Auditor Report of Honda India Power Products Ltd.

Mar 31, 2018

INDEPENDENT Auditors’ REPORT

TO THE MEMBERS OF HONDA SIEL POWER PRODUCTS LIMITED

Report on the Indian Accounting Standards (Ind AS) Financial Statements

1. We have audited the accompanying Ind AS financial statements of Honda Siel Power Products Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Ind AS Financial Statements

2. The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements to give a true and fair view of the financial position, financial performance (including other comprehensive income), cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules, 2015 (as amended) under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on these Ind AS financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made there under including the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.

5. We conducted our audit of the Ind AS financial statements in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the Ind AS financial statements. The procedures selected depend on the auditors'' judgment, including the assessment of the risks of material misstatement of the Ind AS 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 Ind AS financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the Ind AS financial statements.

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

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, and its total comprehensive income (comprising of profit and other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Other Matter

9. The comparative financial information of the Company for the year ended March 31, 2017 and the transition date opening balance sheet as at April 1, 2016 included in these Ind AS financial statements, are based on the previously issued statutory financial statements for the years ended March 31, 2017 and March 31, 2016 prepared in accordance with the Companies (Accounting Standards) Rules, 2006 (as amended) which were audited by the predecessor auditor who expressed an unmodified opinion vide reports dated May 15, 2017 and May 20, 2016 respectively. The adjustments to those financial statements for the differences in accounting principles adopted by the Company on transition to the Ind AS have been audited by us.

Our Opinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

10. As required by the Companies (Auditor''s Report) Order, 2016, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (“the Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

11. As required by Section 143 (3) of the Act, we report that:

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

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

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

(d) In our opinion, the aforesaid Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the

Act.

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure A.

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

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 2018 on its financial position in its Ind AS financial statements - Refer Note 30 to the Ind AS financial statements;

ii. The Company does not have derivative contracts and in respect of other long-term contracts there are no material foreseeable losses as at March 31, 2018;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018.

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018.

Annexure A to Independent Auditors’ Report

Referred to in paragraph 11 (f) of the Independent Auditors'' Report of even date to the members of Honda Siel Power Products Limited on the Ind

AS Financial Statements for the year ended March 31, 2018

Report on the Internal Financial Controls with reference to Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls with reference to financial statements of Honda Siel Power Products Limited (“the Company”) as of March 31, 2018 in conjunction with our audit of the Ind AS Financial Statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company''s internal financial controls with reference to financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing deemed to be prescribed under section 143(10) of the Act to the extent applicable to an audit of internal financial controls, both applicable to an audit of internal financial controls and both issued by the ICAI. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to financial statements was established and maintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system with reference to financial statements and their operating effectiveness. Our audit of internal financial controls with reference to financial statements included obtaining an understanding of internal financial controls with reference to financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

6. A company''s internal financial control with reference to financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control with reference to financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the Ind AS financial statements.

Inherent Limitations of Internal Financial Controls with reference to Financial Statements

7. Because of the inherent limitations of internal financial controls with reference to financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

8. In our opinion, the Company has, in all material respects, an adequate internal financial controls system with reference to financial statements and such internal financial controls with reference to financial statements were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

Annexure B to Independent Auditors’ Report

Referred to in paragraph 11 (f) of the Independent Auditors'' Report of even date to the members of Honda Siel Power Products Limited on the Ind AS Financial Statements for the year ended March 31, 2018.

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of property, plant and equipment and intangible 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 have been noticed on such verification.

(c) The title deeds of immovable properties, as disclosed in Note 3 on fixed assets to the Ind AS financial statements, are held in the name of the Company.

ii. The physical verification of inventory including stocks with third parties have been conducted at reasonable intervals by the Management during the year. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been appropriately dealt with in the books of accounts.

iii. The Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under Section 189 of the Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified.

vi. Pursuant to the rules made by the Central Government of India, the Company is required to maintain cost records as specified under Section 148(1) of the Act in respect of its products. We have broadly reviewed the same, 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.

vii. (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 undisputed statutory dues in respect of tax deducted at source, though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including income tax, provident fund, employees'' state insurance, sales tax, service tax, duty of customs, duty of excise, value added tax, cess, goods and services tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of goods

Name of the statute	Nature of dues	Amount (Rs. In lakhs)	Amount deposited under protest (Rs. In Lakhs)	Period to which the amount relates	Forum where the dispute is pending
Customs Act, 1962	Customs duty	49.67	49.67	2011-2014	CESTAT
Customs Act, 1962	Customs duty	7.11	7.11	2012-2014	Commissioner Of Customs (Appeals)
Customs Act, 1962	Customs duty	22.76	22.76	2014-2015	CESTAT
Customs Act, 1962	Customs duty	1.36	1.36	2015-2016	Commissioner Of Customs (Appeals)
Customs Act, 1962	Customs duty	89.33	89.33	2014-2015	Commissioner Of Customs (Appeals)
Central Excise Act, 1944	Excise duty	2.47	0.35	December 2003 to March 2004	Customs Excise Service Tax Appellate Tribunal
Central Excise Act, 1944	Excise duty	181.36	-	May 2003 to Feb 2004	Supreme Court
Central Excise Act, 1944	Excise duty	102.75	-	2014-15	High Court
Central Excise Act, 1944	Excise duty	115.57*	-	2015-16	Commissioner
Central Excise Act, 1944	Excise duty	90.39*	-	2016-17	Commissioner
Various Sales Tax Acts	Sales tax	0.72	0.72	1995-1996	Assistant Commissioner
Various Sales Tax Acts	Sales tax	0.27	0.27	2005-2006	Joint Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	3.55	0.89	1999-2000	High Court
Various Sales Tax Acts	Sales tax	21.12	-	2000-2001	WBCT Appellate & revision board
Various Sales Tax Acts	Sales tax	5.23	1.57	2000-2001	Sales Tax Tribunal
Various Sales Tax Acts	Sales tax	1.74	0.43	2001-2002	Sales Tax Tribunal

Various Sales Tax Acts	Sales tax	0.52	-	2001-2002	Additional Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	0.15	-	2002-2003	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	1.19	-	2003-2004	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	5.96	-	2004-2005	Joint Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	4.67	1.48	2007-2008	Deputy Commissioner (Appeals).
Various Sales Tax Acts	Sales tax	1.78	0.18	2007-2008	The Appellate Authority
Various Sales Tax Acts	Sales tax	1.93	0.71	2008-2009	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	22.83	-	2009-2010	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	0.74	-	2012-2013	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	32.77	16.38	2015-2016	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	14.03	7.02	2015-2016	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	63.49	9.53	2011-12	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	22.43	3.37	2012-13	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	5.66	-	2013-14	Deputy Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	15.05	-	2015-16 & 2016-17	Deputy Commissioner
Various Sales Tax Acts	Sales tax	38.35	-	2014-15	Commissioner (Appeals)
Various Sales Tax Acts	Sales tax	573.45	-	2014-15	Commissioner (Appeals)
Income-tax Act , 1961	Income tax	56.89	20.00	1995-1996	Commissioner of Income tax (Appeals)
Income-tax Act , 1961	Income tax	30.90	-	2004-2005	Commissioner of Income Tax (Appeals)
Income-tax Act , 1961	Income tax	1,612.00	570.00	2011-2012	ITAT
Income-tax Act , 1961	Income tax	1,340.00	1021.00	2012-2013	Commissioner of Income tax (Appeals)
Income-tax Act , 1961	Income tax	2,004.00	400.00	2014-15	Commissioner of Income tax (Appeals)

* Presently no demand outstanding since the refund amount was not received.

viii. As the Company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any debentures as at the balance sheet date, the provisions of clause 3(viii) of the Order are not applicable to the Company.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. 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 material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid/ provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the Ind AS financial statements as required under Indian Accounting Standard (Ind AS) 24, Related Party Disclosures specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016

Chartered Accountants

Abhishek Rara

Place: New Delhi Partner

Date: 24 May, 2018 Membership Number: 077779

---

Mar 31, 2017

To the Members of Honda Siel Power Products Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Honda Siel Power Products Limited (“the Company”), which comprise the Balance Sheet as at 31 March, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these 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 of 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 there under.

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

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the 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, of the state of affairs of the Company as at 31 March 2017, and its profit and its 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, 2016 (‘Order''), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in “Annexure A”, a statement on the matters specified in paragraphs 3 and 4 of the said Order.

2. As required by Section 143 (3) of the Act, we report that:

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

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

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

d) in our opinion, the aforesaid 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 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2017 from being appointed as a director in terms of Section 164 (2) of the Act;

f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”; and

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 30 to the financial statements;

ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in the financial statements as to holding as well as dealings in Specified Bank Notes during the period from 8 November to 30 December 2016. Based on audit procedures performed by us and relying on the management representation we report that the disclosures are in accordance with the books of account maintained by the Company and as produced to us by the Management. Refer Note 49 to the financial statements.

Annexure A to the Independent Auditor’s Report of even date on the financial statements of Honda Siel Power Products Limited

The Annexure A referred to in our Independent Auditor’s Report to the members of the Company on the financial statements for the year ended 31 March 2017, we report that:

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

(b) As explained to us, the Company has a regular programme of physical verification of its fixed assets in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were physically verified by the Company during the current year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its fixed assets. The discrepancies noticed on such verification were not material and have been properly adjusted in the books of account. For assets lying with third parties at the year-end, written confirmations have been obtained by the Company.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.

(ii) The inventory, except materials-in-transit and stock lying with third parties, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on such verification were not material and have been properly adjusted in the books of account. For stock lying with third parties as at year end, written confirmations have been obtained by the Company.

(iii) According to the information and explanation given to us, we are of the opinion that there are no companies, firms, limited liability partnerships or other parties covered in the register required to be maintained under section 189 of the Act. Accordingly, paragraph 3(iii) of the Order is not applicable.

(iv) According to the information and explanation given to us, the Company has not given any loans, or made any investments, or provided any guarantee, or security as specified under Section 185 and 186 of the Act. Accordingly, paragraph 3(iv) of the Order is not applicable.

(v) The Company has not accepted any deposits covered under Section 73 to 76 or any other provisions of the Act and the rules framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub section (1) of section 148 of the Act in respect of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(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, Employees'' State Insurance, Income tax, Sales tax, Service tax, duty of customs, duty of excise, Value added tax and other material statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Sales tax, Service tax, duty of customs, duty of excise, Value added tax and other statutory dues were in arrears as at 31^st March 2017 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Service tax which have not been deposited with the appropriate authorities on account of any dispute. Further, according to the information and explanations given to us, except as stated below, there are no dues of Income tax, Sales tax, duty of excise, duty of customs and Value added tax which have not been deposited by the Company on account of disputes:

(Amount in Rs.lakhs)

Name of the Statute	Nature of dues	Amount disputed	Amount deposited under protest	Period to which the amount relates (Financial Year)	Forum where dispute is pending
Income-tax Act , 1961	Income tax	56.89	20.00	1995-1996	Commissioner of Income tax (Appeals)
	Income tax	30.90	-	2004-2005	Commissioner of Income Tax (Appeals)
	Income tax	1,612.00	-	2011-2012	Commissioner of Income tax (Appeals)
	Income tax	1,340.00	218.00	2012-2013	Commissioner of Income tax (Appeals)
Various Sales Tax Acts	Sales tax	0.72	0.72	1995-1996	Assistant Commissioner
	Sales tax	0.27	0.27	2005-2006	Joint Commissioner (Appeals)
	Sales tax	3.55	0.89	1999-2000	High Court
	Sales tax	21.12	-	2000-2001	WBCT Appellate & revision board
	Sales tax	5.23	1.57	2000-2001	Sales Tax Tribunal
	Sales tax	1.74	0.43	2001-2002	Sales Tax Tribunal
	Sales tax	0.52	-	2001-2002	Additional Commissioner (Appeals)
	Sales tax	0.15	-	2002-2003	Deputy Commissioner (Appeals)

Various Sales Tax Acts	Sales tax	1.19	-	2003-2004	Deputy Commissioner (Appeals)
	Sales tax	5.96	-	2004-2005	Joint Commissioner (Appeals)
	Sales tax	4.67	1.48	2007-2008	Deputy Commissioner (Appeal).
	Sales tax	1.78	0.18	2007-2008	The Appellate Authority
	Sales tax	1.93	0.71	2008-2009	Deputy Commissioner (Appeal)
	Sales tax	22.83	-	2009-2010	Deputy Commissioner (Appeals)
	Sales tax	0.74	-	2012-2013	Deputy Commissioner (Appeals)
	Sales tax	32.77	16.38	2015-2016	Deputy Commissioner (Appeals)
	Sales tax	14.03	7.02	2015-2016	Deputy Commissioner (Appeals)
Central Excise Act, 1944	Excise duty	1,201.14	-	July 2000 to December 2002	Customs Excise Service Tax Appellate Tribunal
	Excise duty	2.47	0.35	December 2003 to March 2004	Customs Excise Service Tax Appellate Tribunal
	Excise duty	181.36	-	May 2003 to Feb 2004	Supreme Court
Customs Act, 1962	Customs duty	49.67	49.67	2011-2014	CESTAT
	Customs duty	7.11	7.11	2012-2014	Commissioner Of Customs (Appeals)
	Customs duty	22.76	22.76	2014-2015	CESTAT
	Customs duty	1.36	1.36	2015-2016	Commissioner Of Customs (Appeals)
	Customs duty	89.33	89.33	2014-2015	Commissioner Of Customs (Appeals)

The above amounts include interest and penalty wherever indicated in the demand order.

(viii) The Company did not have any loans or borrowings from any financial institutions, banks, government or dues to debenture holders during the year. Thus paragraph 3(viii) of the Order is not applicable.

(ix) According to the information and explanations given to us, the Company has not raised any money by way of initial public offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.

(xi) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable, and the details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, paragraph 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure - B to the Independent Auditor’s Report of even date on the financial statements of Honda Siel Power Products Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

We have audited the internal financial controls over financial reporting of Honda Siel Power Products Limited (“the Company”) as of 31 March 2017 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (‘ICAI''). These responsibilities

include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31^st March 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the Institute of Chartered Accountants of India.

For BSR & Co. LLP

Chartered Accountants

Firm Registration No.: 101248W/W-100022

Vikram Advani

Place : New Delhi Partner

Date : 15 May 2017 Membership No.: 091765

---

Mar 31, 2016

We have audited the accompanying financial statements of Honda Siel Power Products Limited ("the Company"), which comprise the
Balance Sheet as at 31 March, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a
summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act")
with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial
performance and cash fows 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 of 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 there under.

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

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

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
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, of the state of affairs of the Company as at 31 March 2016, and its profit
and its cash fows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2016 (''Order''), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in Annexure A, a statement on the matters specified in paragraphs 3 and 4 of
the said Order.

2. As required by Section 143 (3) of the Act, we report that:

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

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

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

d) in our opinion, the aforesaid 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 2016 and taken on record by the Board
of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of Section
164 (2) of the Act;

f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating
effectiveness of such controls, refer to our separate report in "Annexure B"; and

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements – Refer
Note 31 to the financial statements; ii. the Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses; iii. there were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.

Annexure A to the Independent Auditor''s Report of even date on the financial statements of Honda Siel Power Products Limited

The Annexure A referred to in our Independent Auditor''s Report to the members of the Company on the financial statements for the
year ended 31 March 2016, we report that:

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

(b) As explained to us, the Company has a regular programme of physical verification of its fixed assets in a phased manner over
a period of three years. In accordance with this programme, certain fixed assets were physically verified by the Company during
the current year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the
Company and the nature of its fixed assets. No material discrepancies were noticed on such verification. For assets lying with
third parties at the year-end, written confirmations have been obtained.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company,
the title deeds of immovable properties are held in the name of the Company.

(ii) The inventory, except materials-in-transit and stock lying with third parties, has been physically verified by the
management during the

year and no material discrepancies were noticed on such verification. In our opinion, the frequency of such verification is
reasonable. For stock lying with third parties as at year end, written confrmations have been obtained.

(iii) According to the information and explanation given to us, we are of the opinion that there are no companies, frms, limited
liability partnerships or other parties covered in the register required under section 189 of the Companies Act, 2013.
Accordingly, paragraph 3(iii) of the Order is not applicable.

(iv) According to the information and explanation given to us, the Company has not given any loans, or made any investments, or
provided any guarantee, or security as specified under Section 185 and 186 of the Companies Act, 2013. Accordingly, paragraph
3(iv) of the Order is not applicable.

(v) The Company has not accepted any deposits covered under Section 73 to 76 or any other provisions of the Act and the rules
framed there under.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central
Government for maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 in respect of its
products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we
have not made a detailed examination of the records.

(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,
Employees'' State Insurance, Income tax, Sales tax, Service tax, duty of customs, duty of excise, Value added tax, cess and other
statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Income tax, Sales tax, Service tax, duty of customs, duty of excise, Value added tax, cess and other statutory
dues were in arrears as at 31 March 2016 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of duty of Customs and Service tax which have
not been deposited with the appropriate authorities on account of any dispute. Further, according to the information and
explanations given to us, except as stated below, there are no dues of Income tax, Sales tax, duty of excise and Value added tax
which have not been deposited by the Company on account of disputes:

Name of the Nature of dues Amount Period to which the
Statute (Rs. in lakhs) # amount relates
(Financial Year)

Income-tax Income tax 36.89 1995-1996
Act, 1961

Income tax 30.90 2004-2005

Income tax 498.38 2008-2009

Income tax 528.74 2009-2010

Income tax 1,309.16 2010-2011

Various
Sales Sales tax 2.66 1999-2000
Tax Acts

Sales tax 21.12 2000-2001

Sales tax 3.66 2000-2001

Sales tax 1.31 2001-2002

Sales tax 0.52 2001-2002
Various
Sales Sales tax 0.15 2002-2003
Tax Acts
Sales tax 1.19 2003-2004

Sales tax 5.96 2004-2005

Sales tax 3.19 2007-2008

Sales tax 21.65 2007-2008

Sales tax 1.60 2007-2008

Sales tax 8.54 2008-2009

Sales tax 67.53 2009-2010

Sales tax 22.83 2009-2010

Sales tax 0.23 2010-2011

Sales tax 0.74 2012-2013

Sales tax 32.77 2015-2016

Sales tax 14.03 2015-2016

Central Excise duty 1,201.14 July 2000 to
Excise Act, December 2002
1944

Excise duty 8.88 July 2000 to
March 2006

Excise duty 2.12 December 2003
to March 2004

Excise duty 181.36 May 2003 to
Feb 2004

Excise duty 27.69 2005-2006

Excise duty 2.70 2006-2007

Name of the Statute Forum where dispute is pending

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

Commissioner of Income Tax (Appeals)

Income Tax Appellate Tribunal

Income Tax Appellate Tribunal

Income Tax Appellate Tribunal

Various Sales
Tax Acts High Court

WBCT Appellate & revision board

Sales Tax Tribunal

Sales Tax Tribunal

Additional Commissioner (Appeals)

Various Sales
Tax Acts Deputy Commissioner (Appeals)

Deputy Commissioner (Appeals)

Joint Commissioner (Appeals)

Deputy Commissioner (Appeals)

Sales Tax Tribunal

The Appellate Authority

Deputy Commissioner (Appeals)

Additional Commissioner (Appeals)

Deputy Commissioner (Appeals)

The Appellate Deputy Commissioner

Deputy Commissioner (Appeals)

Deputy Commissioner (Appeals)

Deputy Commissioner (Appeals)

Central
Excise Act,
1944 Customs Excise Service Tax Appellate Tribunal

Customs Excise Service Tax Appellate Tribunal

Customs Excise Service Tax Appellate Tribunal

Supreme Court

Customs Excise Service Tax Appellate Tribunal

Commissioner (Appeals)

# Amounts disclosed are net of total amount paid under protest of Rs. 608.47 lakhs which has been shown under "Loans and
advances".

The above amounts include interest and penalty wherever indicated in the demand order.

(viii) The Company did not have any loans or borrowings from any financial institutions, banks, government or dues to debenture
holders during the year. Thus paragraph 3 (viii) of the Order is not applicable.

(ix) According to the information and explanations given to us, the Company has not raised any money by way of initial public
offer or further public offer (including debt instruments) and term loans during the year. Accordingly, paragraph 3 (ix) of the
Order is not applicable.

(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or
employees has been noticed or reported during the year.

(xi) According to the information and explanations give to us and based on our examination of the records of the Company, the
Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of
section 197 read with Schedule V to the Act.

(xii) According to the information and explanations given to us, the Company is not a Nidhi Company. Accordingly, paragraph
3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on our examination of the records of the Company,
transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and the details of
such transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the
Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during
the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the
Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv)
of the Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.

Annexure - B to the Independent Auditor''s Report of even date on the financial statements of Honda Siel Power Products Limited

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of Honda Siel Power Products Limited ("the Company") as
of 31 March 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management''s Responsibility for Internal Financial Controls

The Company''s management is responsible for establishing and maintaining internal financial controls based on the internal
control over financial reporting criteria established by the Company considering the essential components of internal control
stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including
adherence to Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy
and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the
Companies Act, 2013.

Auditor''s Responsibility

Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our
audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial
Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10)
of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance
Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and maintained and if such controls operated
effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system
over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting
included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material
weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed
risk. 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.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the
Company''s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with
generally accepted accounting principles. A company''s internal financial control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded
as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that
receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company''s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of
collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are
subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial
reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on
the internal control over financial reporting criteria established by the Company considering the essential components of
internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting, issued by the
Institute of Chartered Accountants of India.

For B S R & Co. LLP

Chartered Accountants

Firm Registration No.: 101248W/W-100022

Vikram Advani

Place: New Delhi Partner

Date: 20 May 2016 Membership No.: 091765

---

Mar 31, 2015

We have audited the accompanying standalone financial statements of Honda Siel Power Products Limited ("the Company"), which comprise the Balance Sheet as at 31 March, 2015, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management''s Responsibility for the Standalone Financial Statements

The Company''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made 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 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 accounting policies used and the reasonableness of the accounting estimates made by Company''s Directors, as well as evaluating the overall presentation of the financial statements.

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

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its profit and its cash flows for the year ended on that date.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2015 ("the Order") issued by the Central Government 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 appears from our examination of those books;

c) the Balance Sheet, the 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 aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;

e) on the basis of 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; and

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

i. the Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 30 to the financial statements;

ii. the Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses;

iii. there were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditor''s Report

The Annexure referred to in our Independent Auditor''s Report to the members of the Company on the financial statements for the year 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) As explained to us, the Company has a regular programme of physical verification of its fixed assets in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were physically verified by the Company during the current year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such verification. For assets lying with third parties at the year end, written confirmation have been obtained.

(ii) (a) The inventory, except materials-in-transit and stock lying with third parties, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable. For stock lying with third parties as at year end, written confirmations have been obtained.

(b) The procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) 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 adjusted in the books of account.

(iii) According to the information and explanation given to us, 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.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company''s specialised requirements and similarly certain goods sold and services rendered are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and 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 covered under Section 73 to 76 of the Act.

(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 in respect of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(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, Employees'' State Insurance, Income tax, Wealth tax, Sales tax, Service tax, Value added tax, duty of excise, duty of customs, cess and other material statutory dues have been regularly deposited with the appropriate authorities.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Employees'' State Insurance, Income tax, Wealth tax, Sales tax, Service tax, Value added tax, duty of customs, duty of excise, cess and other material statutory dues were in arrears as at 31 March 2015 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth tax, duties of Customs and cess which have not been deposited with the appropriate authorities on account of any dispute. Further, according to the information and explanations given to us, except as stated below, there are no dues of Income tax, Sales tax, Service tax, Value added tax and duty of excise which have not been deposited by the Company on account of disputes:

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

Income-tax Act1961 Commissioner of Income tax (Appeals) 36.89

Commissioner of Income Tax (Appeals) 189.53

Commissioner of Income Tax (Appeals) 30.90

Income Tax Appellate Tribunal 91.52

Income Tax Appellate Tribunal 798.32 Income Tax Appellate Tribunal 498.38

Income Tax Appellate Tribunal 528.74

Various Sales TaxActs High Court 2.66

WBCT Appellate & revision board 21.12

Sales Tax Tribunal 3.66

Sales Tax Tribunal 1.31

Additional Commissioner (Appeals) 0.52

Deputy Commissioner (Appeals) 22.18

Deputy Commissioner (Appeals) 0.15

Deputy Commissioner (Appeals) 1.19

Joint Commissioner (Appeals) 5.96

Joint Commissioner (Appeals) 0.27

Deputy Commissioner (Appeals) 3.19

Sales Tax Tribunal 21.65

The Appellate Authority 1.60

Deputy Commissioner (Appeals) 8.54

Additional Commissioner (Appeals) 67.53

Deputy Commissioner (Appeals) 22.83

Joint Commissioner (Appeals) 0.23

Central Excise Act,1944 Customs Excise Service Tax Appellate Tribunal 1,201.14

Customs Excise Service Tax Appellate Tribunal 8.88

Supreme Court 20.61

Supreme Court 211.67

Customs Excise Service Tax Appellate Tribunal 2.12

High Court 181.36

Supreme Court 14.61

Customs Excise Service Tax Appellate Tribunal 27.69

Deputy Commissioner (Appeals) 2.70

Service tax Customs Excise Service Tax Appellate Tribunal 75.40

High Court 6.65

Name of the Statute Financial Year Nature Due

Income tax Act 1961 1995-1996 Penalty.

2003- 2004 Various disallowances.

2004- 2005 Various disallowances.

2005- 2006 Various disallowances.

2007- 2008 Various disallowances.

2008- 2009 Various disallowances.

2009- 2010 Various disallowances.

1999- 2000 Other disallowances.

Various sales tax Acts 2000- 2001 Dispute on enhancement of sales and rejection of stock transfer.

2000- 2001 Dispute on enhancement of sales and rejection of stock transfer.

2001- 2002 Dispute on enhancement of sales and rejection of stock transfer.

2001-2002 Various disallowances.

2001- 2002 Dispute due to sales tax rates.

2002- 2003 Various disallowances.

2003- 2004 Non Submission of sales tax forms and rejection of stock transfer.

2004- 2005 Various disallowances.

2005- 2006 Various disallowances. 2007-2008 Other disallowances. 2007-2008 Dispute on sales tax rates.

2007- 2008 Non Submission of sales tax forms.

2008- 2009 Various disallowances.

2009- 2010 Various disallowances.

2009- 2010 Non Submission of sales tax forms and rejection of stock transfer.

2010- 2011 Dispute on exempted sales.

Centrol Excise Act 1994 July 2000 to Disputes on duty on stock transfer. December 2002

July 2000 to Inclusion of expenses in assessable value. March 2003

July 2000 to Inclusion of expenses in assessable value. November 2003

2002-2003 Disputes on differential duty. December 2003 Other disallowances. to March 2004

May 2003 to Dispute on duty rate. Feb 2004

2004- 2005 Inclusion of expenses in assessable value. 2005- 2006 Inclusion of expenses in assessable value.

2006- 2007 Inclusion of expenses in assessable value.

Service tax 1999-2004 Service tax on royalty.

December 2005 In-eligibility of CENVAT credit. to August 2007

# Amounts disclosed are net of total amount paid under protest of Rs. 1,511.25 lakhs which has been shown under "Long term loans and advances".

(c) According to the information and explanations given to us, the Company did not have any dues on account of investor education and protection fund.

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

(ix) In our opinion and according to the information and explanations given to us, the Company did not have any outstanding dues to its bankers or any financial institution or debenture holders during the year.

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

(xi) The Company did not have any term loans outstanding during the year.

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

For B S R & Co. LLP Chartered Accountants Firm Registration No.: 101248W/W-100022

Vikram Advani Place: New Delhi Partner Date : 18 May 2015 Membership No.: 091765

---

Mar 31, 2013

Report on the Financial Statements

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

Management responsibility for the Financial Statements

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

Auditor''s responsibility

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

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

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

Opinion

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

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

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

(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date. Report on other legal and regulatory requirements

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

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

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

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

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 oftheCompaniesAct, 1956;

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

Annexure to the Auditors'' report

(Referred to in 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) As explained to us, the Company has a regular programme of physical verification of its fixed assets in a phased manner over a period of three years. In accordance with this programme, certain fixed assets were physically verified by the Company during the current year. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such verification.

(c) Fixed asset disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

(ii) (a) The inventory, except materials-in-transit, has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable.

(b) The procedures for the physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material.

(iii) According to the information and explanations given to us, the Company has neither gra/ited nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(iv) In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain

items of inventories and fixed assets are for the Company''s specialised requirements and similarly certain goods sold and services rendered are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

(v) (a) In our opinion, and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lakh with any party during the year have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time except for purchases of certain items of inventories and fixed assets which are for the Company''s specialised requirements and similarly for sale of certain goods for the specialised requirements of the buyers and for which suitable alternative sources are not available to obtain comparable quotations. However, on the basis of information and explanations provided, the same appear reasonable.

(vi) The Company has not accepted any deposits from the public.

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

(viii) We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under Section 209(1 )(d) of the Companies Act, 1956 in respect of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

(ix) (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, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Wealth tax, Excise duty, Service tax, Customs duty and other material statutory dues have been regularly deposited with the appropriate authorities, though there has been a slight delay in a few cases of Sales tax and Professional tax.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income tax, Wealth tax, Service tax, Customs duty, Excise duty, Sales tax and other material statutory dues were in arrears as at 31 March 2013 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth tax and Customs duty which have not been deposited with the appropriate authorities on account of any dispute. Further, according to the information and explanations given to us, except as stated below, there are no dues of Income tax, Sales tax, Service tax and Excise duty which have not been deposited by the Company on account of disputes:

Name of the Statute Forum where dispute is Amount pending/Remarks (Rs in lakhs) (#)

Income-tax Act, 1961 Commissioner of Income Tax (Appeals) 36,89

Commissioner of Income Tax (Appeals) 99.11

Commissioner of Income Tax (Appeals) 189.53

Income Tax Appellate Tribunal 127.91

Commissioner of Income Tax (Appeals) 30.90

Income Tax Appellate Tribunal 298.44

Income Tax Appellate Tribunal* 802.43

Income Tax Appellate Tribunal 103.55

Income Tax Appellate Tribunal* 465.11

Commissioner of Income Tax (Appeals) 49.25

Commissioner of Income Tax (Appeals) 302.00

Various Sales Tax Act High Court 21.66

WBCT Appellate & Revision Board 21.12

Sales Tax Tribunal 3.66

Sales Tax Tribunal 1.31

Additional Commissioner 0.52

Deputy Commissioner Appeals 22.18

Deputy Commissioner Commercial Taxes 1.19

Deputy Commissioner Commercial Taxes 0.15

Sales Tax Tribunal 18.68

Joint Commissioner (Appeal) 5.96

Joint Commissioner (Appeal) 0.92

Sales Tax Tribunal 21.65

The Appellate Authority 1.78

Deputy Commissioner Appeals 8.54

Deputy Commissioner Appeals 22.83

Joint Commissioner (Appeal) 2.80

Finance Act, 1994 - Service tax Custom Excise Service Tax Appellate Tribunal* 42.32

Custom Excise Service Tax Appellate Tribunal* 33.08

Custom Excise Service Tax Appellate Tribunal 1.55

High Court - Department in appeal 6.65

Central Excise Act, 1944 Custom Excise Service Tax Appellate Tribunal* 41.22

Custom Excise Service Tax Appellate Tribunal* 27.69

Custom Excise Service Tax Appellate Tribunal* 29.22

High Court - Department in Appeal 58.08

Custom Excise Service Tax Appellate Tribunal* 1,201.14

Custom Excise ServiceTax Appellate Tribunal 2.12

Custom Excise Service Tax Appellate Tribunal* 1,416.86

Custom Excise Service Tax Appellate Tribunal- 145.32

Department in appeal

Supreme court - Department in appeal 211.67

Custom Excise Service Tax Appellate Tribunal 8.88

Commissioner (Appeals) 2.70

Commissioner (Appeals) 0.72

Commissioner (Appeals) 0.51

Custom Excise Service Tax Appellate Tribunal 21.58

Name Period to Nature of dues which amount relates

Income Tax Act 1961 1995-1996 Penalty

2002-2003 Various disallowances

2003-2004 Various disallowances

2004-2005 Various disallowances

2004-2005 Various disallowances

2005-2006 Various disallowancee

2007-2008 Various disallowances

1998-1999 Various disallowances

2006-2007 Various disallowances

2004-2005 Penalty

2005-2006 Penalty

Various Sales Tax 1999-2000 Other disallowances

2000-2001 Dispute on enhancement of sales and rejection of stock transfer

2000-2001 Dispute on enhancement of sales and rejection of stock transfer

2001-2002 Dispute on enhancement of sales and rejection of stock transfer 2001-2002 Various disallowances

2001-2002 Dispute due to sales tax rates

2003-2004 Non submission of sales tax forms_

2002-2003 Non submission of sales tax forms

2004-2005 Various disallowances

2004-2005 Various disallowances

2005-2006 Various disallowances

_2007-2008 Dispute on sales tax rates

2007-2008 Non submission of sales tax forms

2008-2009 Dispute on enhancement of sales and rejection of stock transfer

2009-2010 Dispute on enhancement of sales and rejection of stock transfer

2010-2011 Various disallowances

1999-2002 Service Tax on royalty

1999-2004 Service Tax on royalty

1997-1998 Service Tax on goods transport

2005-2007 In-eligibility of cenvat credit_

2000-2003 Inclusion of expenses in assessable value

2005-2006 Inclusion of expenses in assessable value

2004-2005 Inclusion of expenses in assessable value

2003-2004 Dispute on rate of duty

2000-2002 Disputes on duty on stock transfer

2003-2004 Other disallowances

2001-2004 Disputes on duty on stock transfer

2002-2003 Wrong availment of cenvat credit

2002-2003 Disputes on differential duty

2000-2003 Inclusion of expenses in assessable value

2006-2007 Inclusion of expenses in assessable value

2009-2010 Inclusion of expenses in assessable value

2010-2011 Inclusion of expenses in assessable value Financeal Act,1994 2004-2007 Penalty

(x) The Company does not have any accumulated losses and has not incurred cash losses in the current year and immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company did not have any outstanding dues to its bankers or any financial institution or debenture holders during the year.

(xii) The Company has not granted any loans and advances on the basis of security byway of pledge of shares, debentures and other securities.

(xiii) In ouropinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi/mutual benefit fund/society.

(xiv) According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

(xvi) According to the information and explanations given to us, the Company did not have any term loans outstanding during the year.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we are of the opinion that the funds raised on short- term basis have not been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares during the year.

(xix) The Company did not have any outstanding debentures during the year.

(xx) The Company has not raised any money by way of public issues during the year.

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

For BSRi Co.

Chartered Accountants Firm Registration No.: 101248

W Rajesh Arora Place: New Delhi Partner

Date: 20 May 2013 Membership No.: 076124

---

Mar 31, 2012

A) We have audited the attached Balance Sheet of Honda Siel Power Products Limited ("the Company") as at 31 March 2012, Statement of Profit and Loss and the Cash Flow Statement of the Company for the year ended on that date, (or "financial statements"), 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.

b) We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

c) 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 Companies Act, 1956, we enclose in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

d) Further to our comments in the Annexure referred to above, we report that:

(i) 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;

(ii) 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; ,

(iii) 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;

(iv) in our opinion, the Balance Sheet, Statement of Profit and Loss and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) on the basis of written representations received from the Directors of the Company as on 31 March 2012 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2012 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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

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

ii) in the case of 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.

ANNEXURE TO THE AUDITORS' REPORT

(Referred to in our report of even date)

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

(b) As explained to us, the Company has a programme of physical verification of its fixed assets in a phased manner over a period of three years. In accordance with this programme, during the current year, physical verification of certain fixed assets has been carried out by the Company. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

2. (a) Inventories, except stock-in transit, have been physically verified by management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained.

(b) In our opinion, the procedures of physical verification of inventories 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Company's specialised requirements and similarly certain goods sold and services rendered are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in Section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lakhs are for sale of certain goods and services for the specialised requirements of the buyer and for which suitable alternative sources are not available to obtain comparable quotations. Hence it is not possible for us to comment whether above contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

9. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Wealth tax, Excise duty, Service tax, Customs duty, Cess and other material statutory dues have been regularly deposited with the appropriate authorities. Sales tax, Entry tax and Professional tax have generally been regularly deposited with the appropriate authorities though there has been slight delay in a few cases.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income tax, Wealth tax, Service tax, Customs duty, Excise duty, Sales tax, Entry tax, Professional tax, Cess and other material statutory dues were in arrears as at 31 March 2012 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth tax, Customs duty and Cess which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income tax, Sales tax, Service tax and Excise duty have not been deposited by the Company on account of disputes:

Name of the Statute Nature of dues Amount Period to (Rs.in which amount lakhs)* relates

Income-tax Act, 1961 Penalty 36.89 1995-1996

Various disallowances 125.94 1998-1999

Various disallowances 10.93 2001-2002

Various disallowances 43.45 2002-2003

Various disallowances 99.11 2002-2003

Various disallowances 189.53 2003-2004

Various disallowances 142.44 2003-2004

Various disallowances 168.28 2004-2005

Various disallowances 377.44 2005-2006

Various disallowances 397.71 2006-2007

Penalty 118.00 1998-1999

Penalty 169.25 2004-2005

Penalty 402.00 2005-2006

Various Sales Tax Acts Non-submission of forms 4.75 1988-1989

Other disallowances 2.66 1999-2000

Dispute on enhancement of sales and 33.35 2000-2002

rejection of stock transfer 2005-2006

Dispute on sales tax rates 21.66 2007-2008

Various disallowances 6.88 2004-2005

2005-2006

Non Submission of sales tax forms and 20.10 2001-2004

rejection of stock transfer 2007-2008

2008-2009

Dispute due to sales tax rates 640.45 2001-2005

Central Excise Act, 1944 Inclusion of expenses in assessable value 98.13 2000-2003

2004-2006

Inclusion of expenses in assessable value 8.88 2000-2003

Penalty 21.58 2004-2007

Other disallowances 2.31 2003-2004

Wrong availment of Cenvat credit 145.32 2002-2003

Various disallowances 4.12 2004-2005

2006-2007

Disputes on differential duty 211.67 2002-2003

Service Tax Service Tax on royalty 75.40 1999-2004

Service Tax on Goods Transport 1.55 1997-1998

In-eligibility of Cenvat credit 6.65 2005-2007



Name of the Statute Forum where dispute is pending/ Remarks

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

Commissioner of Income tax (Appeals)

Income Tax Appellate Tribunal

Income Tax Appellate Tribunal

Commissioner of Income Tax (Appeals)

Commissioner of Income Tax (Appeals)

Income Tax Appellate Tribunal

Commissioner of Income Tax (Appeals)

Commissioner of Income Tax (Appeals)

Income Tax Appellate Tribunal

Commissioner of Income Tax (Appeals)

Commissioner of Income Tax (Appeals)

Commissioner of Income Tax (Appeals)

Various Sales Tax Acts High Court. Sales Tax Authorities have filed the appeal

High Court

Sales Tax Tribunal

Sales Tax Tribunal

Joint Commissioner (Appeals)

Deputy Commissioner (Appeals)

Deputy Commissioner (Appeals)

Central Excise Act, 1944 Customs Excise Service Tax Appellate Tribunal. The Company has got stay from the Appellate Authority Customs Excise Service Tax Appellate Tribunal.

Customs Excise Service Tax Appellate Tribunal. Department has filed the appeal

Customs Excise Service Tax Appellate Tribunal

Joint Commissioner (Appeals). Department has filed the appeal

Commissioner/Asstt. Commissioner

Supreme Court - Department in Appeal

Service Tax Customs Excise Service Tax Appellate Tribunal. The Company has got stay from the Appellate Authority

Customs Excise Service Tax Appellate Tribunal

Customs Excise Service Tax Appellate Tribunal. Department has filed the appeal.

* Includes penalty wherever indicated in the order

10. The Company does not have any accumulated losses and has not incurred cash losses in the financial year and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company did not have any outstanding dues to its bankers or any financial institution or debenture holders 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 our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

16. According to the information and explanations given to us, no term loan has been taken by the Company during the year.

17. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, we are of the opinion that the funds raised on short-term basis have not been used for long-term investment.

18. The Company has not made any preferential allotment of shares during the year.

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

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

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

For BSR & Co.

Chartered Accountants

Firm Registration No.: 101248W

Rajesh Arora

Place: New Delhi Partner

Date : 23 May2012 Membership No.: 076124

---

Mar 31, 2011

A) We have audited the attached Balance Sheet of Honda Siel Power Products Limited (“the Company”) as at 31 March 2011 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, (or “financial statements”), annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

b) We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

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

d) Further to our comments in the Annexure referred to above, we report that:

i) 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;

(ii) 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;

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

(iv) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) on the basis of written representations received from the Directors of the Company as on 31 March 2011 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2011 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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

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

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 THE AUDITORS REPORT

(Referred to in our report of even date)

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

(b) As explained to us, the Company has a programme of physical verification of its fixed assets in a phased manner over a period of three years. In accordance with this programme, during the current year, physical verification of certain fixed assets has been carried out by the Company. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

2. (a) Inventories, except stock-in transit, have been physically verified by management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained.

(b) In our opinion, the procedures of physical verification of inventories 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Companys specialised requirements and similarly certain goods sold and services rendered are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section.

(b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lacs are for sale of certain goods and services for the specialised requirements of the buyer and for which suitable alternative sources are not available to obtain comparable quotations. Hence it is not possible for us to comment whether above contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

9. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Income tax, Wealth tax, Excise duty, Service tax, Customs duty, Cess and other material statutory dues have been regularly deposited with the appropriate authorities. Sales tax, Entry Tax, Employees State Insurance and Professional tax have generally been regularly deposited with the appropriate authorities though there has been slight delay in a few cases.

There were no dues on account of cess under section 441A of the Companies Act, 1956 since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, Employees State Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues were in arrears as at 31 March 2011 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no dues of Wealth Tax, Cess and Customs Duty which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income-tax, Sales tax, Service tax and Excise duty have not been deposited by the Company on account of disputes:

Period to

Amount which

Name of the Statute Nature of dues Forum where dispute is pending/Remarks

(Rs in lakhs)* amount

relates

Income-tax Act , 1961 Penalty 36.89 1995-1996 Commissioner of Income tax (Appeals)

Various disallowances 125.94 1998-1999 Commissioner of

Income tax (Appeals)

Various disallowances 10.93 2001-2002 Income Tax Appellate Tribunal

Various disallowances 43.45 2002-2003 Income Tax Appellate Tribunal

Various disallowances 99.11 2002-2003 Commissioner of

Income Tax (Appeals)

Various disallowances 259.53 2003-2004 Commissioner of Income Tax (Appeals)

Various disallowances 142.44 2003-2004 Income Tax

Appellate Tribunal

Various disallowances 238.76 2004-2005 Commissioner

of Income Tax (Appeals)

Various disallowances 377.44 2005-2006 Commissioner of Income Tax (Appeals)

Various Sales Tax Acts Disputes in sales tax rates 31.76 1999-2000 High Court

2000-2001

Non- submission of forms 4.75 1988-1989 High Court.

Sales Tax Authorities

have filed the

appeal

Other disallowance 2.66 1999-2000 High Court

Dispute on enhan - cement 33.44 2000-2002 Sales Tax

Tribunal

of sales and rejection of 2005-2006

stock transfer

Dispute on sales tax rates 21.66 2007-2008 Sales Tax Tribunal

Various disallo - wances 12.49 2004-2005 Joint

Commissioner

(Appeals)

2005-2006

Non Submission of sales 21.40 2001-2004 Dy. Commissioner

(Appeals)

tax forms and rejection of 2007-2008

stock transfer 2008-2009

Dispute due to sales tax 640.45 2001-2005 Dy. Commissioner

(Appeals) rates

Servicve Tax Service Tax on royalty 75.40 1999-2004 Customs Excise

Service Tax Appellate Tribunal.

The Company has got stay from the Appellate Authority

Service Tax on Goods 1.55 1997-1998 Customs Excise Service Tax Appellate

Tribunal Transport

In-eligibility of Cenvat 6.65 2005-2007 Customs Excise Service Tax Appellate Tribunal .

Credit Department has filed the appeal.

* Includes penalty wherever indicated in the order

10. The Company does not have any accumulated losses and has not incurred cash losses in the financial year and in the immediately preceding financial year.

11. In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks. The Company did no have any outstanding debentures or any outstanding loans from any financial institution 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 our opinion and according to the information and explanations given to us, the Company is not a chit fund or a nidhi / mutual benefit fund / society.

14. According to the information and explanations given to us, the Company is not dealing or trading in shares, securities, debentures and other investments.

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

16. According to the information and explanations given to us, no term loan has been taken by the Company during the year.

17. According to the information and explanations given to us, and on an overall examination of the balance sheet of the Company, we are of the opinion that the fund raised on short-term basis have not been used for long-term investment.

18. The Company has not made any preferential allotment of shares during the year.

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

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

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

For B S R & Co.

Chartered Accountants

Firm Registration No. 101248W

Vikram Aggarwal

Partner

Membership No. 089826

Place : New Delhi

Date : 19 May 2011

---

Mar 31, 2010

A) We have audited the attached Balance Sheet of Honda Siel Power Products Limited ("the Company") as at 31st March 2010 and also the Profit and Loss Account and the Cash Flow Statement of the Company for the year ended on that date, (or "financial statements"), annexed thereto. These financial statements are the responsibility of the Companys management. Our responsibility is to express an opinion on these financial statements based on our audit.

b) We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statements presentation. We believe that our audit provides a reasonable basis for our opinion.

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

d) Further to our comments in the Annexure referred to above, we report that:

(i) we have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of ouraudit;

(ii) 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;

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

(iv) in our opinion, the Balance Sheet, the Profit and Loss Account and the Cash Flow Statement dealt with by this report comply with the Accounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956;

(v) on the basis of written representations received from the Directors of the Company as on 31 March 2010 and taken on record by the Board of Directors, we report that none of the directors is disqualified as on 31 March 2010 from being appointed as a Director in terms of clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

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

i) in the case of the Balance Sheet, of the state of the affairs of the Company as at 31 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 THE AUDITORSREPORT

(Referred to in our report of even date)

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

(b) As explained to us, the Company has a programme of physical verification of its fixed assets in a phased manner over a period of three years. In accordance with this programme during the current year, physical verification of certain fixed assets has been carried out by the Company. In our opinion, this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) Fixed assets disposed off during the year were not substantial, and therefore, do not affect the going concern assumption.

2. (a) Inventories, except stock-in transit, have been physically verified by management during the year. In our opinion, the frequency of such verification is reasonable. For stocks lying with third parties at the year-end, written confirmations have been obtained.

(b) In our opinion, the procedures of physical verification of inventories 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. The discrepancies noticed on verification between the physical stocks and the book records were not material.

3. According to the information and explanations given to us, the Company has neither granted nor taken any loans, secured or unsecured to or from companies, firms or other parties covered in the register maintained under Section 301 of the Companies Act, 1956.

4. In our opinion and according to the information and explanations given to us, and having regard to the explanation that purchases of certain items of inventories and fixed assets are for the Companys specialised requirements and similarly certain goods sold and services rendered are for the specialised requirements of the buyers and suitable alternative sources are not available to obtain comparable quotations, 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 inventories and fixed assets and with regard to the sale of goods and services. We have not observed any major weakness in the internal control system during the course of the audit.

5. (a) In our opinion and according to the information and explanations given to us, the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 have been entered in the register required to be maintained under that section, (b) In our opinion, and according to the information and explanations given to us, the transactions made in pursuance of contracts and arrangements referred to in (a) above and exceeding the value of Rs 5 lacs are for sale of certain goods and services for the specialised requirements of the buyer and for which suitable alternative sources are not available to obtain comparable quotations. Hence it is not possible for us to comment whether above contracts or arrangements have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time.

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

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

8. We have broadly reviewed the books of account maintained by the Company pursuant to the rules prescribed by the Central Government for maintenance of cost records under clause (d) of sub-section (1) of Section 209 of the Companies Act, 1956 in respect of its products and are of the opinion that prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the records.

9. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Wealth tax, Excise duty, Service tax, Customs duty, Cess and other material statutory dues have been regularly deposited with the appropriate authorities. Sales tax, Entry tax and Professional tax have generally been regularly deposited with the appropriate authorities though there has been slight delay in a few cases.

There were no dues on account of cess under section 441A of the Companies Act, 1956 since the date from which the aforesaid section comes into force has not yet been notified by the Central Government.

According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Investor Education and Protection Fund, EmployeesState Insurance, Income tax, Sales tax, Wealth tax, Service tax, Customs duty, Excise duty, Cess and other material statutory dues were in arrears as at 31 March 2010 for a period of more than six months from the date they became payable, (b) According to the information and explanations given to us, there are no dues of Wealth Tax, Cess and Customs Duty which have not been deposited with the appropriate authorities on account of any dispute. According to the information and explanations given to us, the following dues of Income-tax, Sales tax, Service tax and Excise duty have not been deposited by the Company on account of disputes:



For BSR& Co. Chartered Accountants Firm Registration No. 101248W

Vikram Aggarwal Place : New Delhi Partner

Date : 21 May 2010 Membership No. 089826