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Auditor Report of Zenith Birla (India) Ltd.

Mar 31, 2015

1. We have audited the accompanying financial statements of ZENITH BIRLA (INDIA) LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

2. The Company's Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ('the act') with respect to 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 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; 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

3. 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.

4. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal 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 control system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of 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.

5. 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.

6. Emphasis of Matter:

We draw attention to the following matter in Notes to the financial statements:

Note no. 49 in the financial statements which indicates that the company has accumulated losses and its net worth has been fully eroded. The company has incurred a net loss/net cash loss during the current and previous years and the Company's current liabilities exceeded its current assets as at the Balance Sheet date. These conditions, along with other matters, indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern. However, the financial statements of the company have been prepared on a going concern basis for the reasons stated in the said Note.

Our opinion is not modified in respect of this matter.

7. Basis for Qualified Opinion

1. With reference to Note no. 44 regarding the non provision by the company of the interest amounting to Rs. 32.70 crores on its working capital facilities from banks during the year. Had this amount been provided for, the loss would have been higher by Rs. 32.70 crores and Secured loans would have been higher by an amount of Rs. 32.70 crores.

2. The Company has not complied with the provisions of sections 74 or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules 2014 with regard to non-repayment of deposits and interest on due date, maintenance of liquid assets to the extent required as well as not fully complying with the orders passed by The Company Law Board.

3. With reference to Note no. 42 regarding the company not having the balance confirmations for its party balances and hence our inability to state whether these balances are recoverable / payable to the extent stated.

8. Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to the effects of the matters described in the basis for Qualified Opinion paragraph the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance Sheet, of the state of affairs of the company as at 31st March 2015.

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

9. 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 paragraphs 3 and 4 of the Order.

10. 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 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 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 financial statements comply with the applicable Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014

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

f. With respect to 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) As per the best estimates made by the management on the basis of opinion taken, the Company is of the view that the ongoing litigations as at the reporting date would not have a material impact on its financial position;

ii) Based upon the assessment made by the company, there are no material foreseeable losses on its long term contracts that may require any provisioning.

iii) In view of there being no amount(s) required to be transferred to the Investor Education and Protection Fund for the year under audit the reporting under this clause is not applicable.

ANNEXURE TO INDEPENDENT AUDITOR'S REPORT

Referred to in paragraph 7 under the heading of "report on other legal and regulatory requirement" 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 as at 31st March 2014. These details are however yet to be updated for the year. The Company has started the process of updating these.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the company and nature of its assets. However during the year the Company has not adhered to the programme of physical verification in its Khopoli and Murbad Units.

ii. (a) The Inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of inventory records, in our opinion the Company is maintaining proper records of inventory. As informed to us no material discrepancies were noticed on physical verification.

(a) The Company has granted unsecured loans to three companies covered in the register maintained under section 189 of the Act. The maximum amount involved during the year was Rs. 10664.69 lacs and year-ended balance was Rs. 10556.42 lacs

(b) As explained to us no amounts of principal and interest has become due during the year.

(c) In view of our comments in (b) above, para iii(b) of the Order is 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 for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanation given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

(v) In our opinion, and according to the information and explanations given to us, in respect of compliance by the company with the directives issued by the Reserve Bank of India, the provisions of Section 74 or any other relevant provisions of the Act and the rules framed there under, with regard to the deposits accepted from the public, we have to state that these have not been complied with in respect to non repayment of deposits and interest on due date and maintenance of liquid assets to the extent required as per Rule 13 of the Companies (Acceptance of Deposit) Rules,2014. The Company has also not fully complied with the orders passed by Company Law Board.

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

(vii) (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion except for dues in respect of Dividend Distribution Tax, Tax Deducted at source, Professional Tax, Tax Collected at Source, Service Tax, and Provident Fund, the Company is generally regular in depositing the undisputed statutory dues including Wealth Tax, Excise Duty Custom Duty,Cess and other material statutory dues, as applicable, with the appropriate authorities. The following balances remain in arrears as at the last day of financial year for a period exceeding six months from the date they become payable.

Nature of Dues Amount Outstanding

(in Rs.)

Tax Deducted at Source 1846145

Profession Tax 20550

Tax collected at Source 40763

Service Tax 158043

Provident Fund 579895

Dividend Distribution Tax 35908091

Interest on Dividend Distribution Tax 16158641

(b) According to the information and explanation given to us and the records of the company examined by us, there were no disputed dues in respect of Income Tax, Wealth Tax, Service Tax, and Cess. The particulars of dues of Custom Duty , Excise Duty and Sales Tax as at March 31,2015, which have not been deposited on account of disputes, are as follows:

Name of Statute Amount Period to which (Rs. in Lacs) relates amount Forum where dispute is pending

Customs Act, 1962 82.00 1998-1999 Tribunal 3.45 1985-1986 High Court

Central Excise Act, 1959 129.78 1995-1996 Commissioner appeal

Central Sales Tax Act and 78.88 1995-1996 Tribunal Local Sales Tax

(c) There was a delay of 21 days in transferring the amount required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Act.

(viii) The Company's accumulated loss as at March 31 2015, exceeded its net worth. The Company has incurred cash losses in the current financial year as well as in the immediately preceding financial year.

(ix) According to the records of the Company examined by us and the information and explanations given to us, there has been default in payments to the banks since August, 2012 and the Company's outstanding as at 31st March 2015, as per the notice received from the banks, is Rs. 21583.43 lacs plus interest of Rs. 5821.25 lacs for the period upto March 2015.

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

(xi) The Company has not raised new term loan during the year. The term loans outstanding at the beginning of the year have been applied for the purpose for which they were raised.

(xii) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanation given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For Thakur, Vaidyanath Aiyar & Co. Chartered Accountants Firm Reg. No. 000038N

Place: Mumbai C V Parameswar Date: 30.05.2015 Partner Mem. No. 11541


Mar 31, 2014

We have audited the accompanying financial statements of ZENITH BIRLA (INDIA) LIMITED ("the Company), which comprise the Balance Sheet as at March 31,2014, 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 notified under the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013 and in accordance with the accounting principles generally accepted in India. 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. Basis for Qualified Opinion

1. With reference to Note No. 45 regarding the non provision by the Company of the interest amounting to Rs. 2,551.72 lacs on its working capital facilities from Banks during the year Had this amount been provided for, the loss would have been higher by Rs. 2,551.72 lacs and Secured Loans would have been higher by an amount of Rs. 2,551.72 lacs.

2. The Company has not complied with the provisions of sections 58A, 58AA or other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975 with regard to non-repayment of deposits and interest on due date, maintenance of liquid assets to the extent required as well as not intimating the appropriate authorities of such defaults.

3. With reference to Note No. 42-regarding the Company not having the balance confirmations for its party balances and hence our inability to state whether these balances are recoverable/payable to the extent stated.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, subject to the effects of the matters described in the basis for Qualified opinion paragraph 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 31,2014;

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

Report on Other Legal and Regulatory Requirements

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

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

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

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

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

ANNEXURE TO INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 1 under the heading of "report on other legal and regulatory requirements "of our report of even date.

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

assets as at 31st March, 2013. These details are however yet to be updated for the year. The Company has however started the process of updating these.

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and nature of its assets. However during the year the Company has not adhered to the programme of physical verification

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed off by the Company during the year.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of inventory records, in our opinion, the Company is maintaining proper records of inventory. As informed to us no material discrepancies were noticed on physical verification.

3. (a) The Company has granted unsecured loans to two companies covered in the register maintained under Section 301

of the Act. The maximum amount involved during the year was Rs. 679.53 lacs and year-end balance was Rs. 679.53 lacs.

(b) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions of such loans are not prima facie prejudicial to the interest of the Company.

(c) As explained to us no amount of principal and interest has become due during the year.

(d) In view of our comment in (c) above, para 4(iii)(d) of the Order is not applicable to the Company.

(e) The Company has taken unsecured interest free loan from one company covered in the register maintained under Section 301 of the Act. The maximum amount outstanding anytime during the year was Rs. 45 lacs and the year-end balance was Rs,45 lacs.

(f) In our opinion and according to the information and explanation given to us the terms and conditions of such loan are not primafacie prejudicial to the interest of the Company

(g) In respect of the aforesaid loan, as explained to us no amount of principle has become due during the year.

4. 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 for the purchase of inventory, fixed assets and for the sale of goods and services. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) According to the information and explanations given to us, there were no contracts or arrangements referred to in Section 301 of the Act that required to be entered in the register maintained under the section.

(b) Since there were no contracts or arrangements with any parties referred to in Section 301 of the Act, the provisions of this clause are not applicable.

6. In our opinion and according to the information and explanations given to us, in respect of compliance by the Company with the provisions of Section 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from the public, we have to state that these have not been complied with in respect to non repayment of deposits and interest on due date, maintenance of liquid assets to the extent required as per Rule 3A of the Companies (Acceptance of Deposit) Rules,1975, accepting fresh deposits after the default, as well as not intimating the appropriate authorities of such defaults.

7. The Company has appointed a firm of Chartered Accountants for carrying out the internal audit functions. The internal audit coverage has been done only at Tarapur unit and not at any of the other locations. In our opinion, the scope and coverage of the audit require enhancement to make it commensurate with the size of the Company and nature of its business.

8. 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.

9. (a) According to the information and explanation given to us and the records of the Company examined by us, in our opinion except for dues in respect of Dividend Distribution Tax, Tax Deducted at Source, Profe -ssion Tax, Tax Collected at Source, Service Tax, and Provident Fund, the Company is generally regular in depositing the undisputed statutory dues including Wealth Tax, Excise Duty, Custom Duty, Cess and other material statutory dues, as applicable, with the appropriate authorities. The following balances remain in arrears as at the last day of the financial year for a period exceeding six months from the date they became payable:

Nature of Dues Amount Outstanding (in)

Tax Deducted at Source 3,36,740

Profession Tax 22,775

Tax Collected at Source 10,140

Service Tax 192

Provident Fund 2,27,930

Dividend Distribution Tax 3,59,08,091

Interest on Dividend Distribution Tax 1,18,49,670

(b) According to the information and explanation given to us and the records of the Company examined by us, there were no disputed dues in respect of Income Tax, Wealth Tax, Service Tax and Cess. The particulars of dues of customs duty, excise duty and sales tax as at March 31,2014, which have not been deposited on account of disputes, are as follows:

Name of Statute Amount Period to which Forum where dispute is (in lacs) amount relates pending

Customs Act,1962 82.00 1998-1999 Tribunal

3.45 1985-1986 High Court

Central Excise 129.78 1995-1996 Commissioner Appeals Act,1959

Central Sales 78.88 1995-1996 Tribunal Tax Act and Local Sales Tax

10. The Company''s accumulated loss as at March 31,2014 exceeded fifty percent of its net worth. The Company has incurred cash losses in the current financial year as well as in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanations given to us, there has been default in payments to the banks since August, 2012 and the Company''s outstanding as at 31st March, 2014, as per the notice received from the banks, is Rs. 21,583.43 lacs plus interest of Rs. 523.15 lacs for the period February and March, 2014.

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. In our opinion, the Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore clause 4(xiii) of the Companies (Auditor''s report) Order, 2003 is not applicable to the Company.

14. In respect of shares, securities, debentures and other investments dealt or traded by the Company, proper records have been maintained in respect of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name.

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

16. The Company has raised new term loan during the year. The term loans outstanding at the beginning of the year and those raised during the year have been applied for the purposes for which they were raised.

17. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on short term basis which have been used for long-term investment during the year.

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 Act, during the year.

19. The Company has not issued any debentures during the year, and does not have any debentures outstanding at the year end.

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

21. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

For THAKUR, VAIDYANATH AIYAR & CO. Chartered Accountants Firm Reg. No. 000038N

C V Parameswar Partner Place: Mumbai Mem. No. 11541 Date: 14th August, 2014


Mar 31, 2012

1. We have audited the attached Balance Sheet of Zenith Birla (India) Limited as at 31st March, 2012, and the statement of Profit and Loss and Cash Flow Statement 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 the 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. As required by the Companies (Auditor's Report) Order, 2003, as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of 'The Companies Act, I956' of India (the 'Act') and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order to the extent applicable to the company.

4. Further to our comments in the Annexure referred to in paragraph 3 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 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 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 dealt with by this report comply with the accounting standards referred to in sub-section (3C) of Section 2II of the Act;

(e) On the basis of written representations received from the directors, as on 31st March, 20I2 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 20I2 from being appointed as a director in terms of clause (g) of sub-section (I) of Section 274 of the Act.

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

(i) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2012;

(ii) in the case of the statement of Profit and Loss, of the profit for the year ended on that date; and

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

Referred to in paragraph 3 of the Auditors' Report of even date to the members of Zenith Birla (India) Limited on the financial statements for the year ended 31st March, 2012.

1. (a) The Company is maintaining proper records showing particulars including quantitative details and situation of fixed assets.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory has been noticed,

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed by them at the close of the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) The Company has granted unsecured loans to 2 companies covered in the register maintained under Section 30I of the Act. The maximum amount outstanding at any time during the year was Rs 829.92 lacs and the yearend balance is Rs 829.92 lacs.

(c) As per the information and explanations given to us the rate of interest and the terms and conditions of the said loans are primafacie not prejudicial to the interest of the Company.

(d) As explained to us no amount of principal and interest has become due during the year.

(e) In view of our comment in (d) above Para 4(iii)(d) of the Order is not applicable to the Company.

4. 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 for the purchase of inventory, fixed assets and for the sale of goods. There is no sale of services during the year. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. (a) According to the information and explanations given to us the transactions that need to be entered in the register maintained under section 301 of the Act have been so entered.

(b) In our opinion and according to the information and explanation given to us, these transactions in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act,1956 and exceeding the value of Rs Five lacs in respect of any party during the year 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, in respect of compliance by the Company with the provisions of Sections 58A and 58AA or any other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975, with regard to the deposits accepted from the public, we have to state that there has been a small delay in issue of Fixed Deposit Receipts to the extent of Rs. 78.16 lacs during January and February 2012 consequent to the change in the Registrar of the Company. According to the information and explanations given to us, no Order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal on the Company in respect of the aforesaid deposits.

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (I) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees' state insurance, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. However, Dividend Distribution Tax amounting to Rs. 359.08 lacs plus interest amounting to Rs. 6463456.38 remained in arrears as at the last day of the financial year, for a period exceeding six months from the date it became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there were no disputed dues in respect of income tax, wealth tax, service tax and cess. The particulars of dues of custom duty, excise duty and sales-tax, as at 31st March, 2012 which have not been deposited on account of disputes are as follows:

Name of the Statute Amount Period to which the Forum where the dispute (Rs. in lacs) amount relates is pending

Customs Act, 1962 82.00 1998-1999 Tribunal

3.45 1985-1986 High Court

Central Excise Act, 1944 129.78 1995-1996 Commissioner Appeals

Central Sales Tax Act and Local Sales Tax 78.88 1995-1996 Tribunal

10. The Company has no accumulated losses as at 31st March, 2012 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any bank. There were no dues to any financial institution or debenture holder as at the Balance Sheet date.

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. In respect of shares, securities, debentures and other investments dealt or traded by the Company, proper records have been maintained in respect of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name.

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

15. The Company has not obtained any term loan during the year.

16. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long- term investment.

17. The Company has not made a preferential allotment of shares to parties and companies covered in the register maintained under Section 30I of the Act during the year.

18. The Company has not issued any debentures during the year, and does not have any debentures outstanding as at the year end.

19. The Company has not raised any monies by way of public issues during the year.

20. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

21. The other clauses, (iii)(f), (iii)(g), and (xiii) of paragraph 4 of the Order, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which arises to be reported in the aforesaid Order.

For Thakur, Vaidyanath Aiyar & Co.

Chartered Accountants

Firm Registration Number: 000038N

C. V. Parameswar

Place: Mumbai Partner

Date : 25-05-2012 M.No.: 11541


Mar 31, 2010

1. We have audited the attached Balance Sheet of Zenith Birla (India) Limited as at 31st March, 2010, and the related Profit and Loss Account and Cash Flow Statement for the year ended on that date annexed thereto, which we have signed under reference to this report. 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 the 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. As required by the Companies (Auditors Report) Order, 2003, as amended by the Companies (Auditors Report) (Amendment) Order, 2004 (together the "Order"), issued by the Central Government of India in terms of sub-section (4A) of Section 227 of The Companies Act, 1956 of India (the Act) and on the.basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

4. Further to our comments in the Annexure referred to in paragraph 3 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 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 appears from our examination of those books;

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

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

(e) On the basis of written representations received from the directors, as on 31st March, 2010 and taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause (g) of sub-section (I) of Section 274 of the Act.

(f) In our opinion and to the best of our information and according to the explanations given to us, the said financial statements together with the notes thereon and attached thereto give, in the prescribed manner, the information required by the Act and give a true and fair view in conformity with the accounting principles generally accepted in India:

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

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date; and

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

ANNEXURE TO AUDITORS REPORT Referred to in paragraph 3 of the Auditors Report of even date to the members of Zenith Birla (India) Limited on the financial statements for the year ended 31st March, 2010.

1. (a) The Company is maintaining proper records showing particulars including quantitative details and situation of fixed

assets. However, in respect of the Companys Tungabhddra Divisions at Tarapore and Murbad, the fixed asset records are in the process of being updated.

(b) The fixed assets are physically verified by the management according to a phased programme designed to cover all the items over a period of three years, which in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the management during the year and no material discrepancies between the book records and the physical inventory has been noticed, except in the case of the Companys Tungabhadra Divisions at Tarapore and Murbad, where the comparisons will be made once the records are completed.

(c) In our opinion and according to the information and explanations given to us, a substantial part of fixed assets has not been disposed of by the Company during the year so as affect its going concern.

2. (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed by them at the close of the year.

(b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) On the basis of our examination of the inventory records, in our opinion, the Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material.

3. (a) The Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under Section 301 of the Act.

(b) 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 Act.

4. 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 for the purchase of inventory, fixed assets and for the sale of goods. There is no sale of services during the year. Further, on the basis of our examination of the books and records of the Company, and according to the information and explanations given to us, we have neither come across nor have been informed of any continuing failure to correct major weaknesses in the aforesaid internal control system.

5. According to the information and explanations given to us, there have been no contracts or arrangements referred to in Section 301 of the Act during the year, to be entered in the register required to be maintained under that Section. Accordingly, the question of commenting on transactions made in pursuance of such contracts or arrangements does not arise.

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

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

8. We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government of India, the maintenance of cost records has been prescribed under clause (d) of sub-section (I) of Section 209 of the Act and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

9. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing the undisputed statutory dues including provident fund, investor education and protection fund, employees state insurance, sales-tax, wealth tax, service tax, customs duty, excise duty, cess and other material statutory dues as applicable with the appropriate authorities. However, Advance Tax amounting to Rs 533.70 lacs remained in arrears as at the last day of the financial year, of which, Rs 350.22 lacs remained outstanding for a period exceeding six months from the date they became payable.

(b) According to the information and explanations given to us and the records of the Company examined by us, there were no disputed dues in respect of income tax, wealth tax, service tax and cess. The particulars of dues of custom duty, excise duty and sales-tax, as at 31 st March, 2010 which have not been deposited on account of disputes are as follows:

Nature of dues Amount Period to which the Forum where the

(Rs. in lacs) amount relates dispute is pending

Custom Duty 82.00 1998-1999 Tribunal

3.45 1985-1986 High Court

Excise Duty 129.78 1995-1996 Commissioner Appeals

Sales Tax 78.88 1995-1996 Tribunal

10. The Company has no accumulated losses as at 31st March 2010 and it has not incurred any cash losses in the financial year ended on that date or in the immediately preceding financial year.

11. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of dues to any bank. There were no dues to any financial institution or debenture holder during the year.

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. In respect of shares, securities, debentures and other investments dealt or traded by the Company, proper records have been maintained in respect of the transactions and contracts and timely entries have been made therein. All the investments are held by the Company in its own name.

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

15. The Company has not obtained any term loan during the year.

16. On the basis of an overall examination of the balance sheet of the Company, in our opinion and according to the information and explanations given to us, there are no funds raised on a short-term basis which have been used for long- term investment.

17. The Company has not made any preferential allotment of shares to parties and companies covered in the register maintained under Section 301 of the Act during the year.

18. The Company has not issued any debentures during the year.

19. The Company has not raised any money by public issues during the year.

20. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported during the year, nor have we been informed of such case by the Management.

21. The other clauses, (iii)(b), (iii)(c), (iii)(d), (iii)(f), (iii)(g). and (xiii) of paragraph 4 of the Order, are not applicable in the case of the Company for the current year, since in our opinion there is no matter which arises to be reported in the aforesaid Order.

For Dalai & Shah

Firm Registration Number: 102021W

Chartered Accountants

S. Venkatesh

Partner

Membership Number: 037942

 
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