, affecting the going concern.

(ii) (a) Physical verification of stocks of Finished Goods, Stores, Spare Parts and Raw materials was conducted by the management during the period, except materials lying with third parties from whom confirmation certificates have been obtained. Materials in Bond have been verified with the respective Bills of Entry. In our opinion, the frequency of verification was reasonable.

(b) The procedures of physical verification of stocks followed by the management are reasonable and adequate, commensurate to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining 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 Accounts.

(iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The following are the particulars of loans taken by the Company from Companies, firms and other parties covered by the Register maintained under Section 301 of the Companies Act, 1956.

No. of parties : Two; Amount: Rs. 83,000,000 and Year end Balance - Rs. 75,000,000.

c) In our opinion the terms and conditions are not prejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate

internal control systems, commensurate with the size of the company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to sale of goods.

(v) (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 particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act 1956, have been made at prices, at which transactions for similar goods have been entered with other parties.

(vi) As explained to us, the company has complied with the Provisions of Section 58A of the Companies Act, 1956.

(vii) A firm of Chartered Accountants is appointed as Internal Auditors of the company for the period under review. In our opinion, the company has internal audit system commensurate with its size and nature of its business.

(viii) (a) The Company is regular in depositing its 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 any other statutory dues with the appropriate authorities.

(b) At the end of the financial year there were no dues of sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess which have not been deposited on account of any dispute except as follows:

Name of the statute Nature of dues Amount Form where dispute is pending

Income Tax Income Tax Rs. 399,979 High Court

(ix) The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

(x) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xi) In our opinion, the terms and conditions in respect of the guarantees given by the company for loans taken by others from banks and financial institution are not prima facie prejudicial to the interest of the company.

(xii) The term loans availed during the year has been utilized for the purpose for which they have been raised.

(xiii) The company has not incurred cash losses in the financial year ended on that date.

(xiv) The funds raised by the Company on short term basis have not been used for long term investments.

(xv) 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.

(xvi) No fraud on or by the Company has been noticed or reported during the course of our audit.

(xvii) Other provisions of Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors' Report) (Amendment) Order 2004 are not applicable.

For M/S. S. VISWANATHAN Chartered Accountants Firm Regn. No. 004770S

CHELLA K. SRINIVASAN Chennai PARTNER 27th July, 2011 Membership No.: 023305


Mar 31, 2010

We have audited the attached Balance Sheet of M/s.W S. Industries (India) Limited as at 31st March 2010 and also the Profit and Loss Account of the Company forthe year ended on that date annexed thereto and Cash Flow Statement forthe 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.

We have 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 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.

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

Further to our comments in Annexure referred to above, we report that;

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

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

c) The balance sheet and profit and loss account dealt with by this report are in agreement with the books of accounts.

d) In our opinion, the Balance Sheet and Profit and Loss Account read with Schedules and Notes thereon dealt with by this Report comply with the Accounting Standards referred to in Sub-Section (3C) of Section 211 of the Companies Act 1956, so far as applicable.

e) On the basis of the written representation received from the directors as on 31st March 2010 we report that none of the directors is disqualified as on 31st March 2010 from being appointed as a director in terms of clause (g) of subsection (1) of Section 274 of the Companies Act 1956.

f) Subject to the above, in our opinion and to the best of our information and explanation given to us, the said accounts read with 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 the case of Balance Sheet, of the state of affairs of the Company as at 31st March 2010 and

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

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

ANNEXURE TO THE AUDITORS REPORT (Referred to in Paragraph (3) of our report of even date)

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

(b) The fixed assets of the company have been physically verified during the year by the management and no material discrepancies between the book records and the physical inventory have been noticed.

(c) During the year, the Company has not disposed off any substantial part of its fixed assets, affecting the going concern.

(ii) (a) Physical verification of stocks of Finished Goods, Stores, Spare Parts and Raw materials was conducted by the management during the period, except materials lying with third parties from whom confirmation certificates have been obtained. Materials in Bond have been verified with the respective Bills of Entry. In our opinion, the frequency of verification was reasonable.

(b) The procedures of physical verification of stocks followed by the management are reasonable and adequate, commensurate to the size of the company and the nature of its business.

(c) On the basis of our examination of the records of inventory, we are of the opinion that the Company is maintaining 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 Accounts.

(iii) (a) The Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956.

(b) The Company has taken unsecured loan for Rs. 17,000,000 from two parties covered in the Register maintained under Section 301 of the Companies Act 1956. However, the terms of repayment and interest are not prejudicial to the interest of the Company.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems, commensurate with the size of the company and the nature of its business with regard to purchase of stores, raw materials including components, plant and machinery, equipment and other assets and with regard to sale of goods.

(v) (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 particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been so entered.

(b) In our opinion, the transactions made in pursuance of such contracts or arrangements entered in the Register maintained under Section 301 of the Companies Act 1956, have been made at prices, at which transactions for similar goods have been entered with other parties.

(vi) As explained to us, the company has complied with the Provisions of Section 58A of the Companies Act, 1956.

(vii) A firm of Chartered Accountants is appointed as Internal Auditors of the company for the period under review. In our opinion, the company has internal audit system commensurate with its size and nature of its business.

(viii) (a) The Company is regular in depositing its 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 any other statutory dues with the appropriate authorities.

(b) At the end of the financial year there were no dues of sales Tax, Income Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess which have not been deposited on account of any dispute except as follows:

Amount Forum where dispute is Name of the statute Nature of dues Rs. pending

SalesTax SalesTax 139,163 High Court

Sales Tax SalesTax 755,608 STAT

SalesTax SalesTax 1,582,605 AAC Appeals

Income Tax Income tax 399,979 High Court



(ix) The Company has not defaulted in repayment of dues to Financial Institutions or Banks.

(x) The Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xi) In our opinion, the terms and conditions in respect of the guarantees given by the company for loans taken by others from banks and financial institution are not prima facie prejudicial to the interest of the company.

(xii) The term loans availed during the year has been utilized for the purpose for which they have been raised.

(xiii) The company has no accumulated losses as at 31st March 2010 but has incurred cash losses in the financial year ended on that date.

(xiv) The funds raised by the Company on short term basis have not been used for long term investments.

(xv) 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.

(xvi) No fraud on or by the Company has been noticed or reported during the course of our audit.

(xvii) Other provisions of Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order 2004 are not applicable.

For M/S. S.VISWANATHAN Chartered Accountants Firm Regn. No.004770S

Chennai CHELLA K. SRINIVASAN 30th July, 2010 Partner Membership No. 023305





 
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